Zacks Rank #5 (Strong Sell) Boston Beer Co. Inc (SAM) is one of the largest alcohol companies in the United States. The Boston, MA-based company produces beer, malt beverages, and cider products at company-owned breweries. Its popular products include the flagship beer Samuel Adams, Dogfish Head beer, the Twisted Tea malt beverage, Truly Hard Seltzer, and the Angry Orchard cider brand. The company has also expanded to the low calories’ alcohol market with its “Sinless Vodka” offering.
Americans Are Drinking Less Alcohol
Alcohol consumption trends in the United States are extremely unfavorable currently. According to the latest Gallup poll numbers, roughly 54% drink alcohol (down 8% in just three years). For the first time, a majority of Americans believe that even moderate drinking (1-2 drinks a day) is bad for health.
Image Source: Dylan Scott/Vox, Gallup
Additionally, the explosion of GLP-1 weight loss drug consumption from companies like Novo Nordisk (NVO) and Eli Lilly (LLY) has further impacted demand. Recent clinical studies show that these drugs cause even less alcohol consumption by dialing down the brain’s reward pathways and dopamine responses.
SAM EPS Growth Slows Amid Waning Demand
To make matters worse, younger generations are drinking even less alcohol due to health reasons. In other words, the waning alcohol demand trend is likely to only intensify in time. Meanwhile, more than a third of consumers are cutting back on alcohol purchases due to higher prices, while others turn to alternatives that are growing in popularity, such as cannabis.
Since 2022, Boston Beer’s annual earnings per share have fallen each year.
Image Source: Zacks Investment Research
For now, there appears to be no end in sight to this troubling trend. Zacks Consensus Analyst Estimates expect negative revenue growth through 2027.
Image Source: Zacks Investment Research
Worse off, Twisted Tea and Truly, two of the company’s key brands, continue to lose volume and market share.
Tariffs and Commodity Costs Limit Margin Upside
With demand slowing, the only way for Boston Beer to generate more favorable earnings is to increase profit margins. However, the company faces significant headwinds due to tariff costs, which are expected to increase to $20-$30 million in 2026 versus ~$11 million in 2025. Also, aluminum, energy, and freight costs remain an issue.
Valuation is Steep Compared to Competition
Although SAM shares have underperformed dramatically, they are still expensive compared to other alcohol companies. SAM has a P/E ratio of 20.42x while the Beverage-Alcohol Industry has a P/E of just 14.08x.
Image Source: Zacks Investment Research
Bottom Line
With American alcohol consumption near historic lows, Boston Beer Company is fighting an uphill battle. Core brands are losing market share, tariff costs are weighing on margins, and revenue growth has stalled.
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