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Shipments may have dropped double digits in Q3 as Boston Beer rebalanced inventories, but bringing more production in-house and co's other productivity initiatives built margins solidly, freeing up additional cash to raise guidance on annual mktg spend. "Appropriately investing in our brands" thru both natl ads and local efforts is one of personal priorities of founder Jim Koch now that he's back in ceo role, he explained to investors on earnings call last wk. That includes new co-funded program with distribs, for which Boston is committing $60 mil and $3 for every $1 spent by its wholesale partners on local mktg (see Oct 15 issue). Boston already started ramping up its mktg spend, too. By end of Q3, Boston already spent almost $50 mil more in ad, selling and promo expenses, high end of its prior guidance for a $30-50 mil increase. New guidance of $50-60 mil could increase spend by as much as another $10 mil in Q4. Despite some pushback on call, Jim and cfo Diego Reynoso stuck to their guns, co's "bias towards growth" and plan to spend "significantly more," even tho it'll contribute to negative earnings in Q4.Sun Cruiser PODs Tripled Since Early 2025, Getting "Full Representation" in Chains; 19.2s Coming Co's vodka tea and lemonade brand Sun Cruiser already built into one of fastest-growing RTDs, but still over-indexes toward on premise and indie retailers and looks smaller than it is in off-premise scan data, Jim explained. Co tripled brand's pts of distribution (PODs) since start of the yr and believes it still "has significant runway" next yr, seeing "strong" double or even triple-digit growth on the table. It was top vodka tea/lemonade brand at Walmart "where we did have good distribution." And in 2026, Sun Cruiser will get "full representation," Jim said, "across all of the major chains."Boston aims to dig deeper in some "big vodka tea markets" where Sun Cruiser doesn't have as much share, mostly "in the Atlantic area," Jim commented. (Recall Surfside got going in NJ and PA.) Yet co also plans "to keep a disciplined number of tea and lemonade styles" and is instead focusing innovation on pack types. Currently, 19.2 oz cans are already in mkt in New England and will be "expanded nationally in early 2026."Twisted & Truly the Key "Issues"; Adding 16oz 4 Pks as Entry-Level Price Point for Twisted Broadly, Boston aims "to at least maintain share for each of our brand families within their segment," Jim explained. This yr, after getting Dogfish Head back to growth, it's doing that in craft, while Angry Orchard growth means the brand fam is gaining share in cider. So "our issues are Twisted Tea and Truly," he acknowledged. And what happened with Twisted "surprised us," dropping from 5% gains in early part of this yr to down double digits in recent periods. Velocity and display are down at retail and 12-pk pricing got too high in certain mkts, Jim reiterated. So Boston will launch 4 pks of 16oz cans "that will come in under $10," aiming to hit "a more attractive entry point," Jim said. It's also "figuring out how to surgically implement some more promotional spending on Twisted Tea," he added."Challenging Macroeconomic Environment" Top Industry Pressure Biggest pressure on US beer and alc bev bizzes as well as Boston Beer is the "challenging macroeconomic environment," Jim commented. There's an "economic uncertainty that has consumers more tightly managing their budget." The economy might look "ok, but for the 80% of the population in the bottom four quintiles, it's not good," he said of household income data. And those tend to be "heavily beer drinking" folks, he noted.The 2nd big pressure comes from "health concerns" about alcohol, Jim thinks, maybe contributing to half of the 5.5% decline in traditional beer volume so far this yr, Jim guesstimated. Impact of hemp is "smaller," maybe knocking a pt off of beer since it's in a "smaller number of states" with more limited availability. And then there's "pressure on Hispanic consumers," which also contributes to the decline. Those folks represent around 20% of Twisted Tea consumers, he said," which is "broadly reflective of the total market."

Boston Bumps Up Mktg $$ to Get STRs Back in Black; Sun Cruiser 19.2s; Twisted 4 Pks; Industry View

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