Boston Beer’s transformation from a craft brewer to an adult beverage company, which began in earnest about a decade ago, is looking like an even better bet as traditional beer’s declines outpace those of the beyond beer segment.
Traditional beer has declined about 5.5% in 2025, founder, chairman and CEO Jim Koch said Thursday during a call with investors and analysts to discuss the company’s third quarter. By comparison, the category’s non-traditional segments – hard cider, hard seltzer, flavored malt beverages (FMB), and other ready-to-drink (RTD) offerings – appear to be down “maybe 1% or 2%,” he said.
“Think of us as having a bias towards growth,” Koch said. “That is how we look at the world. We believe that we should be growing our revenue. As a company, we are heavily weighted away from traditional beer towards what people call beyond beer. I like to call it a fourth category because it’s not just beyond beer, it’s beyond liquor, beyond wine.”
Koch’s optimism comes after an expectedly tough quarter. Boston Beer’s shipments (sales to wholesalers) declined 13.7% and depletions (sales to retailers) declined 3%. Net revenue declined 11.2%, to $537.5 million. (See prior coverage of the quarter’s financial results.)
Beyond beer offerings now account for 85% of the company’s volume, driven by its largest brands, Twisted Tea and Truly Hard Seltzer. For the first three quarters of 2025 (data ending October 5), both have declined in dollar sales and volume in Circana-tracked multi-outlet grocery, mass retail and convenience stores (MULO+C):
- Twisted Tea, dollars -5%, volume -6.9%;
- Truly, dollars -14.4%, volume -16.2%.
The losses of both Twisted Tea and Truly – the category’s No. 10 and No. 14 largest brand families, respectively – have outpaced their segments’ declines. FMBs, to which Twisted Tea belongs, have declined 3% in dollars and 5.3% in volume year-to-date (YTD) through October 5. Hard seltzer has declined 5.1% in dollars and 7.8% in volume.
Twisted Tea’s declines “surprised us,” Koch told the analysts. The company had expected 7% dollar sales growth in 2025. The twin problems plaguing Twisted Tea are a loss of shelf space to spirits-based RTDs, including vodka-based teas, and excessive prices, he said.
Included in the set of space-stealing vodka-based teas is Boston Beer’s Sun Cruiser, the hard tea and lemonade brand the company launched last year. The company estimates 20% of Twisted Tea’s losses can be attributed to this group, but any share that Sun Cruiser has picked up “is revenue and gross margin accretive for us,” due to the brand’s higher price point, Koch said.
To combat softness in sales of Twisted Tea 12-packs, which the company said were priced higher than Constellation Brands’ Modelo Especial and Anheuser-Busch InBev’s Stella Artois at some retailers, Boston Beer is trialing 16 oz. can 4-packs priced at $10 and below in certain markets.
Twisted Tea Light (4% ABV) and Twisted Tea Extreme (8% ABV) have each gained shelf space. Boston Beer is adding an Extreme variety pack early next year, which may include Twisted Tea Extreme Long Island Iced Tea, which was unveiled earlier this month at the National Association of Convenience Stores (NACS) annual trade show, according to a Goldman Sachs report. The higher ABV line also includes Extreme Lemon and Extreme Blue Raz.
The brand’s media and sponsorship investment includes college football, country music, NASCAR and WWE, and it will continue to run Spanish language ads and content.
“Twisted Tea is our largest brand, and we’re continuing to support it with advertising investment and innovation,” Koch said. “We continue to believe that despite near-term challenges, these actions, coupled with an improvement in the macroeconomic environment will return the brand to growth in the long term.”
Similar to Twisted Tea Extreme, Truly Unruly (8% ABV) has injected some positivity in the beleaguered hard seltzer brand, which trails segment leader Mark Anthony Brands’ White Claw by more than $1 billion in off-premise retailers YTD through October 5, according to Circana. Truly Unruly has a 3% share of the hard seltzer segment, Koch said.
The brand is preparing to launch “Make Your Dreams Come Truly,” a new creative platform including content, regional media and retailer activations. Boston Beer continues to exercise restraint in innovation after paring down the Truly portfolio, which includes three light flavor variety packs (Berry, Citrus, Party), two bold flavor variety packs (Lemonade, Punch), two Untruly variety packs (Original, Lemonade) and a rotating seasonal variety pack.
Next year, Truly’s long-time sponsorship of the U.S. Soccer Federation will broaden its scope as the 2026 FIFA World Cup lands in 11 American cities. The partnership was recently extended to the American Outlaws, U.S. Soccer’s official fan club.
In its sophomore year, Sun Cruiser has become the fourth-largest spirits-based RTD brand, Koch said. After reaching national distribution in early 2025, the brand has gained large-scale chain placements and tripled its points of distribution. Sun Cruiser is the leading vodka-based tea and lemonade RTD in the on-premise, according to NIQ data cited by Koch.
To build Sun Cruiser’s momentum, Boston Beer is rolling out 19.2 oz. single-serve cans nationwide in early 2026 after a New England trial and sponsoring sports and music venues. The 19.2s will replace 24 oz. resealable cans.
“We believe Sun Cruiser will be the next iconic brand for our company and an important growth contributor for the beyond beer category,” Koch said. “We are focused on building the brand’s distribution, displays and retail promotion while investing in media and key sponsorships that keep the brand relevant throughout the four seasons of the year.”
Angry Orchard hard cider returned to growth in 2025, “driven by a higher level of focus across the organization, including increased investment and new sponsorships,” Koch said. YTD through October 5, dollar sales of flagship Angry Orchard Crisp have increased 3.1% and volume increased 2.1%, which accelerated to +7% and +6.5%, respectively, in the last 12 weeks (L12W).
The brand is gaining momentum going into Q4. In the one-week period ending October 12, Angry Orchard recorded double-digit growth in dollar sales (+16.5%) and volume (+13.1%), according to Circana. A spooky-season boost could be attributed to Angry Orchard’s seasonal programming featuring Jason Voorhees, the fictional killer in the popular Friday the 13th movie franchise.
Similar cultural partnerships are also buoying the company’s beer brands. Dogfish Head’s co-branded Juicy Pale Ale with the Grateful Dead has been extended.
In 2026, Samuel Adams will launch limited-edition packaging and a campaign to celebrate the country’s 250th anniversary.
Other highlights from the call …
- Boston Beer has raised its full-year gross margin guidance from 46%-47.3% to 47%-48%, due to cost savings in a variety of places, notably tariffs, CFO Diego Reynoso said. YTD, the company has absorbed $7.1 million in tariff charges, and expects to pay between $9 million and $13 million for the full year. As a result, Boston Beer plans to increase advertising investment during Q4, allotting $50 million to $60 million, up from $30 million to $50 million.
- The company has significantly improved its in-house production rate, up to 90% of its volume in Q3, compared to 66% in Q3 2024, Reynoso said.
- As other beer category players explore package format innovation in servings smaller than 12 oz., Koch said the prospect is “not that appealing” and the smaller size options, such as Constellation Brands’ Coronitas or New Belgium’s Voodoo Ranger Mini Rippers “don’t represent much value.”
- While innovations products such as Social Pop hard soda, Wild Leaf hard tea, Just Hard Squeezed hard juice and Sinless Spirits RTDs were on display at Boston Beer’s trade show booth at the National Beer Wholesalers Association’s Annual Convention earlier this month, there was no discussion of the products by name during the call. Both Koch and Reynoso alluded to “an additional innovation brand” and Sun Cruiser expansion in 2026.
With vodka-based Sun Cruiser playing a more meaningful role in the company’s portfolio, Koch was asked if he supported tax parity and expanded market access for spirits-based RTDs, which he first rallied the beer industry against in 2021. “Our position on equivalency hasn’t changed,” he said. “We believe there’s a difference between beer as the beverage of moderation, and our friends over in the spirits industry. We’re still with the Beer Institute on this.”