Drinker’s tastes and priorities are shifting in a major way. […]
Has Boston Beer Company (SAM) FINALLY found its next big winner?
August 10, 2022
| In 2016, Boston Beer Company (SAM) made a big move – it launched a new product in the alcoholic beverage market: Truly Hard Seltzer. For years, this new fizzy drink drove explosive demand growth for Boston Beer Company…and its stock price. Shares of SAM soared for the next 5 years….until it all came crumbling down. |
| What happened? After multiple years of tremendous growth, consumer taste preferences shifted away from hard seltzers. But not only was growth slowing down in this segment, the market was flooded with new entrants. Think about the last time you were at the grocery store in the “beer” aisle. I bet you can’t count on two hands the number of hard seltzer brands on the shelf. This spelled big trouble for Truly, in particular. |
| You can see demand continue lower each year after peaking in 2021. Mentions this summer are currently placing -42% below where they were last year. SAM admitted they didn’t see this major shift in consumer behavior coming. Mis-managed inventory meant trashing millions of cases of excess Truly. But now, LikeFolio data suggests the tide is shifting back in Boston Beer Company’s favor. The company’s Twisted Tea brand is taking off. |
| Demand is being driven by new product launches, like Twisted Tea’s new limited edition Sweet Tea Whiskey, a product of Boston Beer Co.’s long-term strategic partnership with Beam Suntory. The product announcement on Aug 4th noted that the Sweet Tea Whiskey will only be available to limited markets. Nonetheless, the Twisted Tea brand already has consumers wrapped around its finger: |
| And strength in its classic beer brand, Sam Adams, is helping to bolster Buzz levels higher on a YoY basis after a period of weakness. |
We’ll be monitoring to see if this demand inflection point can sustain.
But it’s certainly a positive sign to see a new brand winner emerge in the company’s portfolio.
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