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

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David Burwick: Yes. I mean, I think it’s TBD. I mean, for us goes in there now, I’m not sure how that’s doing. I think people will try because clearly, there’s interest in this space. You could put — you can fix vodka and pretty much anything. So there very well could be. I think at the end, I mean, this moment, what seems to have the most promise. It’s really vodka-based, not even tequila. I mean, Vodka’s like 80% or 90% of that space. So any kind of very clean, simple, vodka-based beverage that delivers taste and variety of flavor could be successful. So I would — given the way things are converging now, nothing would surprise me. The question is ultimately what’s going to be successful? I think — and to go back on the Truly, I think for Truly, we really think Truly can, as a brand — and we’re building the brand that way with that thought in mind, not just trying to bolt it on just to a new idea, but we think it can play in the intersection of refreshment, sessionability and variety.

And that works for space versus vodka versus tequila. So we feel — we feel that’s a good fit. Other — there might be other good fits, too, but left, I guess, we’ll be seeing, I’m sure we’ll be seeing everything this year. We’ll get a sense of what might work.

Operator: And the next question comes from the line of Peter Grom with UBS.

Peter Grom: So I guess I just wanted to ask about what’s included in the outlook from a Truly share perspective. And I know you’re trying to invent some degree of conservatism, which is certainly fair. But I guess I’m just kind of confused as to why the high end of the guidance would really only embed kind of performance in line with category growth, just given the relaunch, the marketing push. I would imagine it’s not a reflection of your confidence. But just maybe I would love to get some views on the reasoning. And I guess building on that, like if the relaunch goes as you plan internally, what would that really look like from a growth perspective for Truly. And then maybe on the flip side of it, I mean, if it doesn’t go as well as you think and share losses kind of continue, how do you think about the future of the brand? Or what can you really do differently down the road?

David Burwick: Okay. Thanks, Peter. I mean I think, again, we learned a lot. We learned — we paid a lot of attention. We internalized and we acted. And I think the changes that we talked about today, we think are the right exact right changes to get the brand back on track. And again, remember, this brand grew share every year until last year when we kind of this whole idea of innovate and innovate and having to lap the innovation finally kind of collapsed on us, if you will. So right now, we’re taking a step back. We’re not innovating now behind Margarita. But Margarita was a 5 share at this point exactly a year ago. It was a 5 share. So it’s a lot of — still a lot of overlap. And we’re — so we don’t expect to be gaining share in the first quarter.

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