• Q1 net profits drop 49% to US$7m
  • Net sales in three months to end of March slide 5% to $202m
  • Operating profits plunge 49% to $11.2m
  • Volumes down 5% to 834,000 barrels
Boston Beer has tried to innovate around the Samuel Adams brand with the Nitro range

Boston Beer has tried to innovate around the Samuel Adams brand with the Nitro range

The Boston Beer Co has launched a review of Samuel Adams after sharp declines in its core brand led to a disappointing first quarter.

The company said Samuel Adams drove an overall 5% volumes depletion in the 13 weeks to 26 March. The brand also lost market share as competition from craft beer intensified.

The company's key cider brand, Angry Orchard, also posted volume depletions, as the cider category weakened and new innovations in hard soda - alcoholic soft drinks - stole share-of-throat. Angry Orchard did not lose market share in the 13-week period, Boston said.

"In the first quarter, our depletions volume was significantly below our expectations, as the declines in our existing styles of our Samuel Adams and Angry Orchard brands were not offset by our new styles or the growth of the rest of our brand portfolio," said CEO Martin Roper. "We are working hard to improve the Samuel Adams brand trends through continued innovation, executional focus on our core styles and a full review of our brand messaging and packaging, which we hope to complete during the second half of the year."

Boston Beer has attempted to boost Samuel Adams volumes with the launch this year of the Nitro range, which uses a combination of both nitrogen and carbon dioxide - similar to the method used by Diageo in the can-format of Guinness - to give a creamy texture to the beers

Overall, Boston Beer volumes fell 6% in the first quarter and sales dropped 5% to US$202m. Net profits were down 49% to $7m.

Looking ahead, the company forecast for FY2016 a depletions and shipments percentage change at between -4% and +2%. This is a lowering of expectations from February, when the company said it estimated shipments would grow by a mid-single-digit percentage point.

The drops follow increases in 2015, however volumes, sales and profits dipped in the final quarter of the year, signalling more difficult trading conditions for 2016.

Boston Beer released its Q1 results after US markets closed yesterday, However, in after-hours trading, its share price was down almost 10%. In trading yesterday, the stock was down about 3%, continuing a downward trend that has seen the share price fall about 32% in the past six months.

Also, a report from tracking firm GuestMetrics, released yesterday, showed that Samuel Adams fell 13% in the US on-trade in the first 13 weeks of the year. Overall, Boston Beer brands dropped 13% in the period as Angry Orchard declined 14% in sales.

To read the company's official release, click here.