An hourglass shaped can?

The company’s initial expansion into cans will begin with Boston Lager and its seasonal Summer Ale beer. Summer Ale is typically available from March through July. Boston Beer has announced Summer 2013 as a tentative release date. Beer will be available in 12 packs for a suggested retail price of $14.99 to $17.99.

The canning program has been rumored since last year. Boston Beer has spent lots of time making sure it got the can right to lock in the flavor. Company founder Jim Koch was adamant about not distorting the taste with the aluminum can. “I’ve been the holdout, I’ve been the purist,” Koch said. The company finally got the can right with a new hourglass curve and wider lid that allows beer to flow out nicely.

By canning beer, Boston Beer opens up several new revenue sources. Canned beer will now allow Sam Adams fans and new drinkers to enjoy the beers in sports arenas, on airlines, on beaches, and other places where bottles have no home. Sam Adams will now compete more directly with larger beer brands from AB Inbev (BUD), Molson Coors (TAP) and SAB Miller.

Boston Beer has already announced that they will expand the canning program to other beer brands if this is a success. In 2012, the company bottled over 50 different kinds of beer, including new brands like Double Agent, White Lantern, and Hopology IPA. The company has different seasonal beers that would sell well in cans, especially during the summer.

Prior to the canning announcement, revenue was expected to grow at a double digit pace. The addition of canned beer will create millions of dollars in additional revenue. Shares are now not pricing in the potential of cans. If shares carried a high price multiple before, what will they trade at going forward?

This entry was posted in Vicki's View. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *