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Boston Beer Cider Sales Higher Than Previously Thought

Cider is one of the hottest categories in the alcohol space. According to SymphonyIRI, sales of cider grew 27 percent in 2011. Looking to capture some of that growth, Boston Beer, the makers of Samuel Adams and the parent company for Angry Orchard Cider, took the cider nationwide in April.

Jack Andersen | FoodPix | Getty Images

Analysts have been watching the rollout closely and today UBS analyst Kaumil Gajrawala says a mix-up in Nielsen data has been skewing the numbers for Boston Beer’s Angry Orchard sales.

Specifically, Gajrawala says a “misclassification” is understating Angry Orchard retail sales. Gajrawala writes in an report released today that Angry Orchard sales were being classified under the Hardcore Cider brand, which Boston Beer is retiring to make way for Angry Orchard.

According to Gajrawala, a closer inspection of the numbers indicate sales of Angry Orchard in the last four weeks totaled $1.7 million and accounted for 7 percent of the Boston Beer portfolio, up from the previously believed 1 percent. Distribution levels for Angry Orchard, originally estimated to be around 9 percent are now pegged at 21 percent. Based on Nielsen numbers the last four weeks, Angry Orchard has been able to achieve a 22-percent share of the retail cider market overt that time period.

The boost in sales is another positive for Boston Beer, which has been trading at all-time highs of late. With the increase in Angry Orchard sales, the overall summer numbers for Boston Beer are expected to look better than previously estimated as the cider growth offsets declines in other areas.

Still, despite the newfound increase in Angry Orchard sales, Gajrawala maintains a “sell” rating on Boston Beer stock, believing Angry Orchard and Twisted Tea, the products that have been driving Boston Beer’s growth of late, cannot continue their current pace in 2013. Also troubling is the slowing of other crucial Boston Beer brands: Boston Lager, Seasonals and Variety packs are all below their year-to-date trends.

Twisted Tea has been the driving force behind Boston Beer’s meteoric stock increase, which has surged 59 percent over the last two years, but the ride may be coming to an end. Gajrawala says distribution opportunities are running out for Twisted Tea as evidenced by its distribution level being flat from the previous month and year-over-year dollar sales growth lagging year-over-year distribution growth.

Questions? Comments? Email us at consumernation@cnbc.com. Follow Tom Rotunno on Twitter @tomrotunno.

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