Boston Beer Sales Up 1% in Quarter, but Depletions Fell 3%; Net Up

Boston Beer Co. reports second quarter 2017 net revenue of $247.9 million, an increase of $3.1 million or 1%, from the same period last year.  Net income for the second quarter was $29.1 million, or $2.35 a share, an increase of $2.5 million or $0.29 per diluted share, from the second quarter of 2016.  This increase was primarily due to increases in net revenue and an increase in gross margin that were partially offset by increased advertising, promotional and selling expenses.

Depletions decreased 3% from the comparable 13-week period in 2016.

Shipment volume was approximately 1.1 million barrels, flat to the comparable 13-week period in 2016.

The Company believes distributor inventory levels at July 1, 2017 were appropriate. Inventory at distributors participating in the Freshest Beer Program as of July 1, 2017 decreased slightly in terms of days of inventory on hand when compared to June 25, 2016. The Company has approximately 78% of its volume on the Freshest Beer Program.

Gross margin at 54.1% represented an increase from the 51.8% margin realized in the comparable 13-week period in 2016, primarily as a result of lower brewery processing costs per barrel due to cost savings initiatives and increases in revenue per barrel due to pricing and package mix.

Advertising, promotional and selling expenses increased $4.6 million from the comparable 13-week period in 2016, primarily as a result of higher media spending and salaries and benefits costs partially offset by efficiency driven decreases in point of sale spending and freight to distributors due to lower freight rates.

General and administrative expenses decreased by $2.4 million from the comparable 13-week period in 2016, primarily due to decreases in stock compensation, consulting and legal costs.

Impairment of long-lived assets increased $1.5 million from the comparable 13-week period in 2016, primarily due to the write-down of brewery equipment at the Company’s Pennsylvania and Cincinnati Breweries.

Martin Roper, President/CEO, attributed the second quarter depletions decline was primarily due to decreases in our Samuel Adams, Coney Island and Angry Orchard brands that were only partially offset by increases in our Twisted Tea and Truly Spiked & Sparkling brands and a slight benefit from the timing of our fiscal quarter end in relation to the fourth of July holiday.  We are encouraged by the improving total Company depletions trends since the first quarter.

“Twisted Tea continues to grow distribution and pull, and Truly Spiked & Sparkling has developed as one of the leaders in the emerging segment of hard sparkling water.  Most of our volume declines for the quarter resulted from the underperformance of our Samuel Adams brand, which, despite volume declines, showed sequential improvement relative to first quarter performance.

“We are working to improve our Samuel Adams trends by focusing on sales execution, new messaging through media and point of sale and continued innovation.  In the second quarter, we saw continued declines in the cider category and in our Angry Orchard brand, but we have maintained our high share of off-premise tracked channels and are focused on turning the category and brand trends around.

“For the rest of the year we expect to see the continuing impact from the Truly Spiked & Sparkling roll out relative to last year and continued strength in Twisted Tea, and are committed to improving our Samuel Adams and Angry Orchard trends.”

Roper said Boston Beer’s priorities for 2017 remain unchanged.  “Our number one priority is returning both Samuel Adams and Angry Orchard to growth through continued packaging, innovation, promotion and brand communication initiatives, while maintaining Twisted Tea’s momentum.

“Our second priority is a focus on cost savings and efficiency projects to fund the investments needed to grow our brands.  We have adjusted our organization to the new volume environment, while preserving the capability to innovate and return to growth.  We believe that the results of these initiatives are starting to show in our reported gross margin improvements and in our operating expenses, and have allowed us to increase our brand investment spend during the quarter.

“Our third priority is long-term innovation, where our current focus is on ensuring that Truly Spiked & Sparkling reaches its full potential, and our long-term intent is to generate a consistent cadence of interesting brand innovations.”

Jim Koch, Chairman/Founder, said: “We are happy that our total Company depletion trends have significantly improved from earlier in the year, but we remain challenged by the general softening of the craft beer and cider categories and a more competitive retail environment with a lot of options for our drinkers.  We are working hard to return to growth through improving our messaging and innovation behind Samuel Adams and Angry Orchard.”

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Marie Brizard U.S. Sales Post Single-Digit Rise

Marie Brizard’s reconfigured route-to-market has begun to show positive results in the U.S., the company said.  Sobiesky shipments are up in the second quarter compared to a year earlier, and on-hand inventory levels have fallen.

The company noted that Sobiesky volume in Control States rose 2.5% vs. a 0.5% drop for imported vodka in the period.

For the global company, net sales were up 4.8% worldwide.  Jean-Noel Raynaud, ceo, said the company’s sales have resumed their growth in Poland, increased slightly in the U.S. and are growing very strongly in Asia Pacific.

“The relaunch of Marie Brizard is showing positive results, and that brand contributed to net sales growth” in the second quarter.

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Estrella Jalisco Debuts First Premium Foil Top Canned Beer in U.S.

The new seal elevates the canned beer category while adding as layer of protection during the import process, the company said.

“We take pride in the quality and heritage of Estrella Jalisco, and strive to ensure that our consumers have an excellent experience when consuming our carefully crafted brew,” said Yonathan Bendesky, Brand Director for Anheuser-Busch, Mexican Imports.

“The foil top is a threefold opportunity for us: the innovation adds a premium element to our consumer’s experience, it allows our brand to differentiate itself in the marketplace, and it introduces an upgrade within the canned beer category,” he said.

Estrella Jalisco is launching the foil top seal at a time of significant growth in the canned beer space. According to the Beer Institute, more than 55% of beers consumed in the United States are served in cans and that number continues to rise as more brands package their product in cans. Estrella Jalisco is embracing and upgrading that trend by providing the protective seal onto their 24-ounce cans.

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Coppola Winery Canning Diamond Collection Wines

The move solidifies Francis Ford Coppola Winery‘s position as the leading premium wine producer in the canned category says Corey Beck, President and Director of Winemaking.

“It was Francis’s instinct and creativity that first brought wine-in-a-can to the forefront of the wine industry with the introduction of the Sofia Mini cans more than a decade ago,” Beck explains.  Continue reading

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Drizly Launches Data Distillery

The new hub is a breakthrough that will, for the first time, let suppliers from multi-category international brands as well as bootstrapping craft breweries better assess the effectiveness of their promotional campaigns, and see precisely what their products are selling for, neighborhood by neighborhood. The raw data and aggregated findings are based on millions of orders in 70 cities across the U.S.

Until now, granular data from eCommerce consumers and independent retailers on pricing, Continue reading

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Claremont Distilled Spirits Licenses Bibo Barmaid Pouch System

“Having the ability to enjoy great tasting cocktails at home is the ultimate convenience. They are quite complicated to make and Bibo takes the guesswork and expense out of the process. Making Bibo cocktails is super easy: turn it on, fill the reservoir with cold water, insert a cocktail mix and alcohol pouch, place glass with ice on the drip tray, pull down the handle and press the “Mix” button – in 20 seconds, voila a drink!,” says Debra Walker, Bibo founder.

Amy Sutton, Co-Owner & VP of Sales and Marketing of Fairfield, N.J., Claremont, says:

“The spirits industry has been trying to figure out how to help consumers enjoy spirits in their home for many years, a majority of consumers find making cocktails intimidating; Bibo is the solution we have been waiting for. It’s extremely simple to use and the results are craft cocktail worthy.  We are excited about the pouch launch for our vodka brand in December.”

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