In a heavy Boston Beer Company news week — executive salaries and bonuses announced, Truly Hard Seltzer strategy and packaging reset, early full-year earnings, and investor call and 2023 strategy — I wouldn’t blame you if you missed out on some of this week’s headlines.
Chief among them: I believe we have our first craft-on-craft deal of the year. Drake’s Brewing Company in San Leandro, California, is acquiring the assets of Bear Republic Brewing in Cloverdale, and bringing on co-founder Richard Norgrove and brewmaster Peter Kruger.
The deal is for the brewery’s intellectual property and recipes, but not the brewery. You don’t have to be an oracle to predict more of these types of deals to come.
Bear Republic produced 36,827 barrels, while Drake’s produced around 29,700 barrels, according to Brewers Association (BA) data from 2021. Jess noted that their combined output of 70,214 barrels would make them the 39th largest BA-defined craft brewery by volume.
Back to Boston Beer. A few interesting notes from the week:
- Boston Beer shipped 8.2 million barrels to wholesalers, marking a -3.8% decline compared to 2021. Depletions (shipments to retailers) also declined by -5%’
- Boston Beer recorded a net loss of $11.4 million during the fourth quarter and expects to record another loss in Q1 2023;
- The company’s full-year net revenue increased +1.6%, to $2.09 billion, and it recorded net income of $67.3 million;
- Texas is now the largest volume state for Twisted Tea;
- Although Boston is going deeper into vodka-based RTDs, CEO Dave Burwick doesn’t offer a lot of optimism for sustained growth in the space: “This wave could come crashing down a lot faster than hard seltzer in my opinion. I think it’s been propped up by wishful thinking.”
- Hard MTN Dew, in 11 states now, will be in four more in the next couple of months and possibly as many as 30 by the end of the year.
In other news …
Jack’s Abby in Framingham, Massachusetts, has put its ale-making sister brand Springdale Beer Co. on ice.
The Consumer Price Index for beer continues to outpace overall inflation. Beer at-home was +9% in January.
January off-premise sales data is in from market research firm IRI. Year-to-date through January 29, dollar sales were up +7%, to nearly $2.9 billion, while volume (measured in case sales) was slightly down( -0.3%). Although January was more damp than dry, non-alcoholic beer sales increased +34.2% and volume +20.1%. Plus, Athletic Brewing Company is now a top 25 beer category vendor in the off-premise.
Did you catch Athletic’s valuation? Forbes put a just under $500 million valuation on the non-alcoholic beer maker.
The BA shared its annual report for 2022. Notably, the trade group’s events revenue nearly doubled, to $14.2 million, while revenue from membership dues declined again, to $4.35 million, hitting its lowest point since 2016. All the numbers in the link.
It’s last call on Super Bowl items. Jess, Zoe and I chat with a pair of ad professionals about the big game booze ad battle on this week’s Brewbound Podcast. Plus, Zoe explains BORGs. Follow this link to listen for free.
BeerBoard reported that draft beer volume increased +4% on Super Bowl Sunday. If you missed the Coors Light/Miller Lite/Blue Moon ad swerve, Zoe has you covered. Oh, and here’s JuneShine’s regional ad that played in San Diego.
Housekeeping note: We’re headed to Sacramento next month for the California Craft Brewers Association’s Summit. See you there?
And that’s another week in the books. Thanks to all of you for reading Brewbound and being Insider subscribers. If you’re not an Insider, follow this link to sign up. See ya next week.