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Boston Beer (SAM) Enters Deal to Showcase Truly Brand at NHL

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The Boston Beer Company, Inc. (SAM - Free Report) declared a new multiyear U.S. partnership with the National Hockey League (NHL), making its Truly Hard Seltzer the official drink of the League. This five-year agreement marks the first national sports league partnership for Boston Beer and Truly Hard Seltzer, which is likely to begin with the launch of the 2019-20 NHL regular season.

Through this deal, Truly Hard Seltzer will receive exposure to NHL fans during the NHL regular season. During this period, the Truly Hard Seltzer brand will be showcased on a variety of NHL Media platforms, including, NHL Social and NHL Network.

Boston Beer’s Truly brand has been witnessing robust growth for a while now. In second-quarter 2019, the company’s depletions growth was driven by increase in Truly Hard Seltzer and Twisted Tea brands, despite continued weakness in its core Samuel Adams brand. Moreover, the company plans to further promote the Truly brand with a national draft launch scheduled for third-quarter 2019. It is initiating a new high-profile advertisement campaign for Truly, featuring the famous comedian Keegan-Michael Key. This will build a meaningful and relevant brand, enhancing its position as a leader in hard seltzer category.

Apart from these, Truly Hard Seltzer will help the company to offset softness in Samuel Adams brand. Volume growth for Boston Beer’s Samuel Adams (craft beer) brand has been a key headwind, which is weighing on the overall volumes, depletions growth as well as the top line. The brand is struggling due to the industry-wide softening of the craft beer growth rates and increased choices for drinkers on retail shelves. Notably, volume for the Samuel Adams brand continued to decline in second-quarter 2019, which partly hurt depletions. Nevertheless, the company is working hard on the brand messaging, with focus on the quality and brewing of the Samuel Adams Boston Lager, as well as the new Sam Adams packaging design and a "lighter and brighter" taste for Samuel Adams Summer Ale.

The company remains committed to the three-point growth plan focused on the revival of its Samuel Adams and Angry Orchard brands, cost-saving initiatives and long-term innovation. It plans to revive the Samuel Adams brand through packaging, innovation, promotion and brand communication initiatives. Further, it remains keen on retaining Angry Orchard and Twisted Tea’s momentum while ensuring Truly Spiked & Sparkling's leadership position in the hard sparkling-water category.

Also, this Zacks Rank #3 (Hold) company is focused on accelerated cost savings and efficiency projects with savings directed for further brand development. As a result, the company continues to anticipate improving gross margin by one percentage point every year through 2019. Its third priority is long-term innovation and maximizing the shareholder value. Boston Beer remains optimistic about the future of craft beer and cider categories.

We note that shares of this Boston, MA-based company have gained approximately 41% so far in this year, outpacing the industry’s growth of 27.9%.

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