Boston Beer CEO said Friday that the hard Seltzer craze is the biggest change for beer drinkers in four decades after a profit report rocketed his company's stock.
"There has been this fundamental change that has not happened in the beer category since the introduction of light beer in the late 1970s, known as Hard Seltzer," said CEO Dave Burwick to Closing Bell.
Boston Beer, which owns the Truly brand from Hard Seltzer, rose more than 25% on Friday, the day after the company reported a second-quarter profit. According to FactSet, the beverage manufacturer exceeded Wall Street's earnings and revenue estimates and increased its earnings per share by more than 100% year over year.
Stuck at home during the coronavirus pandemic has increased overall demand for beer and seltzer, Burwick said, and the company's comparable deliveries grew more than 35% in the quarter. Despite this general growth, the pandemic is reinforcing previous trends, including switching to harder seltzer
"Millennials, 21- to 35-year-olds say today, don't drink as much as the people who came before them, but they drink better. If you look at the trends in health and wellness, variety search and premiumization, all of this supports growth this category of hard selters, "said Burwick.
Elsewhere in the store, Burwick said the pandemic has shifted demand to recognizable brands. The Samuel Adams Boston Lager and Angry Orchard Crisp Apple brands have seen double-digit growth in recent months, he said.
Boston Beer stock has risen 119% so far this year. Burwick said the company focused on keeping its supply chain and production lines running at the beginning of the pandemic to avoid major disruption and finding ways to grow.
"We are in a category where there is not much growth … and I think we will be rewarded for growth and for doing business as best we can," said Burwick.