Citing “continuing uncertainty about hard seltzer demand trends for the remainder” of 2021, Truly Hard Seltzer maker Boston Beer Company today withdrew its 2021 financial guidance, which was originally issued on July 22.
The company also said it anticipates “hard seltzer-related inventory write-offs, shortfall fees payable to third party brewers, and other costs” that will be incurred throughout the remainder of 2021.
In addition, Boston Beer now anticipates that its full year earnings per diluted share will miss previously reported estimates of between $18 and $22.
Boston Beer noted continued decelerating hard seltzer growth trends, citing industry reports estimating that full year 2021 volume for hard seltzer retail sales will come in more than 100 million fewer cases than volume projections from May 2021 and more than 30 million fewer cases than volume estimates communicated in July 2021.
“While demand for the company’s hard seltzer products continues to grow at faster than category rates in measured off-premise channels, we believe there will be continuing uncertainty about hard seltzer demand trends for the remainder of 2021,” the company said.
Boston Beer added that it will continue to review its volume projects and the related impact on “its business and full-year financial result in light of evolving market conditions.”
Expect more on these issues during Boston Beer’s next earnings call on October 21.
The news of Boston Beer’s hard seltzer shortfalls comes on the same day that Constellation Brands CFO Garth Hankinson said the company expects to take a “relatively significant obsolescence charge in Q2” related to its Corona Hard Seltzer brand, according to Beer Marketer’s Insights.
According to a transcript of Hankinson’s interview at the Barclays Consumer Staples Conference, the CFO said that as the hard seltzer segment’s growth moderates, Constellation will “sell less Corona Hard Seltzer this year than we had anticipated.”
“While selling less seltzer has a positive mix benefit for us, the slowdown in the segment has resulted in us having some excess inventory,” he added, noting that the excess inventory was a byproduct of “the production constraints” as the company prebuilt inventory ahead of the summer selling season.
As Brewbound reported in July, Constellation Brands already reported a $12.5 million increased obsolescence charge related to Corona Hard Seltzer’s first variety packs, which were going out of code.
Hard seltzer sales have begun to decelerate — decreasing by nearly half to +25.5% year-to-date, +11.1% over the last 12 weeks and just +5.4% over the last four weeks (all through August 8), according to market research firm IRI.