Hard seltzer boom goes flat

The hard seltzer boom is losing fizz. Boston Beer’s (SAM.N)second-quarter results released Thursday tasted as bad as a Truly Pineapple drink left open overnight. Net income fell by almost 2% compared with the same period last year. That wiped off about a quarter, or $3 billion, off the company’s value.

Boston Beer’s bubbliest market has several leaks. Fewer new people are starting to drink hard seltzer, with a 7% increase in household penetration so far this year compared to 73% in the same period in 2020, said Chief Executive David Burwick. As the pandemic wanes, more people are going out, where beer still reigns.

Worse, everyone from beer goliaths like Anheuser-Busch Inbev (ABI.BR) to soft drink giant Coca-Cola (KO.N) to numerous startups are chasing the market. Boston Beer founder Jim Koch said this has led to customer “confusion” with about 1,000 different seltzer products on the market.

The company, at 34 times estimated earnings, or about 50% higher than peers, according to Refinitiv, could fall further if it’s not customer confusion but seltzer boredom. Either way, sales will fall flat. (By Robert Cyran)

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