The Boston Beer Company, Inc. (NYSE:SAM) Q4 2022 Earnings Call Transcript

Frank Smalla: Not everything is factored in. Like we are discussing, but there are no benefits baked in that we haven’t achieved.

Bonnie Herzog: Okay. And then maybe just like a final second question for me, if I could switch gears. I might have missed your comments, but it sat on Hard Mountain do and how the brand is performing. And maybe just remind us of your distribution plans for the brand this year. in terms of number of states you expect to add? And I don’t know if you still have plans to have the brand be available nationwide.

David Burwick: Right now, it’s finished the year in 11 states. We expect it to be maybe 25 to 30 this year. And that’s being driven by Blue Cloud is based on the approvals they get and how quickly they can get it to those states, but that’s sort of the plan. In terms of how it’s performing in those 11 states, it’s essentially in 12-pack. There’s two on single serve. You look at 12 pack. The sales per point is in those states for the 12-packs is #1 in F&B. I had a twisted to head of Mic’s Head of everything. So it’s turning. The repeat rates are about as high as anything we’ve seen in beyond beer launches in the last couple of years. So we feel like the consumer is there, the product isn’t everywhere. We know that. So it’s generally large-format stores, right?

And it’s not up and down the street. The distribution is still being built out. So on a kind of a below average distribution footprint that the brand is performing well. And honestly, we’re just — it’s going to go where it goes this year. We’re not — there could be upside there, but we’re not planning for any of it. We’re going to — it has to get distribution through Blue Cloud and as it does, we do our thing and we do the marketing and we get good response on that. So it’s — as you know, there’s been a lot of resistance to that. And as it works through, we’ll see where it ends up at the end of the year. But again, there will be — we’re going to go from 11 to 15 states in the next couple of months. So we know we used to be in 15 and pretty soon and hope to be 25 to 30 before the end of the year.

Operator: And the next question comes from the line of Brett Cooper with Consumer Edge.

Brett Cooper: Just a question. You pushed Truly in the bottle spirits into vodka and you talked about going to tequila. Just if you step back and think about the long term, is that a model that you think is applicable for other parts of Beyond Beer or the fourth category to grow household penetration and consumer acceptance?

David Burwick: Brett, so you mean taking other brands into a spirits place like maybe non-Hard Seltzer brands into spirits.

Brett Cooper: Yes.