After A Difficult 2016, Boston Beer Continues To Lose GroundFebruary 23, 2017
Following a 5% depletions drop in 2016, Boston Beer Company’s struggles are continuing this year.Total depletions fell by 15% in the first six weeks of 2017, and the craft brewer is now saying depletions for the full year could be down by as much as 7%. Boston Beer’s best-case projection for the year is 1% depletions growth.
“We are disappointed with our depletion trends in 2016, which have remained weak so far in 2017,” said Boston Beer founder and chairman Jim Koch in a statement. “These trends are affected by the general softening of the craft beer category and cider category and a more challenging retail environment with a lot of new options for our drinkers.”
Most of Boston Beer’s portfolio lost ground in 2016, with the Samuel Adams, Angry Orchard, Coney Island and Traveler brand families all experiencing depletion declines. Twisted Tea and Truly Spiked & Sparkling were both on the rise, but that wasn’t enough to offset the lagging performance of the other brands.
Boston Beer’s share price fell by 11% in after-hours trading yesterday following the release of its 2016 full-year results, which included a 12% drop in operating profit. At around $155, the craft brewer’s share price is now less than half what it was in early 2015—and analysts think it may soon fall further. Many are projecting the stock to fall to somewhere in the $130-$140 range in the near future. Boston Beer is currently in the process of finding a new CEO to replace Martin Roper who recently announced his retirement. —Peter Zwiebach