Hard Mtn Dew, Twisted Tea hold promise for Boston Beer as hard seltzer dips

Dive Brief:

• During the second quarter, Twisted Tea and Hard Mtn Dew, which is produced in partnership with PepsiCo, helped to offset decreases in Boston Beer Company’s core brands Truly Hard Seltzer, Angry Orchard, Dogfish Head and Samuel Adams, per a press release.
• The success of Hard Mtn Dew, which launched in February, has been largely built on football themed initiatives, especially in the collegiate realm, according to executives on an earnings call. The company plans on continuing such efforts into the months ahead. Additionally, the brewer plans on rolling out the drink in five more states in 2022.
• The company will decrease advertising, promotional and selling expenses between $30 million and $50 million for the year. Previously, it had expected to decrease the amount by up to $20 million.

Dive Insight:

Beer and hard seltzer alternatives have provided the Boston Beer Company with a lifeline as the company’s hard seltzer and beer offerings see a decline. Excluding Truly’s declines, the company’s cases sold actually increased 14% in the second quarter across the rest of the business, according to the company’s Q2 earnings. Boston Beer saw a net revenue increase of 2.2%, bringing revenue to $616.2 million, compared to net revenue released in Q2 of 2021.

Executives called out Hard Mtn Dew as a success so far despite a limited rollout since its launch in February. In the seven states it has launched in so far, it has captured an 18% share of flavored malt beverages in measured off-premise channels where it’s distributed in those markets. Increased rollout has been delayed due to a slower than expected regulatory process, per the company.

The brewer’s investments in products known as hard alternatives — single serving, low-ABV beverages that are not beer or seltzer — follows a trend seen across the industry. Molson Coors recently launched Simply Spiked Lemonade in collaboration with The Coca-Cola Company, to much initial success. As the hard seltzer craze seemingly begins to fizzle out, brands are desperate to introduce consumers to alternatives in order to ease the hurt to what has become a major part of the beverage industry in a short period of time. 

The Boston Beer Company is also feeling economic-induced woes. Increased shipping costs, amounting to $4.6 million, ate into savings created by lower media costs. Overall, advertising, promotional and selling expenses decreased 4.3%, or $6.7 million, from this time last year.

“We remain focused on building on the momentum of Twisted Tea and Hard Mountain Dew while we work on improving our gross margin trajectory,” said President and CEO Dave Burwick in a press release.