Analysis - Is Boston Beer Co a hard cider maker in disguise?
Boston Beer has the right craft beer credentials
In 2010, the Brewers Association raised the cap on volumes for any brewer who wants to be defined as “craft” from 2m barrels a year to 6m.
It was a move partly to keep the hugely successful Boston Beer Co within the confines of the category. However, four years on, and you could argue Boston Beer is at risk of losing its craft beer badge again - not because it's about to exceed the volumes cap, rather because, these days, its almost more a cider maker than a brewer.
In nine-month results, released last week, Boston Beer posted a strong jump in profits and sales partly due to the performance of its hard cider brand, Angry Orchard. According to CLSA analyst Caroline Levy, the brand now accounts for 27% of Boston's group sales in channels measured by IRISymphony.
That's an incredible amount of growth for a product that was only launched in the US nation-wide in 2012, but which now commands 55% of the country's hard cider market.
The brand even managed to stand firm against a number of hard cider launches from mainstream brewers Anheuser-Busch InBev and MillerCoors. According to Levy, Angry's future is looking assured.
“Cider is still currently just 1% of the US beer market, but it continues to grow,” the analyst says, pointing to Boston Beer CEO Martin Roper's comments after the YTD results that the hard cider category could increase as much as three-fold in the next ten years.
With growth like that, Boston Beer may want to consider a name change to Boston Cider.
Earlier today, Anheuser-Busch InBev reported a drop in Q3 and year-to-date net profits and sales, although the company saw sales rise in organic terms. Here just-drinks takes a closer look at the comp...
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