Is it Truly Over?

Did Hard Seltzer Just Fizz-le Out?

Boston Beer Company, parent company to Sam Adams, Dogfish, Truly Hard Seltzer and Twisted Tea has taken a bath in 2021. Down over 50% from it’s 52 Week High of ~$1350 per share, the stock currently trades at around $520 per share. The big reason is an unexpected slowdown in Hard Seltzer. I started a position after it’s last earning call when the stock dropped under $770. I assumed that at a near 50% discount, the bottom was in. I was wrong and started averaging down. I soon found myself 15% down and realized I needed to do more homework.

I decided to take a deep look into the alcohol business to understand the future for Hard Seltzer.

Before I give my evaluation, here are some key terms and facts that anyone investing in Beer Stocks should be aware of.

Terminology

To understand the business you need to understand a few key concepts.

Consumption

Consumption is done via two channels.

On Premise (Bars, Restaurants, Airports) and Off Premise (Purchase at Grocery/Retail Stores).

These are the common terms used to classify the two streams of revenues for Beer Makers.

Regulation

In the US there are 3 types of consumable liquor products. Wine, Malt Based and Spirit Based Liquor. In many states, Malt Based is the only type of Liquor that can be sold at Grocery and Drug Stores. Malt Based includes Beer and an assortment of products called Flavored Malt Beverages or FMBs (Wine Coolers, Spiked Teas, Hard Seltzers, etc).

Spirit based liquors are things like vodka, gin, whiskey, etc or cocktail mixes which contain these spirits even in small amounts. Some Hard Seltzer falls into spirit based liquor, usually made with Vodka or Tequila.

Distribution

Beer manufacturers often partner with distributors who provide grocery stores and HORECA (Hotels, Restaurants and Cafes) with their supplies of beverages. This is one of the most important parts of the liquor industry! Distribution makes or breaks your product.

You will often hear the word depletions. Depletions is the amount of inventory that is moved. It is the key metric in the Liquor Industry.

Market Overview

All of these stats are pulled from Statista’s 2020 Worldwide Alcoholic Drinks Report, Alcoholic Beverages in the US Report, Beer Industry in the US Report and 2021 Hard Seltzer Worldwide Report.

• In 2019 the global market for Alcohol was ~1.7 Trillion Dollars

• Beer makes up close to 40% of the revenue share world wide.

• Spirits makes up close to 30%

• Wine 23%

• Alcohol sales have a CAGR of 4.5% since 2012

• Overall consumption globally is trending downwards since 1980 as consumers become more aware of the side effects of alcohol consumption

• The alcohol industry is very different from country to country

• Brand awareness in alcoholic drinks is lower than that of most other consumer product categories (28% in the USA)

• In the US alcohol consumption peaks in the late 20s to mid 40s and declines afterwards

• Alcohol has historically not sold well online

• From 2010-2014 US Craft Beer share grew from 5% to 11% but has since leveled off to 13.6% in 2019. It’s at a saturation point

• In 2019 54% of beer was consumed ON Premise (i.e. at restaurants, bars, cafes, etc.)

• Since 2017 Hard Seltzer has shown explosive growth with revenues growing 10x from 2017-2020

• The leading domestic beer brands are Bud Light, Coors Light, Miller Lite, Budweiser, Michelob Ultra Light

• Leading Imports in the US are Corona, Modelo, Heineken

• In 2019 Light Beer had a 41.5% product share in the US, FMB had a 5.1% share. It’s currently estimated at an 8% share of market due to the rise of Hard Seltzer.

Hard Seltzer Market

• Prior to 2020— 55% of Seltzer was consumed OFF Premise (at-home). This amount spiked to 70% in 2020.

• Truly Hard Seltzer had 614% YOY Sales Change in 2020

• White Claw is the largest player in the market with nearly 2B in Sales in 2020

• Truly is 2nd in FMB with 922M

• Twisted ($SAM brand) is 3rd in FMB with 506M

• Other key players in the space include Seagrams, Smirnoff, Mikes (Same Parent Company as Truly) Budweiser, Bon and Viv (formerly Spiked Seltzer, an A/B Brand), PRESS (STZ has a minority stake), High Noon, Vizzy (Coors) and Topo Chico (Coors)

• Important distribution distinction between high end spirit based seltzer and low end malt based seltzer

• Hard seltzer is both an FMB (Flavored Malt Beverage) and a RTD beverage (Ready to Drink).

What’s the deal with $SAM?

As mentioned earlier in the article, Boston Beer Company’s Stock has imploded over the past 6 months. It started when industry experts began to whisper about slowing growth in Seltzer. Then came last quarter’s miss on earnings from management and a warning about the slowdown. Most recently management withdrew company guidance for the Fiscal Year and warned of write-offs and shortfall fees.

Here’s an explanation.

From management’s guidance update:

Industry reports have estimated that the full year 2021 volume for hard seltzer market retail sales will have over 100 million fewer cases than the volumes estimated in May 2021.

While demand for the Company’s hard seltzer products continues to grow at faster than category rates in measured off-premise channels, we believe there will be continuing uncertainty about hard seltzer demand trends for the remainder of 2021.

As a result of this uncertainty and its impact on our volume trends, the Company is withdrawing its 2021 financial guidance issued on July 22, 2021. Further, the Company now expects to incur hard seltzer-related inventory write-offs, shortfall fees payable to 3rd party brewers, and other costs that will be expensed during the remainder of fiscal 2021.

I researched different industry estimates. Statista provided estimates from Rabobank that had retail sales around 172M Cases in the US for 2021. International Wine and Spirit Research estimated that they would be over 280M in 2021 (they had originally forecast this amount for 2023 but revised due to growth in 2020). Beverage Marketing Corporation estimates currently Hard Seltzer sales are 214M cases or 8% of the beer market, although the reference isn’t clear I believe this is TTM data. It’s not clear if these cases were estimating Off Premise Retail Only or if they included On Premise Consumption.

Regardless of what source Boston Beer used, a downward revision of 130M cases to the Hard Seltzer market is significant.

Having said all this…

How is the Hard Seltzer Market Right Now?

Information Resources Inc. data for 52 weeks ending June 2013 had Truly Sales at 1.1B and White Claw Sales at 2B. Considering that Boston Beer Companies Total Trailing Twelve Month Revenues were just at 2B, that gives you an idea of how important Truly has become to this company. And it’s growth rate is still at 90% TTM (this number will likely drop by years end). Hard Seltzer Data is still strong…it just seems that growth estimates were way over done.

IWSR said “Despite recent rumours of its imminent demise, the hard seltzer market in the US is evolving and maturing, with an increasing focus on value over volume growth….companies worrying about the inevitable slowing of volume growth from the stratospheric levels seen in the US in 2020 risk missing out on beneficial trends such as premimuisation, the reopening on-premise, spin-offs from established brands and the emergence of spirit-base seltzer-like products.”

IWSR had originally forecast 70% growth in 2021. Versus 130% in 2020. In 2020 the volume growth was close to 110M cases at what we believe to be nearly 180M cases in the US. 70% growth would have placed the cases at nearly 300M cases. BMC’s June Data suggested that number had been closer to 40-50% growth. At the midpoint that would be around 260M cases, far above the Rabobank forecast but about 40M cases below IWSR’s data. Again it’s possible that these comparisons aren’t apples to apples if they are not including both off and on premise consumption.

Why did Boston Beer Forecast So Badly?

Where did Boston Beer get its data from? This is the mystery question as I can’t find a disclosure in their 10K about sources they use for relevant market data. I’ve reached out to Investor Relations to see if I can get an answer.

Edit — I received a call from Investor Relations, they referred me back to the earnings calls and annual report. At the start of year they were projecting for 35-45% depletion growth. This was then adjusted to 25-40% depletion growth. They have now pulled guidance. 9/21

My guess is that they probably were anticipating another year of 100%+ growth in Seltzer at the start of the year which would have been upwards of 400M cases. If this guess is correct, then it would mean they’ve now revised closer to the 260M cases.

Edit — Based on the above projections…Sam had revised it’s own predictions down between 11 and 28%. A revision from 400 to 270 would indicate a 32% total market guidance. This could explain why management pulled guidance as it’s below the lower range of downward projections. 9/21

Or it’s possible that they over shot their own growth based on last years 700% growth. You can be forgiven for struggling to project growth with numbers that were so incredible.

According to IRI, Truly now has 29% of category share. Using an estimate of 260M cases, this would put them at 75M Cases for 2021 if this is true. Just using a $15 per case number that would imply around 1.1B in sales up just 22% from 2020 (923.24M). This is in line with the 1.1B TTM numbers that was given by IRI.

So I feel very strongly that this is likely going to be near the total year number. I’d estimate in the range of 1.1-1.3B in sales for Truly as it laps tough comps for the next few quarters. On the surface compared to 691% YOY in 2020, <30% growth in 2021 seems rather pitiful. However the return to on premise consumption was always going to bring challenges as those business run on taps/kegs not on cans/cases. Too the incredible surge in demand has attracted multiple competitors into the space. Alcohol consumers as mentioned earlier are not tied to brands, they are willing to try and experiment and both Truly and White Claw have suffered as a result. Before discussing the future, let’s look at the consequences over the next year from this miserable quarter.

Implications of Write Downs and Fess to Third Party Brewers

To understand the write downs along with fees, you need to understand two key things.

1. Brewers expect Distributors to keep fresh product in stock and discard expired products. Especially with a brand like Truly is this true. If your first experience with a brand of beverage is something that’s flat and stale…it will likely be your last experience. You’ll never buy it again. So when you have an excess of product…you will have write downs. Distributors also are highly incentivized to overweight products that move quickly. They are a low margin, high volume business. So they will stock and push things that are selling well. This can fuel a boom, but exacerbate a bust.

2. Shortfall fees to 3rd party brewers. COVID-19 has resulted in lowered capacity in manufacturing. For years Boston Beer Co. and other brewers have used 3rd party brewers such as City Brewing Company (source 2020 10K filing). Last year City provided 33% of Boston Beer Co.’s annual shipment volume.

What’s the worst case scenario?

In accordance with the City Brewing contract and other production arrangements, the Company is obligated to meet annual minimum volume commitments and is subject to contractual shortfall fees if these annual minimum volume commitments are not met. At December 26, 2020, if volume for the remaining term of the production arrangements were zero, the contractual shortfall fees would total $70.7 million through December 31, 2026.

Likely looking at 10M dollars max in short fall fees. That would have been about 5% of last year’s profits.

However it’s the inventory write downs which may be the most costly part of this.

Just looking at the numbers and making some assumptions but I’d guess that excess inventory is going to be between 10% and 20% if the management did indeed expect a 20-25% share of a 400M case market. This could create some significant losses depending on whether these products got canned, send to distributors, etc. Worst case scenario they could wipe out the entire years earnings or more. I would fully expect 2021 numbers to be a near wash due to the forecasting errors.

Edit: Based on 2020 and 2019 numbers, 1st half product sales may range between 42 and 45% of annual sales. This suggests that total revenues should still be north of 2B based on first 6 months. Based on managements gross margin projections, COGS including excise taxes may range as high as 1.3B dollars (assuming 40% growth in line with original revenue growth expectations). Assuming OPEX is 670M as previously projected, this suggests a net income range from 0 to 200M or $0-$16.5 EPS.

Were this to happen (0 EPS — worst case scenario) you could see some panic selling on the stock. I suspect we will have an answer on next quarter’s conference call. I don’t expect it to be one that I will like. 2022 may also present a challenge to forecast. From 2023 onward the company should have a clearer picture of production and these challenges should abate.

What’s the Long Term Path going forward?

Now we get into the more interesting part. What’s the future? In order to understand the paths it could take, you have to look at

• Who is drinking Hard Seltzer?

• What lessons the history in Beer/FMB hold for us?

• How the Seltzer process compares to Beer.

Who is drinking Hard Seltzer?

Young people. Of Gen Z drinkers in a Drizly survey of users and non users of legal age, almost 70% of participants identified as having tried Hard Seltzer with nearly 60% saying they planned to continue to drink it. Millennials was the second highest frequency drinkers at ~60% having tried and ~50% planning to continue.

This bodes very well for the future of Hard Seltzer. In 5 expert interviews the two scenarios which came up most often were Hard Seltzer is the next light beer and Hard Seltzer is the next craft beer. Most of the industry insiders believed that Hard Seltzer could be the light beer for the next generation of drinkers. We’ll explain later but this could mean a staggering windfall for $SAM shareholders if true.

The thought process which some of these insiders explained, is that younger people have grown up drinking juice boxes, La Croix and Coke Zero…all healthier beverages. They are more conscientious about image due to social media and we all know beer is highly associated with a belly. Hard Seltzers may have 1-2g of sugar, making them more attractive for those on the ketogenic or gluten free diets. Also they have a wider flavor profile. One expert made the point that 40 years ago you had maybe 1 flavor of Oreo, either Coke or Diet Coke, and maybe 2-3 types of Lays Potato Chips. The new generation is used to exotic flavors from Hazelnut Oreos to Flaming Hot Cheetos to Cherry Vanilla Coke Zero.

Also while the older generation may find the taste of Stevia to be awful, many younger drinkers are accustomed to it’s taste. What they find awful is their first taste of beer, which is an acquired taste. Hard Seltzer is much easier for a new drinker to enjoy.

Of existing drinkers, when asked in an Axios survey when drinking Hard Seltzer, 43% were giving up Wine, 42% were giving up Mainstream Light Beers. 39% were drinking less Vodka. All of these are typically portrayed as healthier than your Craft IPAs, Spirits and other Malt Beverages. Again this tends to suggest that Hard Seltzer will be stickier because it fits the profile of the most popular beverages on the market right now.

Lessons from the Past

One of the reasons why the drop in Seltzer share is so alarming is that many feel that this is just another trend. Alcohol tends to be trendy. Cider was a trend once. IPAs were a trend. At one point you’d have blueberry, strawberry, cupcake flavored IPAs etc. Over time these trends ended up fizzing out.

It’s worth remembering however that light beer could once have been thought of as a phase…but it wasn’t. Even though it now has a dominant market share of the beer industry, light beer went into fashion in the 70s. Coors Light was originally introduced in the 40s, but then discontinued until the late 70s, early 80s. Before that Americans did not drink light beer.

All of this suggests that you have two reasonable Serviceable Addressable Market Scenarios for the US Hard Seltzer Market

Scenario A — Hard Seltzer is the new Craft Beer

Scenario B — Hard Seltzer is the new Light Beer

Now that we have some ideas about potential market sizing, let’s look at how products would fit in these markets.

Differences in Product Manufacturing

From a manufacturing point of view, Seltzer is more akin to Light Beer than Craft Beer. According to an insider…it’s harder to perfect.

Now if you are a craft beer drinker (I am) you may think that it’s blasphemy to say that Light Beer is harder to make than Craft Beer. Industry experts say it’s true. The reason why every new brewery wants to make IPAs and Craft is because it’s more forgiving and it’s trendy. Because light beer has to have a cleaner, crisper taste, it’s very easy to throw it off by adding a wrong note. With the IPA you may bury it in the hops.

Insiders say the same is true of Malt Based Seltzer.

In fact a former Sam Adams executive admitted that Truly tasted awful at first. It took 3 reformulations to get the brand to where it’s at. White Claw fared much better from the jump which is why White Claw is the dominant player in Seltzers.

This also tends to suggest that at least in the FMB market, you will have less competition from the ‘start up’ crafters. Of the major players in the Seltzer game only one, PRESS, doesn’t have a big name owner (although Constellation has a minority share in it now).

Most all of the other players are owned by the big name companies like A/B or Coors. White Claw is part of the same family that Mike’s Hard Lemonade is (Mark Anthony Brands).

Differences in Product Distribution

Combine the challenge of making the product, with the challenges of distributing the product…and you have the makings of a market that won’t welcome multiple participants. Right now some estimates have over 700 brands having come to market in the past few years. This will take time to sort out. However the sorting will happen faster than craft. That’s because Seltzer is more often an off-premise drink then an on-premise one.

Unlike Craft where there are tap rooms with 100s if not 1000s of beers on draft, Seltzer is primarily drank at homes or at gatherings with friends. That means it will be sold more often than not in grocery stores. Grocery stores can’t have 1000 brands…and this is where having the right setup is important.

Industry insiders say to a man that Boston Beer has one of the best organizational structures in the business. It’s marketing, sales and ads team are top notch. They will always manage to get their product placed alongside much bigger giants in the industry. Maybe that’s the advantage of being founded by a Harvard MBA.

Differences in Product Branding

Perhaps the biggest difference between Seltzer and Craft is its Brand. Craft was the drink of hipsters. Seltzer is not. One look at the IG feed of Truly or White Claw and Seltzer has an almost sex appeal about it. Similar to how Corona crafted the beach drink brand, Hard Seltzer evokes that same type of imagery. It’s branded as a healthier, fun, sexy product and that tends to suggest again from a product perspective it’s more like light beer, and less like craft.

For all of these reasons I expect that the market structure will reflect more of the light beer structure and less of the craft beer.

Assigning Probabilities

Even though Seltzer has more in common with light beer than with craft beer, the probabilities are higher that the volume of sales will be closer to that of craft and the incumbent favorite American alcohol (light beer) continues its reign. Incumbents don’t die easy.

Because of that, in modeling the potential for the product I am working on the assumption that the total market for seltzers will be more like craft beer, but the distribution of market weight will reflect that of light beer (very brand dominated). Many industry insiders would disagree with that assessment. Not the distribution of market weight, but the total sales volume over time. Many believe that seltzer is the new light beer.

On the other hand a few view it as a fad that is almost certain to die. I will also account for it as possibly being a 0 return investment.

Here are my scenarios:

…It’s a Bust

As I’ve stated before, I think it’s worth assigning some potential that this is a flash in the pan. From a data perspective there are some things that concern me. I posted on Twitter some data I had seen from internet reviews. The decline in Truly over the past few months was noticeable. I’ve also been checking Truly IG followers. Today for the first time it lost followers. While I haven’t checked daily, the trend when I first started monitoring in August was close to nearly 100 new followers daily, it trended downwards to the 50-60 range. This is something I will watch closely to see if it continues to show weakness. It could also just be a phase where the hype cycle is passing, influencers are trying to catch the next wave, and after a few months or some consolidation it returns to growth. Or it could just be a sign that summer is over.

Also worth mentioning that internet purchases of alcohol is <5% of purchases pre-Covid. So some of the review data could also be just a normalization of people buying alcohol in person and not online.

Having said all that I’ll assign a 10% probability that investors see 0 returns.

…It’s the New Craft Beer

Craft Beer right now currently has a 13% share of the US. Since 2011 there have been over 200B Dollars in Craft Beer Sales. Lets assume that it tops out at 300B dollars. Truly currently has a nearly 30% share and growing of the Seltzer Market.

Let’s assume 3 scenarios. 8% market share, 16% market share, and 24% market share. This is still significantly larger than any craft beer, but given the novelty of the product it’s hard to make firm projections.

These share projections would amount to 24B, 48B and 72B in total revenues over the life span.

Given that FMB and Beer is about a 15% Margin product, we’d be looking at a business with a potential lifetime earnings of between 3.6 and 9B dollars. Not shabby for a business trading at 6.44B which includes Twisted (another fast growing FMB product), Angry Orchard, Dogfish and Sam Adams. I’ll assign a 80% total probability to this scenario distributed 20%/ 40% /20%.

…It’s the New Light Beer

Light Beer is the king of US beers. Beer in general is a 110B per year business in the US and light is 41% of it. However we must account for the difference between OFF-premise and ON-premise. In 2019 OFF-premise sales were at 65B per year and growing. ON-premise has been flat for years. Obviously 2020 OFF-premise were even higher due to the pandemic. Let’s just use 65B as a number going forward for OFF-Premise.

Hard Seltzer hasn’t shown that it has strong ON-Premise attraction. Truly is now on tap at some locations, but it may take a while for ON-Premise to grow. I suspect It will never match Light Beer in this respect. I will only use a 15B potential for ON-Premise.

Light Beer has been the dominant beer for the past 30 years. We’ll use 30 year as the life expectancy for hard seltzer in this scenario and we’ll only model for 65B in Off-Premise along with 15B potential in On-Premise. That means we are looking at an 80B potential market annually. As state earlier, Light Beer currently has a 41% share of all beer sales. We’ll assume Seltzer is the new light beer and assign the total market at 41% of 80B each year for 30 years.

Currently the US’s leading beer producer has a 42% share of market (AB), the 2nd leading producer Molson Coors has a 35% share. In this best case scenario we will assume that Truly’s 29% position is sustainable.

If we use these assumptions then at peak Truly could generate total revenues over 30 years of nearly 285B dollars. At a 15% margin that would mean 42B in potential profits.

This is exactly why Sam Adams rocketed to nearly 1,400 a share earlier in the year. Because the market was convinced that Truly was the new Coors Light. We’ll assign a 10% probability to the market’s earlier assumption being correct. Numerous industry insiders are convinced that this is the new light beer and that it will be dominated by White Claw and Truly. I think given the incentives for established light beer brands to resist this trend, and the challenges of a primarily OFF Premise distribution model, that this is a reasonable assumption.

…It’s somewhere in between

The reality is that Hard Seltzer will most likely fall somewhere in between Light Beer and Craft Beer. So I will use the following projections:

10% Probability of best case Truly is the new Coors Light scenario…42B dollars

20% Probability of a Truly as a very dominant Craft Beer scenario…10.8B dollars

40% Probability of a Truly as a dominant Craft Beer scenario…7.2B dollars

20% Probability of Truly as a strong Craft Beer…3.6B dollars

10% Probability of worst case scenario…0 dollars.

Probabilistic Fair Value Estimate….9.96B dollars

I’ve ran this scenario tweaking the inputs. I’ve gotten between 8 and 13B as a FVE for Truly. Considering this is a business that is doing over 1B in sales and is still in growth phase albeit slowing growth, it doesn’t seem to be an entirely unrealistic prediction if Seltzer turns out to be a longer term business then some may expect.

Conclusion

Right now Boston Beer and Hard Seltzer is in the trough of the hype cycle. Amidst the right sized expectations and difficult comps, the market has forgotten that the business is still growing.

Consolidation in Seltzer is already happening (Coors has given up [smartly I might add] on it’s Coors branded seltzer) in favor of Vizzy and Topo Chico.

A/B has already rebranded Spiked Seltzer once, and is now introducing it’s Bud Seltzers (which I suspect will only take share from it’s Bud Light Lime and Bud A Ritas crap). Corona may be more of a threat to possibly take share.

One thing to also think about is how patient will the industry leaders be with seltzer? Seltzer eats away at the light beer market. A/B and Coors are kings in the light beer market. Every dollar they spend on Seltzer, they can’t spend on light beer.

In times of trouble, this may lead managements to starve new products of the needed budgets to thrive. A/B trying to brand Seltzer with a Bud logo seems to be the prime example of this type of mentality. Why any management would think that branding a seltzer with the Bud logo is a good idea, boggles the mind. Nobody wants a Budweiser flavored seltzer. However they are trying to borrow from Bud’s brand equity to build it’s seltzer line. I think this is a mistake.

Also worth thinking about is how White Claw will use this time of lessened demand. One of the things which allowed Truly to grow 600% in a year was it’s ability to innovate. A White Claw Insider stated that White Claw couldn’t innovate because it couldn’t keep up with the demand for it’s product. Truly on the other hand, was forced to redefine itself and then took advantage to create multiple iterations of its seltzer including, tea, lemonade and fruit punch. Truly has also created slushies, slush pops, candies, candles, schwag, etc.

Now White Claw will have some time to innovate. It is possible that they can develop products to push back on Truly’s increasing market share. The slow down in Seltzer generally could be a reflection of less Off Premise activities and more On Premise. While experts had expected Seltzer to be a summer hit, it’s growth slowed partially due to the insane comps. As more Gen-Zers hit drinking age, it’s worth seeing how Hard Seltzer evolves over the next 5 years. It could continue to grow it’s share of the market by 1-2B yearly. This would put it at a 13% share by 2026. Whether it grows beyond that and becomes the next light beer is anyone’s guess.

Final Notes on $SAM

One thing worth thinking about too when it comes to Boston Beer. It has a clean balance sheet. It has optionality. As stated earlier they are currently outsourcing 35% of their production. It’s possible that over time they may look to expand their current facilities. With the company owning over 200 Acres of Land (edit), they have plenty of space to potentially build their own Seltzer Manufacturing Capabilities and improve margins. This section contained a factual error which has been corrected.

Truly isn’t it’s only business that’s having some challenges at the moment. In the industry Sam Adams is known as an Airport Beer. They have good relationship with Host Marriott (the airport food service vendors) which allows them great placement in the airports in America. With business travel still recovering, this hits one of their great sources of On Premise revenues. How this recovers over time remains to be seen. I do think travel in general will not completely recover after the pandemic.

The company has a reputation of innovation and they aren’t done with Truly yet. Their Beam Suntory partnership will bring the Sauza tequila brand into RTD beverages and Truly into bottle spirits. They also are working on a new hard Mountain Dew product. Dogfish has some canned cocktails that have come to market, and they recently announced Bevy Long Drink which is a malt based RTD of a popular Finnish cocktail. They were one of the first in Seltzer and while they didn’t get it right off the bat, they were quick to reformulate and then to iterate and innovate across the product line.