- Boston Beer Co. CEO David Burwick told CNBC's "Power Lunch" Aug. 30 the company is looking at the cannabis market for potential investment since it's had such a positive experience in the hard seltzer category. The company's Truly Hard Seltzer comprises about 29% of market share, CNBC said.
- Burwick, however, told CNBC that the company's plan to enter the cannabis segment is further in the future, and it won't be the first one to wade into the market.
- For two years beginning in 2015, the beer company's Sam Adams brand experienced sharp declines. However, Boston Beer saw stocks rebound after the launch of its hard seltzer. What it learns from the category could be useful as it eventually tries its hand at cannabis, Burwick told CNBC.
When and if Boston Beer decides to enter the cannabis category, it will join a slew of others already moving forward with cannabis-infused foods and beverages, including beer, with more in development — or at least in the idea stage. Arizona Beverages and Dixie Brands, a Denver-based cannabis company, recently formed a partnership to produce, distribute and sell marijuana-infused products.
In California, Lagunitas Brewing Co. has launched Hi-Fi Hops, an "IPA-inspired" sparkling water infused with THC, although it's only being sold in dispensaries in that state. Mondelez, the maker of Triscuits and Oreos, recently told CNBC that CBD could be included in its future snack innovations.
The Canadian market will soon get more interesting as it allows the sale of some infused food and beverage products starting in December. AB InBev and Tilray have partnered on nonalcoholic beverages containing THC and CBD for that market, while Molson Coors' Canadian unit has formed a joint venture with Hydropothecary Corp. to develop nonalcoholic, cannabis-infused beverages.
The potential value of cannabis-infused items is huge. Spending on all cannabinoids, including marijuana and its psychoactive THC derivative, is projected to grow to $4.1 billion by 2022 from $1.5 billion last year, according to a report from BDS Analytics.
Entering the cannabis market is just one of many strategies beer makers are considering because of lagging beer sales. By the end of 2018, beer volumes had dropped in the U.S. for five years running. To get those consumers back and lure new ones, beer companies are also trying hard seltzer, flavored malt beverages and domestic super-premium brews.
The strategy has worked well for Boston Beer, thanks to its Truly brand, which last year helped offset two years of losses sustained by the company's Sam Adams flagship brand, CNBC reported. Following Truly's introduction, the company's stock rebounded and nearly hit $440 as of Aug. 30 — an almost 80% jump for the year to date. Boston Beer shares were trading at $411.10 after hours Sept. 3.
Despite the innovations, the company continues to be well-established in the craft beer space and recently took a big step to solidify that position. Boston Beer said in May it is buying Dogfish Head Brewery for $300 million in cash and stock. The deal should close later this year and will create a craft beer platform that can compete against the big global beer conglomerates within the category, the two companies said.