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Craft Brew Alliance Shares 2015 Plans at Second Annual National Conference

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Earlier today, Craft Brew Alliance (CBA) (NASDAQ:BREW) , hosted its second annual conference for beer wholesalers and distributors, following the National Beer Wholesalers Association Convention in New Orleans. During the conference, the company highlighted significant 2013-2014 accomplishments and outlined its 2015 plans, calling on its wholesaler partners to seize the day and continue supporting CBA as a leader in the crowded craft beer segment.

CBA CEO Andy Thomas kicked off the day reiterating CBA‘s unique ability to combine the soul of a craft brewer with the body of a big brewer. “No other company brings together these six core advantages – a distinctive portfolio of pioneering brands, expertise in branding, national brewing and supply chain capability, the scale to drive national retail chain activation, allied access to the Anheuser-Busch distribution network, and a seasoned management team with well over 100 years of beer leadership experience,” he said. “With the increasing consumer shift towards more distinctive beers and beer experiences, combined with the dramatic growth in craft, there’s never been a better time to be us. Today is about inviting our partners to take advantage of the momentum and opportunities that exist right now.”

Significant CBA-CON Highlights:

  • In his opening remarks, Thomas highlighted the company’s progress against four key objectives it outlined for 2014: continued strong topline growth alongside a 25% reduction in SKUs, increased focus on its core beers, the biggest media investment in the company’s history for Kona Brewing, and significantly improving its supply chain operations to drive gross margin expansion.
  • In his first CBA-CON appearance, CMO Ken Kunze reflected on the changes in the industry, drawing on his 25 years of beverage experience, including his tenure as CMO at Heineken USA. Kunze compared the current opportunity in beer to a renaissance and described how CBA will continue to leverage its distinctive portfolio of craft brands and national distribution capability to capitalize on the consumer shift towards more flavor, variety and authenticity.
  • Senior Director of Brand Marketing and Portfolio Development Robert Rentsch reviewed several emerging consumer trends that are driving unprecedented growth and innovation in the industry, and underscored that a focus on core beers, key geographies and channels, and continued investments in marketing would be common themes for each brand in the portfolio in 2105.
  • The oldest brand in CBA‘s family, Redhook Brewery, enters its 34th year in 2015. Karmen Olson, Redhook Brand Manager, shared that Redhook will continue its focus on attracting the crossover beer drinker through media market expansion, strategic channel prioritization and sports programming centered around core brands like Long Hammer IPA. Olson also revealed that Redhook will add a new seasonal, Seedy Blonde Apple Ale, to round out the Redhook seasonal series. In its home market of Seattle, Redhook will continue to target sports beer drinkers with sponsorships of University of Washington Athletics and Seattle Sounders FC. Additionally, Redhook will launch a new sports seasonal line-up for Washington only: ECS No Equal Blonde, brewed in collaboration with the Emerald City Supporters, and False Start Session IPA, a beer brewed to honor Seattle’s notoriously vocal football fans. In Spring 2015, Redhook will launch a targeted media campaign promoting Redhook ESB, which remains Seattle’s largest craft beer brand.
  • Widmer Brothers Brewing will continue to celebrate its 30th Anniversary, which began in April 2014, with the remaining two releases in a series of limited-edition collaboration beers brewed with six of Oregon’s most innovative breweries and upcoming beers for the 30 Beers for 30 Years series, perhaps the most ambitious beer series ever from an American craft brewery. Casey Armstrong, Assistant Brand Manager for Widmer Brothers, shared that Upheaval IPA, which launched earlier this year, is now the fifth fastest-growing IPA in the US and will remain a brand priority in 2015 with a new, evolved package design. Armstrong also reinforced that Widmer Brothers will continue to invest in its flagship Hefe as the brand’s top priority, building on the home market success of the summer’s 100 Days of Hefe initiative where the brand realized volume, dollar sales and velocity growth. Hefe remains CBA‘s largest brand by volume, and Armstrong revealed that 2015 will see the introduction of Hefe Shandy, as further support of The Original American Hefeweizen.
  • Kona Brewing launched “Dear Mainland,” the biggest integrated marketing campaign in the company’s history, during the summer of 2014. In summarizing the campaign’s impact, Kona Brand Manager Aaron Marion revealed that in a pre-test of the TV ads, Kona earned the 3rd highest rank in branded beer advertising during 2014, which includes creative from the largest brewers in the country. Marion also highlighted that the campaign drove a remarkable 37% increase in sales volume in its target media markets. The results were quantified by a leading marketing mix modeling firm, which ranked the results in the 99th percentile – one of the strongest scores ever recorded. In 2015, Kona will continue to invest in marketing to drive awareness, with an emphasis on core brands Longboard Lager, Big Wave and Castaway IPA.
  • Senior Director of Commercial Partnerships Trent Tokos announced that CBA will continue to partner with the Chive’s Resignation Brewery, the world’s first social brewery, to leverage their strengths in the digital space and help extend its 25 million monthly online visitors to the offline world of beer. Earlier this year, the companies launched KCCO Black Lager, which has already expanded to 20,000 locations in all 50 U.S. states. Looking ahead, Tokos revealed that CBA will expand distribution of KCCO Gold Lager, with 6-pack bottles launching nationally in February of 2015. Additionally, CBA will launch KCCO White Wheat in Texas only, as it seeks to expand penetration in the brand’s home market.
  • Omission Brand Manager Lorin Gelfand referenced the significant acceleration of the overall gluten free market, which is predicted to exceed $15 billion in 2015, in outlining the opportunity for innovative gluten free beer brands like Omission. He then revealed that Omission, which launched in 2012, is now the #1 gluten free beer brand and is driving nearly 100% of segment growth. For 2015, the company will continue to focus on building awareness and distribution for its two core brands Omission Pale Ale and Omission Lager, as well as Omission IPA.

The second half of CBA-CON focused on underlining how the company brings its “body of a big brewer” to life through national scale and capability.

  • Scott Mennen, Vice President of Brewery Operations, and John Glick, Vice President of Supply Chain and Logistics, shared their plans to continue building on CBA‘s commitment to drive gross margin expansion through brewing and supply chain optimization. CBA‘s expanded production capability and footprint with its Memphis brewing partnership will play a key role in enabling the company to achieve its 2015 production and sales goals.
  • Peter Schauf, General Manager of the East Region, discussed the company’s retail chain management approach, emphasizing CBA‘s strength in securing feature and display activity in national chains. Earlier this year, CBA was recognized as the sole beverage company to earn Buffalo Wild Wings’ “Vendor of Excellence” award for 2013. Schauf highlighted that the focus in 2015 will be on maximizing package opportunities in grocery, and draught in casual dining and on-premise channels to support continued brand growth and awareness. Additionally, he shared plans to build CBA‘s can business in the convenience channel and take Omission to the next level through capitalizing on restaurants’ increased commitment to offering gluten-free options.
  • Dan Partelow, General Manager of the West Region, emphasized the competitive advantage of being part of the Anheuser-Busch InBev seamless distribution network. In 2015, the company will continue to leverage this advantage, with a focus on improving wholesaler partnerships through planning, communication, business development and retail execution.

CEO Thomas ended the conference thanking the company’s wholesaler partners for their continued support and encouraging them to join CBA in seizing the day and capitalizing on the “right now” opportunities that its distinctive advantages present.

About Craft Brew Alliance

CBA is an independent, publicly traded craft brewing company that was formed through the merger of leading Pacific Northwest craft brewers – Widmer Brothers Brewing and Redhook Ale Brewery – in 2008. With an eye toward preserving and growing one-of-a-kind craft beers and brands, CBA welcomed Kona Brewing Company in 2010, and then launched Omission beer in 2012 and Square Mile Cider Company in 2013.

When Kurt & Rob Widmer founded Widmer Brothers Brewing in 1984, they didn’t confine their brewing exploration to strict style guidelines. To this day, Widmer Brothers continues to create craft beers with a unique and unconventional twist on traditional styles that are award winning and please a wide range of craft beer lovers. Redhook began in a Seattle transmission shop in 1981 and those colorful roots are reflected in the brand’s personality to this day. The eminently drinkable beers consistently win awards and please crowds across the United States. Kona Brewing was founded in 1994 by the father and son team of Cameron Healy and Spoon Khalsa, who dreamed of crafting fresh, local-island brews with spirit, passion and quality. As the largest craft brewery in Hawaii, Kona personifies the laid-back, passionate lifestyle and environmental respect of the Hawaiian people and culture. Omission beer is the first craft beer brand in the United States focused exclusively on brewing great tasting craft beers with traditional beer ingredients, including malted barley, that are specially crafted to remove gluten. Square Mile Cider was inspired by the fortitude and perseverance of the original Oregon pioneers and reinvigorates this enduringly classic American beverage.

For more information, visit: www.craftbrew.com.

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