Company posts a 7% increase in depletion’s
Boston Beer Company reported a third quarter core product depletion’s increase of 7% as compared to the third quarter of 2009. Year-to-date depletion’s are up 11%.
Net income for the third quarter was $15.4 million, an increase of $5.0 million, attributed primarily to increased core shipment volume and partially offset by increased selling and general and administrative expenses.
Jim Koch, Chairman and founder of the Company, commented, “We achieved depletion’s growth of 7% in the third quarter, and total depletion’s grew to 8.5 million case equivalents. This record third quarter for total depletions is due to our strong sales execution and continued support from our wholesalers and retailers. While we are pleased with the results, depletions growth in the quarter slowed from the first-half growth rates due to tougher year-on-year comparisons and the timing of certain promotional activities. We continue to see expanded distribution of domestic specialty brands and local craft brands, which is increasing competition in the category. We are happy with the health of our brand portfolio and remain positive about the future of craft beer.
“We have started testing a Freshest Beer Program with two wholesalers to reduce wholesaler inventory and improve the freshness of our beers in those markets. Wholesalers typically carry four to five weeks of packaged inventory and three to four weeks of draft inventory. Our goal is to reduce this through better on-time service, forecasting, production planning and cooperation with the wholesalers. We believe that in the long term this program will improve the quality of our beer in the market and reduce costs and improve efficiency at our breweries and in the distribution system. We are excited by the opportunity this Freshest Beer Program presents and intend to continue to learn and, if successful, expand testing to cover more of our volume.”