Hard seltzer boom goes flat

2 minute read

Cans of AB InBev's Bud Light hard seltzer are seen next to White Claw at Jewel-Osco supermarket in Chicago, October 21, 2020. REUTERS/Richa Naidu

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NEW YORK, July 23 (Reuters Breakingviews) - 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.

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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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Editing by Gina Chon and Amanda Gomez

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