How Boston Beer Co. Got Ambushed by Twisted Tea’s Biggest New Threat

The bigger they are, the harder they’ll tea. We’ve been saying this for almost two years now! Twisted Tea, the flavored malt beverage from Boston Beer Company, has grown into an indisputable colossus over the past half-decade, and everybody in the beverage-alcohol business wants a taste of that literally and figuratively sweet growth. Missing out on incremental sales opportunities? In this economy for brewers? Not the move.

And lo, the flood of hard teas gushed forth from all comers. With a fermented formulation and a stupid-simple saccharine flavor profile, you can grasp how firms big and small could have Mad-Libbed themselves into this piping-hot segment. What if Twisted Tea but less sugar? What if Twisted Tea but better flavor? What if Twisted Tea but in trendy slim cans?

What if? More like as if. After two decades of chugging along mostly alone, BBC’s retina-searing yellow juggernaut has done OK against real competition from well-funded Johnny-come-late-teas. But any financial advisor can tell you that past performance does not indicate future results. It’s not that the country’s second-largest craft brewer doesn’t have a legitimate, sustained hit on its hands, or that it’s incapable of defending its share against the FMB-arbarians at the brewery gates. It does, and it has been so far.

The problem is that fermentables aren’t the only thing going anymore when it comes to sweet, crushable, single-serve molar-rattlers. But the brand currently buoying BBC’s fortunes has no answer to the spirits-based stuff of tomorrow. Surfside, the vodka tea brand you’re going to be seeing a whole lot more of by next summer, has clearly caught the next wave in hard tea. Somehow, despite pioneering the style, BBC missed it — and is paddling furiously to catch up with a “me-too” launch of its own.

Hold that thought, and let’s give some credit where due. It’s almost impossible to overstate Twisted Tea’s success since it hit shelves for the first time as BoDean’s Twisted Tea back in 2001. (Like TheFacebook.com, BBC eventually dropped the first word, but not just because it sounded better — a Milwaukee band by the same name successfully sued over it.) “The Twisted Tea family increased chain retail sales +185% between 2016 and 2021 and, until now, has had virtually no draft presence in bars or restaurants,” reported Kate Bernot for Good Beer Hunting in a thorough 2022 profile of the brand. Brewbound’s analysis of barrelage estimates put its overall growth at nearly 500 percent since a decade ago. It’s now cruising toward the top 10 “beer” brand families in Circana-scanned off-premise dollar sales. Its household penetration is still low compared to other big-name FMBs. Challenger brands from well-capitalized firms like New Belgium (Voodoo Ranger Hardcharged Tea), AriZona (AriZona Hard Tea), Monster (Nasty Beast Hard Tea) have slightly decelerated its growth, but certainly haven’t derailed it.

The vagaries of the hard-tea market, even if you just restrict it to fermented-base stuff (which you shouldn’t, for reasons we’ll get into in a moment) are innumerable, but one tailwind that has reliably helped Twisted Tea soar so far is its sheer longevity. If there was another hard tea on the market 23 years ago when BBC (reportedly inspired by Snapple on the soft-drink shelves and Mark Anthony Brands’ Mike’s Hard Lemonade’s march into the beer aisle) rolled it out for the first time, I can’t recall it. Certainly none caught on. Though my personal adoration of Smirnoff Raw Tea’s viral ad from 2006 endures, the product itself has long since fallen by the wayside. Twisted Tea may not have technically secured first-mover advantage, but it has effectively enjoyed one up until very recently.

Even now, with deep-pocketed brewing incumbents and Big Soda interlopers crowding in, the brand is doing pretty damn well. Bernstein Research recently estimated Twisted Tea’s market share of the off-premise fermented hard-tea segment at 84.5 percent, which is down from a few years ago… but not by much. I think Jim Koch, BBC’s co-founder and chair, was right on last September when he told analysts that most of these “me-too Twisted Teas” have “no reason for being.” Agreed. “The thing you want, but slightly different” is a very thin reed on which to hang a value proposition, and even more so when the original product is just as available. Sure, strong contenders will continue to peel off some Twea-kers with existing brand loyalty, new flavors, and so forth, but only if those pitches can overcome the powerful gravity of the ur-FMB that got them into hard tea in the first place. Many can’t.

Still, some of them clearly have. Bernstein’s analysis, reported late last month by Brewbound’s Jess Infante, in advance of what turned out to be a lackluster BBC second-quarter earnings call, shows the brand’s year-over-year growth has decelerated from 35 percent at this point in 2023 to 10 percent in the here and now. The brand is maturing, and its denominator is big enough now that those eye-popping numbers of yore are probably in the rearview for good. That would be fine if BBC had applied its unmatched understanding of the hard tea segment to a spirits-based follow-up. It didn’t, not fast enough at least. And while it dithered, Surfside snaked its wave.

If you haven’t heard of Surfside yet, you will soon enough. Stateside Distillery launched the ready-to-drink vodka tea brand in 2022, and it’s been going gangbusters ever since. What’s Stateside Distillery? See, that’s the thing: It’s a family-owned outfit in Philadelphia that sells the most craft vodka in Pennsylvania, which is nothing to scoff at, but also not the sort of credentials you’d necessarily expect would give it the drop on the country’s 10th-largest brewer. Especially since vodka iced tea isn’t a proprietary concept: Firefly Distillery has been bottling it since your humble Hop Take columnist was in college. Especially-especially since BBC had all the pieces in place to ride this wave itself. It was dabbling with a Twisted Tea whiskey right around the same time, and would push into High Noon’s lane with Truly Vodka Seltzer Soda less than a year later. Hell, it’s owned Dogfish Head — which boasts both a distillery and an established, high-end canned cocktail sub-brand — since 2019! As a company, it also has the marketing resources to push it hard, and the distribution and retail relationships to make it stick. It just… didn’t.

Maybe BBC was too preoccupied with avoiding another Bevy-style bomb, or reining in Truly’s over-innovation, or trying to soothe distributors calling bullshit on partner PepsiCo’s end-around gambit with Blue Cloud Distribution and Hard Mtn. Dew. Whatever the reason, Stateside beat BBC to the punch (or the vodka iced tea, as it were) and ever since, it’s been reaping the first-mover bounty that Twisted Tea once enjoyed itself. By which I mean, it is posting obscene growth. In mid-July, Beer Business Daily, citing NielsenIQ data, reported that the upstart was up 860 percent in off-premise dollars year-over-year in the trailing four-week frame, with its co-founder projecting 4-4.5 million cases by the end of 2024.

Yes, yes: it’s easier for smaller brands to do triple-digit comps. But Surfside isn’t that small anymore. If that projection holds, Surfside is poised to blow past Anheuser-Busch InBev’s NÜTRL and Cutwater this year. That’s no mean feat considering they’re a) the third- and second-best selling spirits-based canned cocktails in the country, behind only High Noon; and b) both are pretty damn hot at the moment themselves. As BBD noted, the brand hasn’t really figured out California yet, having relaunched with Reyes Beverage Group just this year, and liberalizing laws around spirits-based RTD sales — including, just last month, in its home state of Pennsylvania — will offer it more entrée into more off-premise accounts, a potential flywheel given its unusual strength in the on-premise. Surfside’s wave hasn’t even crested yet.

This is not the sort of growth BBC could ignore forever. Enter Sun Cruiser, Koch and Co.’s answer to Surfside. It’s fascinating! Not the liquid; that’s too sweet for my taste, but just because I trust my palate doesn’t mean you should. The branding is flat-out strong, but also not what I want to focus on. What fascinates me is how Sun Cruiser came to be, and what the brand tells us about the company that pioneered the segment that it’s now trailing.

Twisted Tea’s senior brand director Erica Taylor told Brewbound last November that BBC had been “noodling for a long time” on Sun Cruiser, and considered 2024 the right time to begin rolling it out to select markets. Which, sure: If some distillery from Philly started running up the score with a not-really-new drink that I could have launched myself, I’d probably decide it was the right time to, y’know, launch that drink myself. (So would spirits-based RTD leader, Gallo, which launched a High Noon tea this year as well.) Not extending Twisted Tea into spirits-based stuff makes sense to me. Holding back on Sun Cruiser does not, and suggests that BBC’s recent innovation misses have made the firm gun-shy where it was once gung-ho.

None of this is existential. Twea-kers aren’t going to trade up for Surfside en masse any time soon, and BBC has done a good job so far differentiating Sun Cruiser from its fermented-base hard tea progenitor. Plus, Sun Cruiser is doing all right so far: Koch told investors in the Q2 earnings call last month that it’s “outselling Surfside two-to-one” in New England. And besides, the young-gun brand could biff it: As ever, past performance does not indicate future results. For now, though, you gotta hand it to Stateside — and you gotta cringe, too — watching BBC chase Twisted Tea’s heir apparent rather than crowning it.

🤯 Hop-ocalypse Now

Much has been made in recent weeks of the retrograde, misogynistic, and just plain creepy views of Republican vice-presidential candidate, Ohio Senator JD Vance. Even some GOP operatives are admitting it: Dude’s a sniveling little weirdo. Clearly, the Trump campaign can see it, too, because last week, it dispatched Peter Thiel’s handpicked No. 2 for a little image boost with the NELK Boys, the YouTube shock-jocks who gave Donnie Deals himself an open mic to spew lies about the 2020 election on their channel a couple years back. To loosen up Senator Birth Rates for an appearance on their podcast, “Full Send,” the very-online jabronis presented him with a pack of their stunningly successful Happy Dad hard seltzer. “We’ll use it on the airplane,” Vance said, chuckling awkwardly. “Use it” how, JD? What exactly do you think normal people do with hard seltzer?!

📈 Ups…

After a solid second quarter, Ball Corporation’s chief financial officer once again publicly called on macrobrewers to slash prices, the chutzpah… Athletic Brewing Co. announced an endorsement deal with Arsenal Football Club of the English Premier League… Anheuser-Busch InBev, via its ZX Ventures incubator/loss-harvester, sold the spirits site Masters of Malt back to its owners, which is nice…

📉 …and downs

The once-soaring taproom chain World of Beer filed for Chapter 11 bankruptcy late last week… Just because Dunkin’ Spiked’s new pumpkin-spiced latte flavor was inevitable doesn’t mean I have to like it… Monster Beverage Corporation reported a Q2 miss and a 31.9 percent drop in alcohol sales year-over-year, eesh…

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