Why Buffalo Wild Wings Is Crucial to Craft Brew Alliance

Beer and wings go together, but Craft Brew Alliance is going beyond delicious to turn the combination into a lucrative sales partnership with Buffalo Wild Wings. Here's what investors need to know.

May 4, 2014 at 2:15PM

Source: Buffalo Wild Wings.

Buffalo Wild Wings (NASDAQ:BWLD) recently named Craft Brew Alliance (NASDAQ:BREW) a "vendor of excellence," making it the restaurant's only beverage partner to garner the award this year. It may seem hokey to investors, but it emphasizes the lengths that Craft Brew Alliance will go to in an effort to grow its beer brands.

Buffalo Wild Wings is kind of a big deal
First and foremost, Craft Brew Alliance earned the award largely because of the exclusive beer it developed to complement the restaurant's chicken wings. Redhook Game Changer Ale ended up being one of the top-selling beers at Buffalo Wild Wings last year. That's good for both parties, but the brewer's deepening relationship with Buffalo Wild Wings is perhaps the most important takeaway here.

According to food industry tracker Technomic, Buffalo Wild Wings is one of the top three casual-dining restaurants for Americans who want to consume alcohol: An estimated 44.1% of patrons of legal drinking age order an adult beverage when they go there.

So if you're a brewer, it's obvious that Buffalo Wild Wings is a business you want to have an excellent relationship with. Craft Brew Alliance said as much in its recent annual 10-K filing:

Nationwide sales activation through robust partnerships with leading retailers such as Buffalo Wild Wings, Safeway, and Costco. We leverage our national sales and marketing capabilities and complementary brand families to create a unique identity in the distribution channel and with the consumer. Our sales force calls on all retail channels nationally, including grocery, drug and convenience stores, something most other craft brewers are not able to do.

Shipments of the company's Redhook brand grew from 191,000 barrels in 2012 to just shy of 217,000 barrels in 2013, and management largely attributed that growth to strategic marketing partnerships like this one.

Of course, there is the other upside to hitching your wagon to a star like Buffalo Wild Wings: The company is dead set on tripling in size. The restaurant chain currently sports 1,000 locations across North America, with plans to expand to 1,700 over the next ten years, and eventually to 3,000 locations. Hypothetically, even if the Craft Brew partnership only lasts long enough to see half of the expected growth over the next decade, management is still looking at 350 more retail outlets happy to serve Craft Brew Alliance beers to thirsty customers. As Buffalo Wild Wings grows, so does CBA.

Let's go back to the excerpt above for a moment, because it hints at another key strength for Craft Brew Alliance that's worth acknowledging. That is, that the company is investing heavily in its team to drive long-term success. 

Improve sales force, improve sales
It's easy to point to Craft Brew Alliance's distribution agreement with Anheuser-Busch InBev and assume that the company can rest on its laurels when it comes to selling its beer. But competition for retail shelves and barroom taps has never been more intense, and when it comes right down to it, A-B InBev offers a great distribution network, but CBA is responsible for actually selling its beverages.

Craft Brew Alliance fully understands the importance of strengthening ties with the wholesalers and retailers that ultimately move its products to consumers. That's why the company mandated that all customer-facing employees pass the first level of the Cicerone program to become Level 1 servers. Cicerone certification is similar to sommelier training for wine: If you complete all levels of training, you are a certified beer expert.

As of January, all 330 CBA employees had passed the first level of the exam. Though it's unlikely that the majority of CBA employees will move past the first round of certification, it does establish a baseline of knowledge, and it adds a tool to the arsenal of the company's sales team.

Foolish takeaway
Craft Brew Alliance is establishing itself as a savvy marketer in the beer world, establishing key partnerships and educating its sales force in order to grow sales volumes. So far, it's working. Other brewers would be wise to consider doing the same.

Head to the bar, leave your wallet at home
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Aimee Duffy has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Buffalo Wild Wings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information