Boston Beer Bubbles Up Despite Another Painful Quarter

Shares rose even after the craft brewer fell well short of expectations. Here's why.

Boston Beer (NYSE:SAM) stock climbed more than 4% Friday, after the company released third-quarter 2016 results, but that doesn't mean Boston Beer was toasting its own performance.

Boston Beer's headline numbers

In fact, on the surface there was little to like about Boston Beer's report. Quarterly revenue declined 13.5% year over year to $253.4 million, net income fell 18.4% to $31.5 million, and -- thanks in part to Boston Beer's repurchase of around 807,000 shares of Class A common stock for $138.4 million during the quarter -- net income per diluted share fell a more modest 13% year over year, to $2.48.

By comparison, and though we don't typically pay close attention to Wall Street's quarterly demands, analysts' consensus estimates predicted Boston Beer would achieve higher earnings of $2.60 per share on revenue of $279 million.

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Depletions -- a key measure for how quickly Boston Beer's products travel from warehouses to consumer outlets -- declined 8% year over year, marking a negative acceleration from the metric's 5% slide last quarter. This also means that early improvements in depletions trends that management cited as of last quarter's report didn't hold for the duration of the quarter. To be fair, though, Boston Beer CEO Martin Roper did caution at the time that "it's too early to determine if these improvements are sustainable."

"Our total company depletion trends declined in the third quarter at a slightly faster rate as we lapped new beer launches from last year," explained Boston Beer founder and Chairman Jim Koch, "and we saw a further slowdown in growth across the craft-brewing industry."

Roper elaborated that depletions declines in Q3 were primarily driven by decreases in Boston Beer's flagship Samuel Adams, Angry Orchard, Coney Island, and Traveler brands, which were only partially offset by continued gains from the Twisted Tea, Truly Spiked & Sparkling varieties.

Thirsty to find growth again

So why did the market reward Boston Beer stock with Friday's jump?

For one, keep in mind that Boston Beer is still down more than 30% over the past year as of this writing. That decline might be enticing for any investors still optimistic for the prospects of the craft-beer market over the long term. And Boston Beer isn't sitting on its heels as it continues to get pressed by both larger and smaller rivals encroaching on its niche.

In keeping with a comprehensive review of Boston Beer's brand messaging and packaging completed (ahead of schedule) last quarter, Koch noted that a "major packaging update for Samuel Adams Boston Lager has already shipped, to be followed by new Seasonal and Rebel packaging by the end of the fourth quarter."

In addition, Boston Beer expects to complete the national draft launch of its new Samuel Adams Rebel Juiced tropical IPA by the end of this month and has plans for "reimagining" its seasonal program with several promising new seasonal brews over the first three months of 2017.

On operational efficiency, financial guidance

But perhaps most intriguing were Roper's comments that Boston Beer is now conducting another comprehensive review, this time of its brand strategies and activation plans with the aim of ensuring "our investments are effective and efficient in building long-term brand equities."

This news naturally spurred some rumblings on Wall Street of whether Boston Beer might be considering whether to put itself up for sale. But until an actual acquisition scenario materializes -- and in light of management's decidedly long-term comments (more on that in a moment) -- I think investors would be wise to focus first on the actual business.

Read more at: http://www.fool.com/investing/2016/10/23/boston-beer-bubbles-up-despite-another-painful-qua.aspx

7 lessons learned from Heineken to woo consumers

According to data provided by Allied Market Research the global market for Beer reach the figure of 688,400 million dollars in 2020 with an annual growth of 6%. Figures that left more than clear that this drink like. And much.

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"Over the past five years , beer consumption globally has remained more or less at the same level but what if it has increased the number of brands that are drunk , " said Frank Amorese, media director of Heineken in U.S.

This puts us in a scenario in which differentiation is the only key to position ourselves in the best possible way in the top of mind of the consumer. And if anyone knows about this it is precisely Heineken.

The company is committed to specific social causes in their advertising and production of such spots it allows the brand to really know the interests of their target not only on television but with an eye to expanding its reach into mobile.

Heineken has been working for over two years with SocialCode in the application of knowledge from the social advertising to develop a strategy based on the interests of your audience. A combination of first - hand data from third that let you keep track of all consumers who have seen their ads and ended up buying beer.

A strategy that seems that is working quite well and then we offer eight lessons we have learned from the company gathered by dmnews.com .

1. The ROI is ROI

Something as simple as that if we want to get a return on investment we will have to invest. Not enough to observe the CPM and metrics of the media. We must go for a measure and adapted investment but do not expect to receive anything if we are not investing in it.

2. You have to know where we move

As we have seen Heineken has optimized its ads focus on social commitment , tastes and actions but realized that there was a correlation between engagement and sales generated. Therefore they have focused their efforts on optimizing their reach .

We must ensure that not only do good and creative advertising but the call to action is clear and concise.

3. Understand your consumers

Heineken have a kind of Decalogue always check before launching any announcement to whether it meets the requirements expected of your advertising. Storytelling, easy identification of the mark or creativity are some of the fundamental pillars.

4. Do not bet on the same creativity worldwide

The fact that we want our ads to be seen around the world does not mean we should show the same ads on all sites. Adapt global creatives to different local markets according to their cultures is vital.

5. Agility and without fear of error

The social scene is constantly changing so our brand must be willing to do it too. Here agility and speed in social networks are fundamental not only to practice active listening consumers and respond to their needs, but to control the competition .

Never be afraid to try new things because you have to take risks to not be left behind. This is one of the prices of innovation and error (within assumable parameters) has to be seen as a learning process.

Read More at : http://www.marketingdirecto.com/marketing-general/marketing/7-lecciones-aprendidas-heineken-conquistar-consumidores

Germany’s Biggest Beer Rivals Actually Taste the Same, Study Says

Deeply entrenched rivalries are what makes the world go round. New York versus New Jersey. Giga Pets versus Tamagotchi. Boat propellers versus manatees.

And then there are beer rivalries: Cologne versus Düsseldorf is one particularly fraught example. Both cities, located in North Rhine-Westphalia region of Germany, claim to have the superior beer. But a new study, published online this week, is putting a big damper on the long-established competition. Cologne loves its golden pale ale Kölsch, while Düsseldorf lauds its dark copper-colored Altbier. The study, however, says the two beers taste exactly the same.

PC via Flickr user Derekskey

The rivalry between the two cities—which are located less than 40 kilometers apart—extends to more than just beer preferences. The residents of the two cities each allegedly claim to be smarter. And better at celebrating Karneval. In other words, they’re unlikely to feel kindly about this new study.

In fact, if you go to Düsseldorf and order a beer, you may be told “Ex, oder Kölner.” This evidently means “bottoms up, or you must be from Cologne”—an insult of the first order. And if you show up in Cologne and order an Altbier, you’re not going to make many friends.

Enter Professor Helmut Quack (seriously!) of the Düsseldorf University of Applied Sciences. Quack says that he tested 50 men from Düsseldorf and 50 men from Cologne. When asked which beer they preferred, 78 percent of each group picked their hometown beer. But when they were blindfolded, all hell broke loose.

They couldn’t tell the beers apart.

When asked whether they liked the beer, whether it tasted fresh, mild, or herby, their answers were “nearly equal,” the researchers say. Then the main event: the participants were asked to identify the beer. That’s when their long-held allegiances came crashing down: The participants gave the correct answer only 55 percent of the time, which is pretty much the same results as if they had randomly chosen.

Read more at: https://munchies.vice.com/en/articles/germanys-biggest-beer-rivals-actually-taste-the-same-study-says

European Beer Market Quenches the Thirst of Drinkers Worldwide

European beer brands are banking on more sales in 2016. Brands here are eyed by Asian companies who want to have their fair share.

Europe is definitely a fascinating destination Besides multiple cultures, influences and languages, one of the greatest aspects of this old continent is; people here enjoy drinking. European simply love beer! While each country in the region has their national beer some of the most exciting ones include Guinness (Dublin), Heineken (Amsterdam) and Tuborg (Copenhagen). Research analysts at Allied Market Research assessing the industry share and size, consumption volume, growth rate and opportunities indicate that the alcoholic drink dates back to the period when monks preferred brewing their own beer and were permitted to sell it to the public directly. Beer were then stored in cellars and under the courtyards. Shade of the chestnut trees kept the beer cool.

Brands Sell More Beer than Ever

The market shares of few beer companies rose to a record high. Truly, many good factors have finally converged in for the most popular brand, Heineken. Sale of this brand remain high in different regions including Eastern Europe. The brand has been focusing on the underlying trading environment across different countries. They have learnt the hard way when it comes to generating currency in the beer market.

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The Entire World Seems Thirsty for Europe’s Beer     

When it comes to beer, Europe preserves a rich culture and repute. The region has won many customers worldwide. One of the renowned brands, Heineken shot to fame when it sold over 200 brands over 200 brands across 179 nations in Europe. The continent holds significance as an expert backed by a long-standing culture of beer production. Countries such as Czech Republic, United Kingdom, Belgium and Germany are known for producing world’s finest beer.

Japanese Beer Buys Growth in European Countries

Few large brewing companies are believed to have invested in beer brands as well as manufacturing units in Europe. In a recent incident Japan’s famous brewery Asahi is said to have made a generous investment of EUR 2.55 billion in two beer brands Grolsch and Peroni. The deal also includes a manufacturing unit from AB InBev. The world’s favoured brewing brand AB InBev, has put both the brands for sale as an initiative to receive the consent of competitive authorities globally for its collaboration with SAB Miller, considered as world’s second – largest beer brand. The collaboration is likely to result in a new mega-organization that will account for about 30 percent of the world’s beer industry.

Rapid growth in the sector has persuaded research analysts at Allied Market Research to publish a report titled “World Beer Market - Opportunities and Forecasts, 2014 - 2020". The study outlines that the sector is ready to register a CAGR of 6 percent by 2020. This clearly indicates that Europe would definitely have a fair share in the profits.

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