It’s often said it’s good to be Irish on St. Patrick’s Day, but it may better to be in the beer business.
St. Patrick's Daywill bring in about $245 million in beer sales, according to industry research firm IBISWorld, and not only are people bellying up to the bar, they are trading up when they do it.
“We’re past the days of green beer," Jim Koch, Boston Beer chairman, founder and brewer, told CNBC. "When people go out they tend to drink up, they leave the cheap beer at home, and they’re going to reach for a Sam Adams or a craft beer.”
Unlike holidays spent at home, Koch said, St. Patrick’s Day is an event which leads people to go out more. As a result, Samuel Adams sees a 13-percent increase in beer sales the week of St. Patrick's Day. “This is a good holiday for us.”
Boston Beer stock is up 16 percent year-over-year and continues to hover around the $100 mark. Koch said the company is benefiting from what is a transformation in the culture of beer.
“Much like we saw with the wine industry years ago, where people used to drink jug wine and they really didn’t know that much about wine, today people are moving away from the mass-produced beers and they’re moving to beers with more flavor,” said Koch.
More importantly for Koch, people are willing to spend more to buy that more flavorful product.
“Sam Adams is a little pricier, but people are willing to pay for quality," he said. "So when barley prices go up, we do have to raise our prices rather than reduce the quality.”
“The (profit) margins bounce around depending on a lot of different things, gas prices, oil prices things like that. The thing that I focus on is really maintaining the flavor and taste of the beer because that’s what people paying for."
While Sam Adams sees a St. Patrick’s Day spike, perhaps no beer is more closely associated with the holiday thanDiageo’sGuinness. The company told TheStreet.com it sold 3.5 million pints of Guinness last St. Patrick’s Day, and it typically sells 600,000 pints of Guinness each day. The brand is riding a resurgence, with Guinness volume up 15 percent through the first six months of Diageo’s fiscal year (June-December).
Questions? Comments? Email us at consumernation@cnbc.com. Follow Tom Rotunno on Twitter @tomrotunno.
