It's been a tough start to the year for beer makers in 2011. After recovering from the financial crisis, we may have gotten ahead of ourselves in expecting the party to continue after an initial rebound.

Three of the four major brewers traded on major U.S. exchanges failed to meet expectations in the first quarter, showing broad-based disappointment in the sector. Even the highflying Boston Beer (NYSE: SAM) fell short of estimates for the second straight quarter. And Constellation Brands (NYSE: STZ) was the only one on the list below to beat estimates, but its business is much more diversified than its beer distribution business.


Q1 2011 Estimated EPS

Q1 2011 Actual EPS

Anheuser-Busch InBev (NYSE: BUD)



Molson Coors Brewing (NYSE: TAP)



Boston Beer



Constellation Brands



A bright spot might have been Craft Brewers Alliance (Nasdaq: HOOK), whose units include Redhook, Kona, and Widmer Brothers breweries. Revenue rose 18%, and shipments increased 15% in the quarter. If Craft Brewers' results are any indication, the long-term trend of consumers preferring smaller brews to the national power brands appears to be continuing.

Boston Beer has led the wave of craft brews for years, but even momentum there may be stalling. After all, part of the reason we drink craft brews is to try beer that's novel and out of the mainstream. While it's still much smaller than Molson and Anheuser, Sam Adams doesn't really fall in that category anymore. I consider Sam Adams closer to Budweiser than I do to a Dogfish Head at this point, and even the latter isn't a small brewery anymore, although both Boston Beer and Dogfish are still technically classified as craft.

Investors may have had a few too many lagers when setting expectations for the first quarter, but slowly, expectations are coming back in line with reality. This isn't a massive growth business, but it's about as steady as they come.