• ☀️ Boston Beer Q2 Earnings Call
• 🎶 Wandering Soul’s Matt Smith
• 🏔️ Breckenridge to Claim SweetWater Taproom
• 📉 Boston Beer Q2 Financials
• 🚛 Deschutes Now Available in LA and MS

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After a “soft” quarter, Boston Beer executives laid out the company’s plans for growth in the second half of 2024 and beyond during a conference call on Thursday with investors and analysts.

Founder and chairman Jim Koch said: “In summary, we saw soft volume trends early in the second quarter, which we have reflected in our revised volume guidance. But we're confident in our plans to grow our brands over time and have our brands reach their full potential.”

Boston Beer – whose portfolio includes Twisted Tea, Truly Hard Seltzer, Samuel Adams, Angry Orchard, Dogfish Head and Hard MTN Dew – recorded shipments (sales to wholesalers) declines of -6.4% and depletions (sales to retailers) declines of -4.% in Q2. 

Twisted Tea, the company’s best selling brand, and Sun Cruiser, its new vodka-based hard tea offering, were the only brands to grow in the quarter, but their gains could only “partially offset” losses from Truly, chief financial officer Diego Reynoso said. 

For the second half of 2024, the company’s investments “will be particularly focused on supporting those brands that are driving growth, which include category leading Twisted Tea, Sun Cruiser and Hard MTN Dew,” CEO Michael Spillane said.

Boston Beer is expecting to take price increases between +1% and +2% and projects full-year gross margins to land between 43% and 45%, Reynoso said. The decline in margin is in part driven by increased costs in flavorings and sweetener, labor at breweries and contractual shortfall fees at contract producers.

The company plans to “reassess” its commitments with third-party producers as contracts expire, Reynoso added. 

Here are some highlights from the call:

On the launch of Surfside challenger Sun Cruiser … Boston Beer launched Sun Cruiser earlier this year as a fast follower to Surfside, the vodka-based hard tea and lemonade brand from Philadelphia-based Stateside Vodka. Sun Cruiser has “come out of the gates pretty strong,” Koch said. 

Koch continued: “We're seeing very good results where we have fully launched it. In New England, we're outselling Surfside two-to-one. In some of the other markets like Ohio, we're seeing similar numbers. We just got put into MetLife Stadium and replaced Surfside, so we're getting great support from retail and wholesalers for Sun Cruiser.”

The brand has “fully launched” in about six states, with more to come, Koch said.

On a disappointing April … Several factors combined to make April 2024 a challenging month for comps, as the Easter holiday was on April 9 in 2023 and on March 31 in 2024. In addition, April 2023 marked the beginning of the conservative-led Bud Light boycott, which Koch called a “black swan event” during the Goldman Sachs Global Staples Forum in May. 

Koch said: “Our current assessment is that demand appears to be improving from April lows and April trends likely reflect the comparison against significant dislocations in the beer industry that began in April of last year. Our shipments for the second quarter reflect the impact of shipping ahead of depletions in the first quarter and not fully shipping into improving demand in the latter weeks of June.”

Since April, however, both the beer category and Twisted Tea have begun to “recover,” Reynoso said.

“We are expecting the back of the year to look more like Q1, less like Q2,” he said.

In the latest edition of  A Round With – Brewbound’s Insider-exclusive Q&A series with industry leaders – we caught up with Matt Smith, founder of Beverly, Massachusetts-based Wandering Soul Beer Co. 

Wandering Soul is a contract-brewed brand concentrated on the North Shore of Massachusetts that homebrewer Matt founded in 2018 as a way to honor the memory of his daughter. Many of the beers in Wandering Soul’s portfolio are infused with Matt’s story. Here, he discusses the challenges of pouring so much of oneself into a business and how to find harmony in contract brewing relationships.

Here’s a snippet of the Q&A: 

Wandering Soul’s story is so personal – your flagship Melody Maker is named for your stillborn daughter, and many beers in your portfolio take their inspiration from the journey your grief took you on. How does it feel to share so much of yourself through your business?

Matt: I appreciate that you used the word "journey" in terms of this. Wandering Soul has always been a very personal endeavor to me, and each beer has to mean something. Melody Maker was the beer that started Wandering Soul, and it was a crucial part of the healing process for me after she died. I'm going to be honest -- sharing such personal details of my life in the context of the craft beer world has not been easy. 

At times, I've viewed myself as some sort of outsider, even though I've been in this industry for a long time. Grief can be an intensely isolating experience. It has been an amazing thing though, to be able to share this experience with others and have them resonate with it. 

When I started Wandering Soul, someone close to me said something to the extent of "be careful, you're going to make everyone sad." That stuck with me, and it has never been my intention. I want to do something with meaning and I want to keep memories alive. But no, it hasn't been easy. 

You took a break at the end of 2022 and paused production for a few months. What did you learn about yourself and the brand during that time?

Matt: Yes, it became too much for me. I was overwhelmed. I was tired, and pretty beat up physically. I needed to separate myself from Wandering Soul for a while. There was a feeling of relief because I knew I'd have a break, and I could finally really focus on my mental and physical health. I did that for a bit. 

Then, I became restless, especially as I started searching for other jobs. I wasn't finding anything that had any real meaning, and Wandering Soul means so much to me. In the end, there's no way to treat this as a business that's solely focused on making money. 

There are many businesses where that's the only goal. I've done all of this from my personal savings, I have no partners or investors, and I try to rely only on myself. When I shut it down, I learned how to pace myself a bit more and look at the reality of the "one-man show" approach, and treat myself with a little more kindness.

Insiders can read the full Q&A here.

Tilray is making a taproom swap with two of its craft breweries.

Littleton, Colorado-based Breckenridge Brewery will take over the Fort Collins taproom of sibling brand SweetWater Brewing next month, the Denver Post reported. 

Atlanta, Georgia-based SweetWater Brewing has occupied the space for nearly three years, which was the former home of Canadian brewery Red Truck. The decision to swap breweries was made to prioritize expanding Breckenrdige’s presence in its home state, according to the report. 

Breckenridge also operates a taproom and restaurant atop a 12-acre brewing campus in Littleton, as well as a brewpub in Breckenridge. 

Boston Beer Company failed to keep up with softer comps and continued to post declines in Q2 2024, with negative trends accelerating versus Q2 2023, according to the company’s latest earnings release, covering the three months ending June 29. 

The company recorded Q2 2024 shipments (sales to wholesalers) declines of -6.4% year-over-year (YoY), primarily due to continued declines from Truly Hard Seltzer, which were “only partially offset” by gains from Boston Beer’s two hard tea brands: Twisted Tea and Sun Cruiser. 

Depletions (sales to retailers) declined -4% YoY, compounding on the -3% declines recorded in Q2 2023. Last year’s Q2 also recorded a -4.5% YoY decline in shipments. 

The latest quarterly declines follow shipment growth of +0.9% and flat depletions in Q1. 

Boston Beer founder and chairman Jim Koch said in the release: “Depletions were soft in April, but improved as we moved through the quarter. While the industry environment remains dynamic, we are seeing early signs of progress on innovation and will use our strong balance sheet to invest in our brands while returning cash to shareholders.”

Due to “softer category performance in the second quarter and timing of product launches” Boston Beer is revising its full year guidance, now projecting depletions and shipments to decline low-single-digit or be flat, Boston Beer president and CEO Michael Spillane said in the release. Previous guidance had depletions and shipments ranging from down-low single-digit to growing by a low-single-digit. 

Insiders can read more here, including year-to-date trends.

Deschutes Brewery is quickly adding to its distribution footprint.

The Bend, Oregon-based craft brewery is now distributing its beers in Louisiana via a partnership with Crescent Crown Distributing and in Mississippi via Mitchell Distributing. 

Louisiana and Mississippi fans can now purchase Fresh Squeezed IPA, Black Butte Porter, Symphonic Chronic Double Dank IPA, and all of Deschutes’ non-alcoholic offerings.

These are the second and third distribution expansion Deschutes has announced this month. Last week, Deschutes announced a deal with Cavalier to sell its beers in Florida. 

Deschutes CEO Peter Skrbek discussed the brewery’s national push with Brewbound earlier this year. Insiders can read more in the link above.

Almost Friday Media, the comedy meme account turned digital media empire that has long celebrated the vaunted opening of a beer at the closing of the workweek, had a drinker base long before it had a beer brand. 

The media network reaches more than 800 million accounts across more than 30 channels on seven different media platforms, and launched its eponymous light lager Friday Beers late last year.

Almost Friday co-founder and CEO Jack Barrett and Corestone Capital founder and CEO Will McDonough joined the Brewbound Podcast to discuss the beer, its fans and the strategy behind it.

Plus, the Brewbound team discusses global hop production and inventory, regulatory changes for THC-infused drinks in Iowa and a makeover for Cigar City’s Jai Alai IPA.

Listen here or on your preferred podcast platform.

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.

In addition to the mainstage programming and networking parties, Brewbound Live will feature opportunities for one-to-one conversations between brewers and bev-alc brands and retail buyers from chains such as Whole Foods Market. Registered attendees will be considered for meetings with buyers, as space is limited. Find out more details here.

Register for Brewbound Live 2024.

It’s time to book your room for Brewbound Live! Our two-day event for beer and beverage-alcohol professionals heads to Marina del Rey, California, on December 11 + 12. Register now to stay just steps from the action and save on your stay at the Marina del Rey Marriott Hotel (4100 Admiralty Way, Marina Del Rey, CA).

The Brewbound Live room block always sells out, so we encourage you to register today to secure your place among brewers, retailers, investors, distributors, beer leaders, and industry partners. Once registered, you will receive an email with the link to the discounted room block. Plus, right now you can take advantage of early registration pricing and save $100 per registration. Plan ahead to save and take advantage of both the room block and early registration discounts.

Attendees can look forward to expert presentations from brewery leaders, retailers, beverage-alcohol suppliers, wholesalers, and data providers, business conversations during scheduled networking breaks, the Brewbound Live Pitch Slam, samples of the latest innovations in the industry and the Brewbound Live Official Party, all set against the backdrop of sunny Southern California.

Register for Brewbound Live Winter 2024.