US: Craft Brew Alliance warns of "unprecedented competition" as FY profits dip

By | 13 March 2013

  • FY net profits slide by 74% to US$2.5m
  • Net sales rise by 13% to $169.3m
  • Operating profits drop 5.7% to $5.1m
  • Kona brand to be rolled-out to new markets in 2013
CBA says 2013 will be "tempered by unprecedented  competition" in the craft beer sector

CBA says 2013 will be "tempered by unprecedented competition" in the craft beer sector

Craft Brew Alliance (CBA) has reported a marked drop in full-year profits and warned that its performance this year will be weakened by “unprecedented competition” in the sub-category.

Net profits in the 12 months to the end of December plunged by 74% to US$2.5m, the Pacifice north-west brewing alliance said late yesterday (12 March). Sales in the period were up by 13% to $169.3m.

Operating profits in the 12 months fell by 5.7% to $5.1m. 

The slide is partly due to a difficult 2011 comparative, which was boosted by the sale of its 42% stake in Fulton Street Brewery, also known as Goose Island, to Anheuser-Busch InBev. Last year also saw around $9.1m of capital expenditure on capacity, efficiency and “quality initiatives”, CBA said.

Fourth-quarter net profits, meanwhile, rose by 32% to $0.3m, as sales increased by 20% to 41.9m. Operating profits in the three months leapt by 82% to $0.9m.

Looking ahead, Terry Michaelson, CBA's CEO, said the company expects “meaningful growth” from sales and profits in 2013 helped by its “portfolio strategy, operating expense leverage and SG&A leverage”. This will include expansion into new markets for its Kona brand and international expansion for “all brand families”. 

He added: “We expect strong growth tempered by unprecedented competition.”

The company also said its contract brewing income for 2013 will be around half of 2012's due to a "mutual decision to unwind the Goose Island contract brewing arrangement" with Anheuser-Busch InBev

To read CBA's full statement, click here 

Expert analysis

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Sectors: Beer & cider, Company results

Companies: Anheuser-Busch InBev

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