(Boston, MA) – The Boston Beer Company released its Q4 2011 earnings late this afternoon. Though earnings from a financial perspective were just fine, long-term brand health is a bit murky and the tone of the conference call reflected this. Here is a breakdown of the company’s reported Q4 earnings along with comments pertaining the craft category as a whole…
1. SOLID GROWTH: BeerPulse observed late last year that Twisted Tea is poised to take over Boston Lager as the company’s #1 brand in the off-premise channel in 2012 based on IRI scan data. Twisted Tea’s Q4 growth was the main highlight for yet another quarter and growth is likely to accelerate going forward. “In 2012, we will complete our national rollout with the addition of fifteen states and anticipate continued growth across all our markets as we close distribution gaps with key competitors.”
2. Q4 DEPLETIONS DISAPPOINTMENT: Overall, it was a really disappointing quarter for the Samuel Adams brands to the point that Jim Koch joked that they were crying in their beer. At the end of the third quarter, the company issued guidance that it was raising full-year depletions projections to between 7.5-9%. In Q4, depletions grew only 4% for the fourth quarter and 7% for the full year. Seasonals grew while Boston Lager, Sam Adams Light and the Brewmaster’s Collection set declined. Time to revive Boston Lager sales with cans?
Non-contract barrels sold on the year was 2.471 million.
3. CATEGORY LAGGARDS: Keep in mind that a) Twisted Tea is leading that growth and b) the craft category, as a whole, is growing at a rate around 14-15%. Those numbers don’t include Blue Moon or Shock Top either, both of which are lighting up the registers. Blue Moon has a bigger base to grow off of than Samuel Adams (3 million-ish barrels versus 2.4 million barrels) and Blue Moon was up 20% on the year.
One thing to note from the 10-k that seemed peculiar. The company estimates the craft category volume to be at only 12-14% growth on the year whereas the Brewers Association reported volume to be up 14% in the first half. Interestingly enough, the only news that has surfaced in 2012 that would drag that 14% number down at all is this earnings report. Boston Beer accounts for over 25% of the craft category (as defined by the Brewers Association which excludes Tenth and Blake, etc.)
4. 2012 DEPLETIONS OUTLOOK: The company is estimating 2012 depletion growth of between 6% and 9%. “Year-to-date depletions reported to the Company through February 10, 2012 were up approximately 8% to 9% from the same period in 2011 with the same number of selling days.”
5. SPRING CAME EARLY IN 2012: That said, shipments were up 19% in Q4 to 671,000 barrels. The press release explains, “Shipments in the fourth quarter were higher due to the extra shipping week in the fiscal quarter versus last year, and the earlier shipment of our Samuel Adams Spring Seasonal relative to last year, as we accomplished a conversion from our Winter Seasonal to the new Alpine Spring in early January in most of our markets.”