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US: Boston Beer Co plots expansion on strong 2010

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  • Strong rises in sales, profits in 2010
  • Brewer to expand sales team
  • Will implement new distribution strategy

Boston Beer Co has said it plans to expand its sales force in 2011, after achieving strong growth in full-year sales and profits in a tough US beer market.

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The Samuel Adams brewer is looking to grow its sales team and increase investment behind its brands in order to build on strong consumer demand for craft beer in the US.

In the 12 months to the end of December, Boston Beer reported net sales up by 12% to US$463.8m. Volumes rose by 12% versus 2010, which contrasts markedly with low single-digit volume declines at market leaders Anheuser-Busch InBev and MillerCoors.

"While we continue to see expanded distribution of domestic speciality brands and local craft brands, which is increasing competition in the category, we are happy with the health of our brand portfolio," said Boston Beer's founder and chairman, Jim Koch.

The Boston-based brewer's net profits leapt by 38% to $50.1m, while operating profits jumped by almost 50% to $81.2m, the group said yesterday (8 March). Higher sales and lower costs drove profits.

In 2011, the group said that it is prepared to sacrifice profits growth in order to implement its 'Freshest Beer' programme, which is designed to reduce the time-lag between beer leaving the brewery and reaching consumers.

"Historically, our wholesalers have carried three to five weeks of packaged inventory and three to four weeks of draft inventory," said Boston Beer's CEO and president, Martin Roper. "In testing our 'Freshest Beer' programme in 2010, we successfully reduced the inventories of participating wholesalers by approximately two weeks," he said.

The group expects the programme to cover half of its volumes this year. "We believe that, in the long-term, this programme will deliver better, fresher beer to our drinkers and should reduce costs and improve efficiency throughout the supply chain," said Koch.

In 2011, the scheme is likely to wipe between $0.2 and $0.3 off Boston Beer's diluted earnings per share. The company forecast full-year, diluted earnings per share of between $3.45 and $3.95, versus $3.52 for 2010.

For the company's results statement, click here.


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