Commenting on Boston Beer’s upbeat Q4 results, Jim Koch who founded Samuel Adams Beer. referenced “challenges across the industry, including a general softening of the craft beer category.”
Jim Koch is a craft beer pioneer and he knows a thing or two about the drinks biz. And his appraisal that craft beer category is slowing is more than him acknowledging the struggles that his Samuel Adams brand has been enduring…it’s him saying that craft beer is no longer as vital as it once was.
First the good news, especially if you own Boston Beer stock (NYSE:SAM)…
Boston Beer ended the year on a high note, announcing strong fourth-quarter results and a modestly increased its 2019 outlook according to a financial analyst at The Motley Fool. As Steve Symington notes, “Boston Beer’s quarterly revenue increased 9.2% year over year, to $225.2 million, translating to earnings of $21.8 million.”
So why was Boston Beer Chairman Jim Koch so cautious? To many it’s obvious…
In spite of its name, Boston Beer is now a beverage company that in addition to being the second largest “craft brewer” in the US is also home to Truly Spiked & Sparkling hard seltzers , the Angry Orchard hard cider line and Twisted Tea malt beverage family.
It was the continuing success of its non-beer products that were responsible for Boston Beer’s strong Q4 results, not its heritage Samuel Adams brand, which in spite of the relative success of innovative new beers like Sam ’76 and Samuel Adams New England IPA, continues to decline.
And it’s not like Samuel Adams is doing anything wrong…they continue to innovate and address emerging trends with beers like their recently introduced Marathon 26.2 Brew…
But in a time of hyper-localism, when craft beer consumers increasingly infatuated with the newest breweries and brands, Samuel Adams finds themselves in a difficult situation, both too big and too old.
And being a publically-held company comes with baggage as well.
Boston Beer’s successes and failures are on full display to the world and subject to the kind of analytic dissection on a quarterly basis that puts them closer to Anheuser-Busch in the eyes of the craft beer consumer than it does to Trillium.
Not that that’s fair…but it is what it is.