Boston-based The Boston Beer Co. Inc. reported its first quarter 2014 net revenue totaled $183.8 million, an increase of $47.9 million or 35 percent compared with the prior-year period. The company attributes this growth to a 32 percent increase in core shipments. Net income for the first quarter was $8.3 million, an increase of $1.4 million from the first quarter of 2013, also primarily due to shipment increases that were partially offset by increased investments in advertising, promotional and selling expenses, and the impact of a favorable federal income tax settlement.
Depletions grew 34 percent from the comparable 13-week period in the prior year, primarily because of depletion increases across the Angry Orchard, Samuel Adams and Twisted Tea brands, the company reports. Core shipment volume was approximately 835,000 barrels, a 32 percent increase compared with the first quarter of 2013.
The company reports that wholesaler inventory as of March 29, 2014, were at appropriate levels. Inventory at wholesalers participating in the Freshest Beer Program as of March 29, 2014, was unchanged in terms of days of inventory on hand when compared with March 30, 2013. The company has more than 65 percent of its volume in the Freshest Beer Program and forecasts that participation in the program could reach between 70 and 75 percent of its volume by the end of 2014.
While the company achieved price increases of approximately 2 percent during the quarter, it also increased its advertising, promotional and selling expenses by 41 percent to $17.8 million, primarily because of planned increased investments behind its brands including media advertising, point-of-sale and local marketing, and increased costs for additional sales personnel and commissions, the company says.
"I am pleased that The Boston Beer Co. achieved record depletions in the quarter and that Samuel Adams Boston Lager, our flagship beer, has continued to grow as we celebrate our 30th anniversary,” said Founder and Chairman Jim Koch in a statement. “In the first quarter, we introduced our new spring seasonal, Samuel Adams Cold Snap, and I was excited that Cold Snap was well received by drinkers, retailers and wholesalers. Late in the first quarter, we had a smooth transition from Cold Snap to our Summer Seasonal, Samuel Adams Summer Ale, now in its 19th year and still one of my favorites. During the quarter, we initiated our national rollout of Samuel Adams Rebel IPA, a West-Coast-style IPA brewed with hops from the Pacific Northwest. It continues to receive great support from distributors and on- and off-premise retailers. I am particularly pleased with the early success of Rebel IPA that we believe, three months into our national launch, is already among the Top-3-selling IPAs, according to off-premise scan data, and we are still building distribution. We are happy with the health of our brand portfolio and remain positive about the future of craft beer."
