Boston Beer‘s chief executive officer said Friday that the hard seltzer craze is the biggest shift for beer drinkers in four decades, following an earnings report that sent his company’s shares skyrocketing.
“There’s this fundamental shift right now that hasn’t happened in the beer category since light beer was launched in the late ’70s, which is called hard seltzer,” CEO Dave Burwick said on “Closing Bell.”
Shares of Boston Beer, which owns the Truly brand of hard seltzer, spiked more than 25% on Friday, a day after the company reported second-quarter earnings. The beverage maker beat Wall Street estimates for earnings and revenue, according to FactSet, and grew its per-share earnings by more than 100% compared with the same quarter last year.
Being stuck at home during the coronavirus pandemic has increased overall demand for beer and seltzer, Burwick said, and the company’s comparable shipments increased by more than 35% during the quarter. Even with that overall growth, the pandemic is amplifying prior trends, he said, including the shift to more hard seltzer
“Millenials, say 21- to 35-year-olds today, are not drinking as much as the people who came before them, but they’re drinking better. When you look at those trends of health and wellness, variety seeking and premiumization, it all supports the growth of this hard seltzer category,” Burwick said.
Elsewhere in the business, Burwick said that the pandemic had shifted demand to recognizable brands. The Samuel Adams Boston Lager and Angry Orchard Crisp Apple brands grew by double digits in recent months, he said.
Boston Beer’s stock has now jumped by 119% so far this year. Burwick said the company focused on keeping its supply chain and production lines running early in the pandemic to avoid major work disruptions and has found ways to grow.
“We’re in a category where there’s not a lot of growth … and I think we’re being rewarded for growth and rewarded for keeping the business operating as best we can,” Burwick said.