Health-conscious American millennials have found their favorite beverage: carbonated alcoholic water that has fewer calories and carbohydrates than beer and wine. A tough seltzer fashion is sweeping the United States as Generation Y and Generation Z pursue healthier lifestyles, influenced by viral trends on Instagram and YouTube.
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Boston Beer, the father of alcoholic beverage brands such as Samuel Adams and Angry Orchard, got its earnings guide Wednesday amid a sharp slowdown in sales of Truly, its hard seltzer brand.
In late July, the company noted the “slowdown in growth trends” in hard seltzer sales to justify its weaker-than-expected quarterly revenue and earnings for the second quarter, which dropped its 26% shares at that time. These results also led the company to cut its year-round forecast, reducing its projected adjusted earnings from $ 18 to $ 22 per share for 2021, compared to its previous forecasts of $ 22 to $ 26 per share.
Shares of the alcoholic beverage company fell 9.5% in out-of-hours trading.
“The company now expects to incur inventory cancellations related to hard seltzer, deficit commissions payable to third-party breweries and other costs that will be spent for the remainder of fiscal year 2021,” the company in a press release Wednesday.
The market for hard seltzer products has been one of the most sought after beverage brands inherited during the pandemic. In August, Constellation Brands and Anheuser-Busch InBev launched hard seltzer products under the Bud Light and Corona brands.
In a related move the same month, Boston Beer partnered with Pepsi to create a tough Mountain Dew product.
–CNBC’s Amelia Lucas contributed to this report.