Boston Beer had a great 2018, launching three new ‘lifestyle’ brands in 2019

The Boston Beer Co. reported fourth quarter 2018 net revenue of $225.2 million, an increase of $18.9 million or 9.2 percent from the fourth quarter of 2017, mainly due to an increase in shipments of 6.3 percent. Here are the main storylines from the year-end earnings report.

Depletions improve

Depletions increased 13 percent in 2018, and that trend looks to continue: Year-to-date 2019 depletions through the six weeks have increased approximately 12 percent from the comparable weeks in 2018. Full-year 2019 depletion and shipment growth is now estimated between 8 percent and 13 percent. Dave Burwick, the company’s president and CEO, attributes this to increases in its Truly Hard Seltzer, Twisted Tea and Angry Orchard brands “that were only partially offset by decreases in the Samuel Adams brand.”

“In 2018, we increased the usage of third-party breweries in response to our accelerated depletions growth, especially in slim can packages and cans in general, and faced industry-wide headwinds of higher packaging costs and transportation costs,” Burwick said. “Our overall plans for 2019 include significant investments in the second year of our successful 2018 innovations, which include Angry Orchard Rosé, Truly Berry Variety Pack, Truly Wild Berry, Sam’76 and Samuel Adams New England IPA. In 2019 we plan to build upon these successful innovations with three additional brands that address important health and wellness opportunities in our categories.”

Thee new “lifestyle” brands

These brands include: 26.2 Brew from its wholly-owned affiliate Marathon Brewing Co., a gose beer made with sea salt; Wild Leaf Hard Tea, a craft hard tea with lower calories and sugar; and Tura Alcoholic Kombucha, an organic, light and refreshing shelf-stable alcoholic Kombucha with live probiotics and real fruit.

“We are now in the very early stages of our national launch of both 26.2 Brew and Wild Leaf, and we will launch Tura later in the quarter on a more limited geographic basis,” Burwick said. “To date, the response from our distributors, retailers and drinkers on these new brands has been very positive, but it’s too early to draw conclusions on the long-term impact. We’re in a very competitive business, and we remain optimistic for continued long-term growth of our current brand portfolio and our innovations.”

There are even signs of life from sales of Boston Lager

“We are still seeing challenges across the industry, including a general softening of the craft beer category and retail shelves that offer an increasing number of options to drinkers,” stated Jim Koch, chairman and founder. “While it’s still early, it appears that our new advertising campaign has noticeably improved Boston Lager’s trends. We plan to continue to invest in this campaign in the coming months, with the goal of further improving trends and returning Samuel Adams to growth. We are confident in our ability to innovate and build strong brands and we are planning to launch three new brands in 2019 that we believe will complement our current portfolio and help support our mission of long-term profitable growth.”