Boston Beer Truly Hard Seltzer

Boston Beer (NYSE: SAM) will report Q1 earnings this Thursday after market close. The beverage alcohol giant had an impressive year with growth driven by the continued success of Truly Hard Seltzer. The earnings per share consensus estimate for the company is currently $2.39, an 81% increase over last year’s Q1. 

The $3.8 billion hard seltzer market has seen incredible growth over the past few years and is projected to become a nearly $11 billion market by 2027.

Truly Hard Seltzer has remained competitive, continually ranking #2 in the hard seltzer category behind Mark Anthony Brands’ White Claw. Truly brand currently controls 26% of the market share in the off-premise hard seltzer category, up steadily from the previous year’s 22%. White Claw has consistently controlled more than half of the market but Boston Beer investors hope Thursday’s report will show Truly narrowing the divide once again. 

In 2020 Truly Hard Seltzer sales increased more than 147%. Throughout the pandemic, Boston Beer has increasingly relied on Truly’s performance to drive the company’s success in the both revenue and profit. Three of the company’s major brands, Samuel Adams, Angry Orchard and Dogfish Head suffered declines in depletions attributed to quarantine regulations forcing a shift in consumer drinking habits.

However, Boston Beer reported a 37% growth in depletions in 2020 thanks to Truly Hard Seltzer as well as Twisted Tea. Twisted Tea currently controls 90% of the market share in the hard tea category and saw a sales increase of almost 32% in 2020. 

Boston Beer is the 4th largest brewer of beer in the United States but, like most in the industry, it has shifted some focus to hard seltzer. Constellation Brands (NYSE: STZ) reported Q4 numbers earlier this year and had Corona Hard Seltzer to thank for their growth. Similarly, Anheuser-Busch (NYSE: BUD) recently announced plans to invest $1 billion into their US manufacturing facilities in order to meet consumer demand for hard seltzer, like their popular Bud Light Seltzer. 

Dave Burwick, President and CEO of Boston Beer Company said regarding Truly’s future, “[W]e expect the Truly brand to continue to lead the growth of the business as it has come to stand for a great-tasting, refreshing, pure-play hard seltzer brand[…]We will continue to invest heavily in the broader Truly brand and work to improve our position in the hard seltzer category, as competition continues to increase.”

Banking on the success of Truly Hard Seltzer and Truly Lemonade, the brand recently added two new products to their repertoire. Truly Iced Tea Hard Seltzer hit the market earlier this year, followed quickly by Truly Extra. Truly Iced Tea Hard Seltzer blends seltzer with real brewed tea and comes in four fruit flavors–Lemon, Peach, Raspberry and Strawberry. Truly Extra, which launched in March, contains an ABV of 8% (compared to Truly Hard Seltzer’s ABV of 5%), and comes in two flavors–Black Raspberry and Peach Mango.

Investors await Boston Beer’s Q1 earnings report this Thursday to see just how much of an impact Truly Hard Seltzer has had on the company’s performance.

Shirani Jayasuriya
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