Dive Brief:
- Boston Beer lowered its projected earnings for 2022as the marker of Truly hard seltzer saw demand for the once fast-growing offering suffer during its second quarter. The company expects adjusted earnings per diluted share for the year to be between $6 and $11 per share,down from $11 to $16 predicted in April.
- Depletions during the quarter — a measure of sales to retailers by a distributor — dropped 7% from the prior year, reflecting declines in Truly, Angry Orchard, Samuel Adams and Dogfish Head brands. Excluding Truly, depletion volumes increased 14%.
- After years of triple-digit growth, hard seltzer has seen sales slow considerably as consumers turn to other alcoholic drinks. Few companies have been hit as hard as Boston Beer, which was among the biggest beneficiaries of the hard seltzer trend.
Dive Insight:
在已经成为波士顿的一个反复出现的趋势是什么er, the alcohol company reported a disappointing quarter as weak Truly sales weighed on its business.
一年前,Boston Beer President and CEO Dave Burwicksaid the company “overestimated the growth of the hard seltzer category in the second quarter and the demand for” its Truly brand. Since then, it has lowered earnings guidance and consistently warned of challenges to the brand. Its stock has been battered, dropping about 70% from nearly $1,000 a share in July 2021 to $300 today.
艰难的苏打水哈s seen its popularity dim as the once-sought-after drink has fallen out of favor. Instead, consumers are turning to back to light beer and embracing ready-to-drink cocktails like High Noon, which is made by winemaker E. & J. Gallo. Unlike hard seltzer, which is left to depend largely on flavor for variety, cocktails can also use different kinds of spirits and nonalcoholic beverages.
Brown-Forman and Coca‑Colarecently announced plans to introduce a ready-to-drink cocktail combining Jack Daniel’s Tennessee Whiskey and the iconic soda brand, whileDiageo is working with The Vita Coco Companyon a line of premium canned cocktails crafted with Captain Morgan rum and Vita Coco coconut water. For its part, Boston Beer haspartnered with Sauza tequila maker Beam Suntoryto launch Sauza Agave Cocktails.
Despite the recent erosion in its hard seltzer business, Jim Koch, Boston Beer’s chairman and founder, remained upbeat about the company’s prospects.
“Our company has strong brand building and innovation capabilities, the top-selling organization in beer, and a strong balance sheet to support long term growth, even as we navigate some challenges in the near term," he said in the earnings release.
Boston Beer’s earnings report has some bright spots. It reported increases in depletions during the quarter for Twisted Tea and Hard Mtn Dew,a drink it recently introduced in partnership with PepsiCo. Boston Beer also announced in May it would introducea new line of cannabis-infused iced teasin select Canadian provinces starting this month.
Overall, Boston Beer said depletions and shipments are forecast to fall between 2% and 8% in 2022 versus a previous estimate of an increase of between 4% and 10%. The change is due to further challenges in Truly and the launch of Hard Mtn Dew in certain states moving into 2023, the company said.
