Business Strategy and Outlook
| Jaime M. Katz, CFA |Though much smaller than the brewing behemoths, Boston Beer is well positioned in malt categories, boasting a meaningful growth profile that mainstream beer lacks. In our view, the firm has shown a remarkable proclivity to not only augment its portfolio in alignment with the latest growth vectors but to also capture a disproportionate share of the economic rents generated from this growth by being one of the first movers. We’ve seen this exemplified in the company’s participation in the initial rises of craft beer, cider, and more recently, hard seltzer. While seltzer trends have recently slowed, we surmise sales at Boston Beer will continue to be supported by secular consumption shifts (such as the desire for a low-sugar footprint and varied flavor profiles, and as evidenced by the success of Truly Margarita and the recent launch of Truly Vodka Seltzer).