As Samuel Adams growth lags behind craft peers, company revamps brand look

Samuel Adams Boston Lager body label

(Boston, MA) – The Boston Beer Company just released its second quarter earnings report, revealing another mixed bag of a quarter for craft’s biggest player.

The makers of Samuel Adams raised its full-year depletions growth projection from 6-8% to 9-12%, crediting growth from Twisted Tea and Angry Orchard Hard Cider as two main drivers. On the beer side, Sam Adams seasonals were strong again as the company moved through Summer Ale a bit faster than it expected. Octoberfest is shipping about a week early as a result.

What is holding down growth is other Sam Adams brands. Recent Symphony IRI scans show double-digit losses for Samuel Adams Boston Lager, Samuel Adams Light and Samuel Adams Cherry Wheat in supermarkets over the past three months (ending July 8th). Admittedly, that is only part of Boston Beer’s sales picture but one of the only publicly available pieces of data we have as Boston Beer sheds very little light on how sales stack up across its businesses: traditional malt beverages, flavored malt beverages and cider.

While the health of The Boston Beer Co. as an overall “alcoholic beverages” business is fairly strong, the health of the Samuel Adams brands, in particular, is questionable as the growth of that brand family lags the greater craft beer category by a wide margin. That is not to say that the company isn’t trying.

CEO, Martin Roper, says that growing Samuel Adams is “the company’s #1 priority.”

Boston Beer has done some things to differentiate on the beer side. There is the 2011 launch of the Small Batch Series which has already seen many new beers and side projects like the Barrel Room Collection, Brewlywed Ale and the forthcoming New Albion Ale. Compared to the rest of the business, much of that barely impacts the bottom line though. The company continues to grow its Freshest Beer Program and hopes to have 75% of volume accounted for in the program by the end of the year. The just-in-time program is thought to help improve beer freshness for the drinker and reduces the number of cases on the floor at wholesaler partners.

Boston Beer announced on the call that it is about to push the envelope even further.

A number of labels showing new artwork have come through for brands like Samuel Adams Boston Lager (shown above), Samuel Adams Light and Samuel Adams Noble Pils. Octoberfest has already arrived in some markets and is the first to get the facelift. More brands will carry the new look come September and October.

The change marks a milestone of sorts for the company. Core craft drinkers have rebelled against the notion of “innovation” on the beer label itself and generally associated these changes with large mega brewers. Boston Beer may get a pass because it is just changing the artwork whereas Miller Coors, for example, has introduced “innovations” like Cold-stage activation and the vortex bottle.

Boston Beer may be looking to Redhook, who appears to have begun brand recovery after the worst sales slump of its existence. However, Redhook’s recent signs of recovery come after multiple branding do-overs that may have accelerated decline. Recently, Pyramid Breweries also admitted that it “Hefe’d up” when it changed the look of its brands.

Meanwhile, drinkers have accepted and even embraced changes in containers like 22 oz. bottles, cans and variety packs over the past few years. Some companies are using new packages to boost “flagship” brands with Sierra Nevada Pale Ale in cans being a prime example. Chairman, Jim Koch, who was more quiet on the second quarter call than he has been on recent ones, remains concerned about beer quality and consistency in cans though the customer may force Koch into a decision sooner than later.

Boston Lager continues to bleed and we’re seeing more and more volume from the company rapidly shift away from traditional malt beverages.

Boston Beer may be in a “damned if it does, damned if it doesn’t” scenario when it comes to how to grow Samuel Adams.

5 thoughts on “As Samuel Adams growth lags behind craft peers, company revamps brand look

  1. I would expect Sam Adams/BB to lag most other breweries’ growth. They’re a mature company with a presence in every state (I think) and therefore lack the ability to grow by adding markets. Even a big gun like New Belgium still has the entire eastern seaboard left as a new frontier to fuel its growth.

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