The beer-making industry is generally characterized by steady and predictable growth, yet this year major brewers have had a tough time meeting expectations so far. The sector has been slow to recover in the wake of the financial crisis. In the first quarter, three of the four major U.S. beer-makers failed to meet their target earnings per share.
Leading the market in craft brews for years, Boston Beer Company (NYSE:SAM) has had a particularly tough time. Their estimated EPS was $0.45, yet the company only managed an EPS of $0.28. Part of the problem for Boston Beer might be that the demand for craft beers may have declined in favor of more affordable and recognizable brands, such as Budweiser (NYSE:BUD).
In spite of the disappointing first quarter EPS of its competitors — Anheuser-Busch InBev (NYSE:BUD), Molson Coors Brewing (NYSE:TAP), and Boston Beer (NYSE:SAM) — Constellation Brands (NYSE:STZ) beat estimates. Constellation differs from other companies, however, in that they produce wine and spirits as well as beer. In addition to the trend of consumers opting for Budweiser over say Dogfish Head, beer drinkers also seem to be preferring smaller brews to national giants, as evidenced by the success of Craft Brewers Alliance (NASDAQ:HOOK), for which revenue rose 18% and shipments increased 15% in the first quarter.