Boston Beer Co. destroyed “millions of cases” of Truly Hard Seltzer because it despaired of being able to sell them, the company chairman said in a recent interview.
The brewer of Samuel Adams beer overestimated demand for Truly Hard Seltzer, and as the category slowed down, it found that it had overbought ingredients, cans and other supplies, chairman and co-founder Jim Koch said on CNBC’s “Closing Bell.” The company decided to dump the product before the taste was compromised.
“We want Truly to have that fresh, bright taste, so we’re going to crush millions of cases of product before it goes stale,” Koch said. Boston Beer incurred $102.4 million in direct costs and $30.6 million in indirect costs related to the seltzer slowdown in the most recent quarter, although total sales were still ahead of projections.
Discounting the product to reduce inventory was not an option, because “that’s just not what we do at Boston Beer Co.,” Koch said. He added that he expects Truly Hard Seltzer to have a big share of the seltzer market once it shakes out and the “long-tail clutter” of smaller competitors is eliminated.
