Hard Tea and Spiked Seltzer Strength Make Boston Beer a Top Pick: Cowen
Photo Credit: @Truly instagram
Spiked seltzer and hard tea are the darlings of the alcohol business, and having strong brands in each category makes Boston Beer Company a stock to own, according to Cowen. The research firm rates Boston Beer company as its best Small-Mid Cap idea and its #2 Top Pick overall, citing growth in the Truly and Twisted Tea brands.
“SAM is well positioned to benefit from current market dynamics within U.S. alcohol. Through its Truly brand, the company has established itself as the clear number 2 player within hard seltzer, the fastest growing category in total beverage alcohol, while also commanding a market leading position in hard tea, another high growth category within FMBs.”
Tea Time: Boston Beer’s Twisted Tea brand is experiencing a revival, with monthly Nielsen data revealing about 40% growth. Cowen points out that this is the highest sales growth in at least four years.
Beer gone bad: The explosion of hard tea and hard seltzer comes at a time when beer sales have struggled. Cowen’s revenue estimates assume at least 50% declines in beer and 30% declines in cider, while hard seltzer and hard tea are expected to grow 150% and 30%, respectively.
