Tilray Brands’ bev-alc net revenue increased +137%, to $76.7 million in Q4 fiscal year 2024 (FY24), as the global cannabis firm and “lifestyle brand” closed out its first year with the eight beverage brands it acquired from Anheuser-Busch InBev (A-B).
Tilray closed Q4 2023 (ending May 2023) with $32.4 million in net revenue from a bev-alc portfolio that included SweetWater Brewing, Montauk Brewing, Alpine Beer Company, Green Flash and Breckenridge Distillery. Nearly six months later, the company closed an acquisition of eight beverage brands, including seven craft beer brands, from A-B – Shock Top, Breckenridge Brewery, Blue Point Brewing, 10 Barrel Brewing, Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider and Hiball Energy – for $83.4 million in cash.
“These acquisitions were strategic in fortifying Tilray’s house of brands, strengthening our operations, and positioning the company as a leader across several industries and regions,” Tilray chairman and CEO Irwin Simon said in the company’s earnings release.
Tilray’s bev-alc net profit increased +146%, to $40.8 million in Q4 2024 versus Q4 2023, while adjusted bev-alc gross profit increased +130%, to $41 million. Additionally, the company’s bev-alc business exceeded its cannabis business in Q4, a first for the company. Bev-alc represented 33% of the company’s total revenue mix in the quarter, up from 18% in Q4 FY23, CFO Carl Merton said during a call with investors and analysts Monday following the company’s financials release.
Bev-alc gross margin increased from 51% in Q4 FY23, to 53% in Q4 FY24, while adjusted gross bev-alc margin declined from 53%, to 55%.
Tilray’s total net revenue across all its business increased +25% in the quarter, to $229.9 million, and gross profit increased +20.3%, to $82.4 million. For full-year 2024, Tilray’s net revenue increased +26%, to $788.9 million. Bev-alc accounted for 25% of that net revenue, while cannabis contributed 35%, distribution contributed 33% and Tilray’s wellness brands contributed 7%.
“As we progress through a full year with the new beverage alcohol brands, we anticipate these ratios to converge around 30% beverage alcohol, 30% cannabis, 30% distribution and 10% wellness,” Merton said.
Bev-alc net revenue for the full fiscal year increased +113%, to $202.1 million, while bev-alc gross profit increased +91%, to $88.6 million. Bev-alc gross margin declined from 49% in Q4 FY23, to 44% in Q4 FY24, while adjusted gross margin declined from 53%, to 46%, “reflecting lower contribution margins from the acquired brands,” according to the release.
Along with its brand acquisitions, Tilray credited its year-over-year (YoY) growth to “new production innovation.” In June 2023, Tilray lauinched Good Supply Light Beer, a light lager brand available in Georgia, Connecticut and New York (although the brand has been silent on social media since February 2024). In March, Tilray announced a lineup of new brands and innovations, including Shock Top LiiT, a 9% ABV non-carbonated hard tea; new Shock Top seasonals; non-alcoholic beer brand Runner’s High; canned water brand Liquid Love; HiBall Hard Ball, a 10% ABV flavored malt beverage (FMB); and Pub Ice, a Smirnoff Ice challenger brand launched through 10 Barrel.
“Back in 2019, Aphria [the company Tilray merged with] was a cannabis-focused Canadian LP with only $50 million in revenue and minimal cash reserves,” Simon told investors. “Since then, we’ve taken a strategic approach to diversifying our operations and growing our global businesses. Through a combination of organic growth, strategic acquisitions, we have disrupted the CPG industry by expanding our footprint into new markets and adjacent business categories.
“Today, Tilray Brands is a leading global lifestyle company, spearheading the conversion of cannabis, beverages and wellness products and is elevating lives through moments of connection,” Simon continued. “We are operating in more than 20 countries across North America, Europe, Australia and Latin America, with five businesses in medical adult-use cannabis, beverages, spirits, wellness products and 44 consumer connected lifestyle brands.”
Tilray claims it is now the fifth-largest craft brewery by sales in the U.S., with 4.5% share of the craft beer market. In 2023, the company was the sixth largest craft brewery by production volume, producing 461,097 barrels of beer, a -6% decline year-over-year, according to the Brewers Association (BA). The company now operates six manufacturing facilities across the U.S., as well as 11 “brew hubs” and one distillery, according to Simon.
Simon highlighted achievements from several of its craft brands:
- SweetWater remained the No. 1 brand family in Georgia off-premise channels;
- Montauk remained the No. 1 brand family in metro New York, and increased distribution by 570 basis points YoY;
- 10 Barrel increased volume by 640 basis points since joining Tilray’s portfolio;
- 10 Barrels’ Pub Ice and Pub Cerveza line extensions “have done extremely well in the market” and have 4,200 new distribution points;
- Tilray has cut Shock Top’s declines “in half” in the eight months since the brand’s acquisition, and the brand finished Q4 with dollar sales +13.5% YoY.
“As we have mentioned before, our vision is far beyond our current reach as we continue our focus to become a dominant leading beverage business by leveraging our portfolio of beloved local craft brand to win more hearts and occasions and bring these brands back to growth with innovation into new categories, including our non-alc beers, flavored malt beverages, ready-to-drink cocktails, spirits and beyond alcohol as we expand further into water, energy drinks and other categories,” Simon said. “We have the manufacturing facilities, the distribution, and the sales and marketing infrastructure, to drive growth in Tilray’s beverage businesses.
“We put a lot of innovation out there,” he continued, “and we’ve seen some great results so far from that.”
Beyond the previously mentioned new product launches, Tilray has also relaunched HiBall energy drinks, which were discontinued by A-B prior to HiBall’s sale to Tilray. The beverages are available direct-to-consumer through Amazon.
Tilray is also exploring hemp-derived Delta-9 THC beverages “strategically” and in selected markets such as Texas and New Jersey “where we can leverage our existing beverage distribution network,” Simon said.
“There are a lot of our beer distributors that have reached out to us and want the product right away, because they have seen in markets where it is how well the sales are doing,” Simon said. “We’ll look at rolling it out online in some markets, and the markets we feel that we can do it and we can do it legally, we’ll do it right.”
Tilray is projecting net revenues between $950 million and $1 billion for FY 2025, with mid-single-digits organic growth. The company did not share specific figures for its bev-alc brands in FY25. However, Simon said the company expects double-digit growth from both its cannabis and beer business in the next year, and that the company will sell between 12 and 14 million cases of beer.
The main focus for the company going forward will be strengthening its gross margin, which will benefit from “optimizing and enhancing” its production capabilities, and moving more production in house, Simon said. About 90% of Tilray’s bev-alc production comes from its own facilities, while A-B handles some of the volume from the brands acquired last year.
Additionally, Tilray is exploring ways to trim and streamline its distribution network.
“We have 500 distributors out there,” Simon said. “And some excellent distributors that came along with the ABI. Is there some consolidation opportunities there? And all these distributors are looking for more and more business, so how do we grow with them?”