US: Redhook blames sales slide on Widmer deal
US craft brewer Redhook Ale has blamed its venture with Widmer Brothers Brewing Co. for its falling sales in the west of the country.
Redhook, which is based in Washington state, has seen sales fall in its home market, California and Oregon during the third quarter. Sales in Colorado, the company said, slumped 25% in the three months to 30 September.
The brewer has pointed the finger at Craft Brands Alliance, a sales and marketing venture it set up with Widmer two years ago to serve the Pacific Northwest of the US.
Redhook said the region accounted for 42% of its total US shipments during the third quarter - compared to 55% last year - and blamed Craft Brands for the downturn.
"The company believes its third-quarter sales in Craft Brands territory have declined due to Craft Brands' unsuccessful execution of its sales and marketing strategy for Redhook's core and emerging products," Redhook said.
The brewer noted that the venture had been "very successful" in selling Widmer products, as well as brands owned by Hawaii-based Kona Brewing Co. Redhook said it benefited from growing sales of Widmer and Kona products but insisted it is "critical" for the venture to drive sales from the Redhook stable.
Redhook added: "The company has communicated this concern to Craft Brands, and is working with Craft Brands' management to establish new brand management throughout the portfolio of Redhook products.
"If Craft Brands is unable to increase shipments of the company's products in the west, the company's operations will become more dependent on lower margin contract brewing, and profit margins will suffer."
Redhook warned that it faces "extreme competitive pressure" in Washington state, the brewer's largest market. Since 2000, Redhook has seen its sales slump 20% in the state.
Despite its problems in the west of the US, the company yesterday (13 November) posted an operating profit of US$598,368 for the third quarter of the year, swinging from a net loss of over $109,000 last year.
The brewer saw revenues rise to $10.8m from $9.5m last year thanks to the success of price increases in the mid-west and in eastern US states during the quarter.
Redhook sells its products in those states through a distribution agreement with brewing giant Anheuser-Busch.
InBev has posted a strong lift in profits for its first quarter. The global brewer said today (10 May) that net profit for the first three months of this year leapt by 69% year-on-year, reaching EUR28...
A strong export performance has contributed to a healthy climb in Q1 sales and profit at Mexican brewer Grupo Modelo....
Tsingtao Brewery has posted a leap in earnings for the first quarter of 2007....
Anheuser-Busch has announced changes in four key management positions....
Anheuser-Busch says it has come out on top in the latest two rounds of its trademark row with Budejovicky Budvar....
Anheuser-Busch has released three additions to its Michelob portfolio in the US....
Anheuser-Busch has posted a steady start to its year so far. The US-based brewer yesterday (25 April) reported a 3.7% year-on-year lift in Q1 net income, which hit US$518m....
A milk beer, a caffeine-infused vodka and water with flower essences are some of the new drinks products launched this month....
- Remy, dead cats and the power of China's new year
- Focus - Remy Cointreau's YTD Performance by Brand
- Will Lucas Bols' IPO Bring Much-Needed Stability?
- Price drops would damage our DNA - Remy Cointreau
- A Dangerous World and the Threat to Beverages
- Moët Hennessy unveils first Travel Retail outlet
- Pernod unveils Jameson bottle for St Patrick's Day
- Maxxium UK head to depart for Edrington role
- Remy eases declines as China hints at recovery
- SABMiller beer volumes fall as China holds back Q3
- Global RTD/RTS insights - market forecasts, product innovation and consumer trends research
- Global vodka insights - market forecasts, product innovation and consumer trends research
- Diageo plc (DGE) - Financial and Strategic SWOT Analysis Review
- Edrington Group in Spirits (World)
- just-drinks on-trend: Craft beer - fortunes and future