Along with today’s breaking Montucky investment news, Brewbound Insiders are reading highlights from Boston Beer Company founder Jim Koch’s fireside chat with Goldman Sachs analyst Bonnie Herzog, including what at Boston Beer is bothering Koch and what he thinks of the “tidal wave of clutter” happening in hard tea.

Insiders are also:

• Diving into why Jefferies’ analysts are positive about Boston Beer;
• Learning about a small craft acquisition in Colorado (newsletter exclusive);
• And checking out new variety packs from Loverboy as the hard tea company expands with Walmart (newsletter exclusive).

Insiders also have access to the Brewbound Newsletter Archive, including previous newsletter-exclusive Insider content.

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Gallo is getting into the beer business via a strategic investment in Montucky Cold Snacks. The wine and spirits conglomerate that found success in recent years with spirit-based seltzer brand High Noon Sun Sips announced a partnership with the founders of the light lager brand. 

Financial details of the deal were not disclosed. Beer Marketer’s Insights first reported the news this morning. 

Gallo EVP and general manager Britt West said in the announcement: “Entering beer offers Gallo an exciting new opportunity to reach consumers in different usage occasions, and we  look forward to collaborating and growing Montucky across the beer distributor network.

“We believe core lager is a big category with room for fresh and innovative propositions. We are super excited that Chad and Jeremy have agreed to stay on and help Montucky reach its full potential.” 

Read the full story on the Montucky investment, including recent scan and production data for the lager brand, as well as details on a previously undisclosed acquisition of Waterbird Spirits. The story is free for all readers.

Boston Beer Company founder and board chairman Jim Koch was brutally honest about some of the company’s past failings in a fireside chat with Goldman Sachs analyst Bonnie Herzog today during the investment firm’s Global Staples Forum.

Koch said: “We missed a lot of guidance in the last four years and that’s embarrassing and I don’t want to keep doing that. I want to make sure we meet guidance and establish credibility.” 

Koch said he aims to have a gross margin above 50% in the next five years, but that growth is “slower than you’d think.” Additionally, Boston Beer is still taking on costs from its efforts to rapidly expand Truly Hard Seltzer. 

Koch said: “It bothers me how much money is leaking out of the business unnecessarily. It's just a waste. There’s a lot of it.” 

Insiders can read more highlights from the conversation, including Koch’s thoughts on the opportunity for beer in the fourth category, the “tidal wave of clutter” in hard tea, how new innovation Sun Cruiser is performing and how Hard MTN Dew’s transition to beer wholesalers is going.

Boston Beer Company emerged with a “buy” rating following the results of financial services firm Jefferies’ 11th bi-annual beer distributor survey. Jefferies equity analyst Kaumil Gajrawala cited Twisted Tea’s dominance of the flavored malt beverage (FMB) segment, and the “stabilization” of Truly Hard Seltzer trends leading to less volatility, among the reasons for the improved rating. 

Other quick takeaways from the survey included:

• Anheuser-Busch InBev (A-B) is expected to lose less shelf space than expected;
• Molson Coors is expected to gain less shelf space than anticipated;
• Constellation Brands’ depletions are expected to grow +7% in calendar year 2024;
• Hard seltzer is expected to “stabilize, while [hard] tea/FMB/RTDs keep thriving;”
• Industry volumes are expected to decline -1% this year;
• And promotional activity is expected to be equal to last year.

On the case for Boston Beer … Gajrawala wrote that Boston Beer is expected to return to volume growth for the first time since 2021.

Keep reading to get more insights on shelf space expectations for A-B and Molson Coors and weak early year trends.

The Brewbound Live business conference returns December 11 and 12 in Marina del Rey, California.

Brewbound Live will feature beverage-alcohol industry leaders taking part in business-focused conversations, data presentations, networking and much more across two days at the Marina del Rey Marriott.

Brewbound announced the first speakers for this year’s conference. They include:

• Russian River co-owner Natalie Cilurzo;
• Deschutes Brewery CEO Peter Skrbek;
• National Beer Wholesalers Association chief economist and VP of analytics Lester Jones;
• Draftline Technologies founder and president Jennifer Hauke.

Additional speakers will be announced in the coming weeks.

Register for Brewbound Live 2024.