The Boston Beer chief executive said Friday that the madness of the hard seltzer is the biggest change for beer drinkers in four decades, after a profit report that skyrocketed his company’s stock.
“There is a fundamental change right now that has not happened in the beer category since light beer was launched in the late 1970s, which is called a hard seltzer,” CEO Dave Burwick said in “Closing Bell.”
Shares of Boston Beer, which owns the Truly brand of hard seltzer, rose more than 25% on Friday, a day after the company reported second-quarter earnings. The beverage maker beat Wall Street earnings and revenue estimates, according to FactSet, and increased its earnings per share by more than 100% compared to the same quarter last year.
Being trapped at home during the coronavirus pandemic has increased overall demand for beer and seltzer, Burwick said, and the company’s comparable shipments increased by more than 35% during the quarter. Even with that overall growth, the pandemic is amplifying past trends, he said, including shifting to a tougher seltzer.
“Millennials, say 21 to 35 years old today, don’t drink as much as the people who came before them, but they drink better. When you look at those health and wellness trends, variety search and premiumization, it all supports the growth of this hard seltzer category, “Burwick said.
Elsewhere in the business, Burwick said the pandemic had shifted demand to recognizable brands. Brands Samuel Adams Boston Lager and Angry Orchard Crisp Apple have grown double digits in recent months, he said.
Boston Beer’s shares have now increased 119% so far this year. Burwick said the company focused on keeping its supply chain and production lines running early in the pandemic to avoid major work interruptions and has found ways to grow.
“We are in a category where there is not much growth … and I think we are being rewarded for growth and rewarded for keeping the business operating to the best of our ability,” Burwick said.
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