Boston Beers Truly Spiked & Sparkling has helped boost its top line

Boston Beer's Truly Spiked & Sparkling has helped boost its top line

There is a "fair probability" The Boston Beer Co will be sold within the next year, an analyst has said, with Molson Coors the likeliest suitor.

The Samuel Adams brewery's beer volumes have declined in the past year, and despite a recent rally and the success of its hard seltzer, underlying weakness continues, according to a note this week from Credit Suisse. The struggles could soften founder Jim Koch's stance on selling up, especially if an upcoming Samuel Adams rebrand from new CMO Jonathan Potter fails to win over consumers, Credit Suisse analyst Laurent Grandet said.

"We now think there is a fair probability of SAM being acquired in the next 12 months, increasing significantly by this time next year if Samuel Adams is still suffering," Grandet said.

The note said Molson Coors would be the "most agreeable candidate" for Koch, with Molson Coors also set to benefit from a potential increase in its sales-per-hectolitre, a category in which it lags US rival Anheuser-Busch InBev. The purchase would also make Molson Coors the leading player in US flavoured malt beverages, as well as cider through Boston Beer's Angry Orchard brand. 

The note drove a spike in Boston Beer's share price, which had dropped from US$178 in mid-November to $130 in July. On Tuesday, the day the note was released, Boston's stock jumped as much as 7% to just under $164.

Credit Suisse praised parts of Boston Beer's business, which management is trying to turn around through an overhaul of the Samuel Adam's brand and investment in new products such as Truly Spiked & Sparkling hard seltzer and Twisted Tea hard iced tea.

The seltzer has provided a three percentage point lift to retail sales growth over the past year, Credit Suisse said, while Twisted Tea has also boosted the top line. However, the growth has failed to outpace declines for Samuel Adams and Angry Orchard - over the past 12 months Boston Beer retail sales have declined nearly 5%.

Grandet said Boston Beer has become a "victim of its own success" as it helped spark the craft beer boom that is now hampering sales as competition from smaller brands increases.

A spokesperson for Boston Beer said that it cannot comment on rumour or speculation, adding that the company is proud to be an independent American firm.

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