Boston Beer Company’s torrid run driven by Truly Hard Seltzer and Twisted Tea continued into the first quarter of 2021.
Through the first 13 weeks of 2021, Boston Beer — whose brands include Samuel Adams, Truly Hard Seltzer, Dogfish Head Craft Brewery, Twisted Tea and Angry Orchard — reported a 48% increase in depletions and a 60.1% increase in shipments. The company shipped about 2.3 million barrels of product during the quarter in an effort to build wholesaler inventories ahead of the summer selling period.
The increased shipments drove net revenue growth of 64.9%, to $545.1 million, an increase of $214.5 million compared to Q1 2020.
The shipment and depletion growth in the first quarter has led Boston Beer to revise its estimated full-year depletion and shipment growth upward to between 40% and 50%, a jump from the previous estimate range of between 35% and 45%.
“First quarter shipments growth was significantly higher than depletions growth as we took active steps to ensure that our distributor inventory levels are adequate to support drinker demand during the peak summer months,” Boston Beer CEO Dave Burwick said in a press release.
Burwick credited the depletions growth to Truly Hard Seltzer and Twisted Tea, which were partially offset by declines of the Samuel Adams and Dogfish Head beer brand and Angry Orchard cider, which have been hindered by the COVID-19 pandemic’s effect on the on-premise channel.
“The recently launched Truly Iced Tea Hard Seltzer has accelerated Truly brand growth, which has more than doubled since last year,” Burwick said. “In the first quarter in measured off-premise channels, the Truly brand outgrew the hard seltzer category by nearly 2X or 50 percentage points, resulting in a share increase of 6.5 percentage points. The Truly brand has now reached a market share of over 28%, accounting for approximately 40% of all growth cases in the hard seltzer category, which is two times greater than the next largest growth brand.”
Truly Iced tea has also claimed 4.3% of the market share in off-premise channels, Burwick added.
Meanwhile, Twisted Tea posted “double-digit volume growth,” which Burwick said was “significantly above full year 2020 trends.” Twisted Tea is on pace to “becoming the number one flavored malt beverage (FMB) by year’s end,” Burwick added.
Boston Beer’s Q1 2021 gross margin of 45.8% was a 1.0 percentage point improvement compared to Q1 2020, which the company credited to “price increases, the absence of the COVID-19 related direct costs incurred in 2020 and cost saving initiatives” at its breweries, which were offset by higher costs from producing at third-party breweries.
“While we anticipate delivering margin improvements in 2021, our gross margins and gross margin expectations will continue to be impacted negatively until our volume growth stabilizes,” Burwick said.
Boston Beer expects its full-year gross margin to be between 45% and 47%.