Craft Brew Alliance (NASDAQ:BREW) continues to lean heavily on its Hawaiian-based Kona Brewing brand to keep sales growing, and its second-quarter earnings report scheduled for Thursday, Aug. 8, likely won't be any different.

The Kona Plus strategy is one that primarily emphasizes that one brand in Craft Brew's marketing, but also offers a modicum of support for the rest of its portfolio. The policy has mostly paid off.

Kona Brewing beer bottles and glass overlooking ocean

Kona Brewing beers. Image source: Craft Brew Alliance.

Although Craft Brew's total net sales fell 0.5% in the first quarter, Kona shipments jumped 10% from the year-ago period while depletions (or sales to distributors and retailers) rose 1.5%. A big marketing campaign around college basketball's March Madness tournament was a solid hit.

Coupled with a strong first-quarter performance from three newly acquired brands, Craft Brew Alliance looks poised for growth, but let's see what investors might expect this time around.

Is a buyout coming?

The elephant in the room for the brewer is the looming Aug. 24 deadline for Anheuser-Busch InBev (NYSE:BUD) to decide whether it wants to acquire the share of Craft Brew Alliance that it doesn't already own.

Under an agreement signed in 2016, the megabrewer has until that date to make a qualifying offer of $24.50 per share (about $475 million based on the number of shares Craft Brew had outstanding at the end of the last quarter), or else it has to pay Craft Brew $20 million.

A really strong quarter from Kona and its other rising craft beers might go a long way toward persuading Anheuser-Busch to make the deal, considering that North America was basically the one market where A-B has seen declines recently in sales and volume on an organic basis. The move to premium brands is still very much on trend here and elsewhere around the world, and adding these beers to A-B's portfolio could help advance that strategy.

If a buyout happens, it obviously doesn't matter much how Craft Brew Alliance performed this quarter.

It might depend on Kona after all

Looming tall over that decision, though, is Anheuser-Busch's massive debt load, currently in excess of $100 billion, that it is committed to paying down. It just agreed to sell its Australian beer business to Japan's Asahi, and it is still mulling whether to take its Asian unit public in an IPO. Having to shell out almost a half-billion dollars in an acquisition might not work for a brewer trying to save money, not spend it.

Which is why it's important for Craft Brew Alliance to put up some good numbers this quarter, and there's reason to believe it just might be able to.

Beer industry year-to-date sales are up 3.5% through mid-July, according to data from the market researchers at IRI. But that's mostly due to the growing popularity of flavored malt beverages like hard seltzer, which caused sales to surge 28%. Super-premium domestic beer also saw a jump of 12%, while imports grew 5.9%.

Craft beer is also up almost 3%, and though the top five craft brands are down, one of those reporting some of the best increases is Kona Brewing, with sales of its Big Wave Golden Ale surging 19% from last year.

On a more sobering note, when taking Craft Brew Alliance's total portfolio of beers into account, IRI says the brewer's sales are down 3.3% over the first half of 2019.

Industry data is complicated

Even though those statistics sound dire for Craft Brew Alliance, there's more to it than the industry data suggests. One thing to keep in mind is that the IRI data deals with just carryout sales, like from convenience stores and package-goods outlets. It specifically doesn't include on-premise sales at restaurants and bars. Nielsen surveys indicate on-premise sales are up, albeit just barely at 0.5%. Yet again, those numbers also include flavored malt beverages and hard cider, so the data isn't conclusive on the beer front specifically.

Craft Brew Alliance has said it didn't think that the sales bounce Kona Brewing gave it would last all year. But maybe all it needs is for it to last just long enough to convince Anheuser-Busch to make an offer.

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