Dear Client:
With revenues up 18% and depletions up 8% in the first quarter, Boston Beer is certainly off to a strong start in 2018. The question is can they keep it up?
That query was lobbed in various ways to the company on yesterday’s earnings call and the Boston brass remained conservative in their responses.
As you’ll recall, the hot start didn’t sway Boston Beer to change their guidance. They’re sticking to their forecast on full-year depletion and shipment change at between flat and plus 6%.
CFO of Boston Beer Frank Smalla said on yesterday’s earnings call that because the company was down so significantly in Q1 of 2017, that they had planned for the first quarter of 2018 to be “pretty much the best quarter of the year” when it comes to growth rates.
So, yeah, the easy comps definitely played a role in yesterday’s earnings, still, it appears as though Boston is on to something with their new innovations, specifically, Angry Orchard Rosé and Sam ’76. Founder Jim Koch said he believes the two are the number one and number two new innovations, respectively, in beer.
But as you know we sometimes see new brands start off hot and catch a cold spell shortly after. That said, Frank noted that they “want to see more repeat in the market” with their new innovations before jumping to any conclusions.
Indeed, ‘wait and see’ was a common theme in yesterday’s call.
When Jim was asked about Angry Orchard Rosé’s potential, he said that though the company is “optimistic” with the new brand, they still “want to see longer term what’s the trial and repeat of that trial.”
So we’ll get a better idea of what these brands are made of in the back half of the year. In between then, however, it appears there’s still a good deal of growth out there for Boston’s new innovations as they still have a lot of distribution run room. Jim took a “wild ass guess” and estimated that they were “halfway through the distribution of the new products” at the end of March. “So we do see some upside in the second quarter,” he concluded. We’ll let you know what that “upside” looks like when Boston’s Q2 earnings roll around. Stay tuned.
DENIZENS SET TO OPEN SECOND LOCATION IN MARYLAND
Denizens Brewing Company, a four-year-old brewer out of Silver Spring, Maryland, has signed a lease for a 12,000-square-foot space in the Riverdale Park Station, a mixed-use development near Hyattsville, MD.
Denizens will house a 30-barrel brewery at the new digs and up to ten 60-barrel fermenters, per Patch. The brewer will also dedicate a third of the new space to a taproom with indoor and outdoor seating, Emily Bruno, director of business operations at Denizens tells the outlet.
The taproom will boast a variety of Denizen’s beers and “locally made liquors, meads, wines and the occasional guest beers” as well, per report. Consumers in the area can stop in for some food too. Denizens tells Patch that they’ll be have “brunch, lunch, dinner as well as late night snacks” on deck. Indeed, Emily told the outlet that they “will offer a late night menu and have some extended hours going a little later than most restaurants in the area.”
Emily said they’ll start construction this summer and hope to open it up by year’s end.
BEER BRIEFS:
NEW YORK BREWER UP FOR SALE. Horseheads Brewing Co. of Horseheads, New York is up for sale, per Syracuse.com. The sale comes as owners Ed and Brenda Samchisen look to retire from the beer business. “It’s been a good run,” Ed told the outlet. “Now we’re headed to a condo in Florida.” The eight-year-old brewer was a two-time recipient of the F.X. Matt Cup an award given to the “Best New York State Brewery” at the state’s largest craft brewery festival — TAP New York. Horseheads took the honors in 2010 and 2015. The brewer sales beer out of their tasting room there in Horseheads and distributes their beers “across the Southern Tier and Finger Lakes, and Buffalo, Rochester and Syracuse,” per report. Horseheads’ brewery “is listed for $625,000 in a ‘turnkey’ sale,” according to the outlet. Ed said that price tag includes their production facility, everything inside of it, beer recipes and more.
Until tomorrow,
Jordan, Jenn, and Harry
“To live a creative life, we must lose our fear of being wrong.”
– Joseph Chilton Pearce
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