Anheuser-Busch Extends Partnership With Craft Brew Alliance
Anheuser-Busch InBev (NYSE:BUD) has renewed its business agreement with Craft Brew Alliance (NASDAQ:BREW) for another ten years. The agreement maintains a distribution agreement and lay out plans for future expansion. The agreement will strengthen the companies’ long-term relationship and create new growth opportunities for both companies.
Craft Brew Alliance brews, brands and markets some of the world’s most respected and best-loved American craft beers. CBA is headquartered in Portland, OR and operates five breweries and five pub restaurants across the U.S. Anheuser owns and operates 19 breweries, 21 distributorships and 22 agricultural and packaging facilities.
The agreement included an amended and extended master distribution agreement and a new international distribution agreement. Anheuser distributes beers nationally for the brewing group. The amended agreement secures CBA’s brands in the industry’s strongest wholesaler network. According to a release from the craft brewer, the partnership plans to take the beers internationally. CBA did not specify where the targeted countries might be.
As part of the agreement, Anheuser will provide additional support and commit further resources to accelerate CBA’s growth strategy. The craft brewing group currently includes Kona Brewing in Hawaii, Red Hook in Washington, Resignation Brewery in Texas and Portland-based brands Widmer, Omission, and Square Mile Cider. Kona Brewing Co. is one of the fastest-growing American craft brands.
The agreement also included a new contract brewing arrangement. Under the agreement, Anheuser plans to start brewing some of it’s partner’s beers. The partners plan to transition 300,000 barrels of production from the craft breweries to Anheuser facilities. On top of the Bud and Busch brews, Anheuser-Busch currently brews the Leffe, Hoegaarden, Landshark Lager, Natural Light, Michelob, Shock Top, and Bass Pale Ale brands. The specific brands for the deal have not yet been determined.
Anheuser-Busch executive Felipe Szpigel said in a statement, “We have deep respect for CBA and these agreements represent a natural progression of our relationship with them. As a company, we believe in brewing amazing beers and elevating the sophistication of beer and the category as a whole. CBA shares these beliefs and today’s announcement will help bring CBA’s impressive portfolio of craft brands to more beer lovers in the U.S. and around the world.”
CBA and Anheuser will work together over the coming months to implement the brewing and international distribution aspects of these agreements. CBA is expected to gain significant financial benefits from these commercial agreements. As a major CBA shareholder, Anheuser is positioned to benefit directly from those gains. Anheuser owns almost 33 percent of Craft Brew Alliance.
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