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Why Boston Beer Stock Has Soared 42% So Far in 2020

By Demitri Kalogeropoulos – Updated Jul 7, 2020 at 9:22AM

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Its hit franchises helped it avoid a large demand slump as restaurants and bars closed.

What happened

Boston Beer (SAM 0.89%) shareholders are trouncing the market this year. Their stock jumped 42% compared to a 4% decline in the S&P 500 through the end of June, according to data provided by S&P Global Market Intelligence.

That rally has made the craft beer producer a standout in its industry, with rivals such as Molson Coors and Anheuser-Busch InBev each down over 30% in 2020. Even premium import specialist Constellation Brands has lost ground this year.

A man shops for beer.

Image source: Getty Images.

So what

Boston Beer had been outperforming these beer rivals for some time following the successful introduction of its Truly hard seltzer beverage franchise. That platform helped push depletions, a measure of demand, higher by 22% in 2019, the company announced in February. Molson and InBev each revealed slight volume drops for the period.

Investor enthusiasm increased further after the COVID-19 pandemic put a larger premium on at-home consumption, a niche that Boston Beer covers well.

Now what

Boston Beer's fiscal second-quarter report in late July will show much more stress from the pandemic as it will reflect restaurant and bar closures in April and May. Yet the consumer staples stock may continue outperforming as long as the company can show more market share gains in growing retailing categories such as hard seltzers and teas.

Demitrios Kalogeropoulos owns shares of Boston Beer. The Motley Fool owns shares of and recommends Boston Beer and Constellation Brands. The Motley Fool recommends Anheuser-Busch InBev NV. The Motley Fool has a disclosure policy.

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