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Craft Beer CEO Keeps Clear Head On Sales

Redhook puts your company in a rare position among craft brewers by giving it a 30-year-old brand to maintain. How do you bring new energy and drinkers back to that brand?

Michaelson: The interesting thing for us at this point is that beer consumers and craft beer consumers in particular expect variety and diversity in their beer offerings. Although it's a challenge to figure out how to communicate how each brand is unique, that's also the thing that makes it exciting for us.

For Redhook, it's about connecting that unique personality and that quirkiness that's been a part of it. What we're finding is that it's about getting the beer in the right places and communicating it the right way. The challenge is just getting people to experience that because, once they do, we're having a positive experience.

For us it is somewhat unique to have a brand like Redhook that's been around for 30 years, but it's helped in this industry in that we have Kona, which people are discovering and haven't had the chance to experience, and Redhook, which is one of the older brands in the industry where a lot of people are rediscovering, so that helps us deliver that diversity.

One of the places where your company is most able to make up ground on competitors is through distribution, and the partnership with Anheuser-Busch InBev has a lot to do with it. How does that partnership continue to benefit the Craft Brewers Alliance and its brands?

Michaelson: The A-B relationship is about the distribution connection. For them, it was about making sure they had what they considered high-quality craft beers available to their distribution network early on when the segment was just expanding.

Having an integrated distribution system where we're able to get to market directly, where there's consistency in the systems and how they interface and where we can trust the quality, how they care for our beers and how they go to market -- we see that as a definitive advantage we have. We're the only craft brewer that has that aligned, integrated distribution network, which we think makes a big difference in the way retailers get the beer, the way we get to market and the freshness and quality of it.

Anheuser-Busch reduced the CBA's nearly $6 million distribution fee 30% a year ago and a lot of that savings went toward brand promotion. How has that worked out for the alliance?

Michaelson: It's worked out very well, and I think that's reflected in our performance at the top line in the first half of the year, specifically in the second quarter. Shipments of our core brands were up 10%, and I think that's an indication that we've been able to spend the money to help people find and experience our beer.

For the customer, it's about drinking occasions. The customer's looking to have a beer after they've mowed the lawn, at a white-tablecloth restaurant, at a barbecue -- all of those. Our portfolio delivers the styles and the brands that fit those, so having more money allows us more distribution, allows us to do unique sponsorships and events and will allow the consumer to interface. The end result is moving the top line, and that's good financially, but it indicates that the customer is appreciating it.
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