Last fiscal year was another tough one for the brand that helped spark the current craft beer boom.
In an earnings report released this week, Boston Beer reported a decline of depletions (or product shipments) of 7% for the 2017 fiscal year compared with 2016. This follows the 5% depletions decrease of 2016 compared with 2015.
Boston Beer’s net revenue for fiscal year 2017 was $863 million, a decrease of $43.5 million, or 4.8%, from the fiscal year before. In 2016, the company’s operating profit shrunk 12%.
Net income for the 2017 fourth quarter was $30.5 million, an increase of $8.4 million over the fourth quarter of 2016. However, this increase was primarily due to a favorable one-time impact of the Tax Cuts and Jobs Act of 2017, enacted in December 2017, as well as an increase in gross margins, partially offset by the impact of lower shipments and higher brand investments.
Net revenue for the 2017 fourth quarter was $206.3 million, a decrease of $13.1 million or 5.9% from the 2016 fourth quarter, mainly due to a decrease in shipments of 7.7%.
“We are still seeing challenges across the industry, including a general softening of the craft beer and hard cider categories, more and more start-up brewers opening their doors, and retail shelves that offer an increasing number of options to drinkers,” said Jim Koch, Boston Beer chairman and founder, in a release. “Our leadership team continues to make strides to address these challenges by improving our cost structure and investing the savings into our brands, which we believe is contributing to the improvements in gross margin and depletions trends.”
“We are excited by the new media campaigns launched in late 2017 for both our Samuel Adams and Angry Orchard brands, and by the early enthusiastic reception to our key innovations launching nationally in the first quarter of 2018,” he added. “These include the launch of Sam ’76 . . . Our other key innovations include Samuel Adams New England IPA and Angry Orchard Rosé, both of which are generating excitement during the very early stages of their introductions.”