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More About Redhook's Return to Seattle

May 13, 2015 - 11:27 AM
- by Kendall Jones, Washington Beer Blog -

We recently reported on Redhook’s plans to open a brewpub in Seattle, in either Ballard or Fremont. Now we gain some insight into the company’s thought process.

Craft Brewers Alliance (CBA), the Portland-based company of which Redhook is part, released its quarterly report on Wednesday. I’m not going to go into much detail about the report. It’s boring. You can read it here if you want. Instead, I’ll get straight to the part about Redhook opening a brewpub in Seattle.

One thing the report made clear, the company is focusing on, and continues to appreciate, the strength of its brands in their home markets. For Redhook, that’s Washington and, more specifically, Seattle.

According to a statement from Andy Thomas, the CBA’s Chief Executive Officer, “In our home markets of Hawaii, Oregon, and Washington, depletion volume grew 8 percent over the first quarter of 2014, which we attribute to the continued strategic focus on strengthening our core brands in their home states.”

In this sense, depletion volume refers the amount of beer moved (sold) from the distributor to the retailer.

So what does that mean? In a teleconference with analysts he explained that the company has a focus on selling its core products (Redhook, Widmer, and Kona) in their home states. Redhook in Washington, Widmer in Oregon, and Kona in Hawaii.

“We continue to believe that this momentum, coupled with the strategic investments in our home markets, will enable us to realize our vision for meaningful and sustained growth over the long term,” Thomas said.

Overall, depletion volume increased in home states by 8 percent, but within that growth, Redhook suffered in the first quarter of 2015 – down 16 percent.

My take on it is that CBA thinks its brands will perform best if they continue to have a local connection to the places where they were born. Widmer and Kona are doing fine at home, but Redhook needs to pick up its game.

“Our home market strategy the most profitable and the most crucial to the health of those brands,” Thomas said. He explained that the plan to build a brewpub in Seattle will “reconnect the Redhook brand to the heart of Seattle.”

I get it. If opening a brewpub in Ballard or Fremont helps Redhook regain credibility with the thirsty masses in the Seattle beer market, that’s good for the brand and the bottom line. It’s more about strengthening the brand in the market than it is selling pints at the new pub.

 
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2252 NE 65th St., , Seattle, WA 98115 / PH. 206.795.5510 / SITEMAP
2252 NE 65th St.,
Seattle, WA 98115
PH. 206.795.5510
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