Boston Beer: Twisted Tea Strong But Competitors On The Rise


Twisted Tea continues to be the largest driver of growth for Boston Beer Co. as it tries to stem declines in Truly hard seltzer with flavor innovation and increased advertising.

Other soft spots in the company’s third quarter were cider brand Angry Orchard—and, on the beer side, Samuel Adams and Dogfish Head.

Boston Beer’s overall depletion rate—the number of cases resold by distributors—declined 6% from the prior year. Excluding Truly, the rate would have increased 14%.

“The Hard Seltzer category in measured, off-premise channels is down 15% on a volume basis through the first nine months of 2002, with Truly down 21%,” founder and chairman Jim Koch said on last week’s earnings call.

“We are working to improve Truly trends through a major product reformulation, including the addition of real fruit juice and sharpening our brand communication and increasing our media investment.”



In a post-earnings meeting with investment firm Cowen & Company, Boston Beer executives indicated that while Truly is #1 among 21- to 34-year-olds, the hard seltzer category is seeing a shift to lighter flavors.

In response, Truly has been reformulated with lighter flavors while discontinuing Truly iced tea but keeping the brand’s lemonade and fruit punch variations.

Flavored malt beverage Twisted tea continues to lead its category, but investment firm Evercore noted “the potential for increased competition from Simply Spiked, The Beast Unleashed and perhaps Cutwater.”

Moreover, although Boston Beer is partnering with PepsiCo Inc. on Hard Mtn Dew, PepsiCo will enter the hard-tea category next year in a licensing deal with FIFCO USA.

The Lipton-branded product will be distributed by PepsiCo’s Blue Cloud Distribution, which also handles Hard Mtn Dew.

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