One Beer Maker Bets on Vodka Tea Innovation as Its Rival Defends Legacy Brands

TAP +2.62% TAP-A +6.14% SAM +3.11%

Quick Read

• Boston Beer’s Twisted Tea fell 5% while the category declined 3%. Sun Cruiser became the fourth-largest ready-to-drink spirits brand.

• Boston Beer expanded gross margin to 50.8% by shifting 90% of production in-house from 66% a year earlier.

• Molson Coors grew EBITDA 17.5% to $2.55B despite a 2.3% revenue decline through cost discipline.

• Investors rethink ‘hands off’ investing and decide to start making real money

Boston Beer (NYSE: SAM) and Molson Coors (NYSE: TAP) reported earnings revealing starkly different approaches to surviving the beer industry's toughest stretch in years. Boston Beer posted Q3 revenue of $537.5 million, down 11.2% year-over-year, while expanding gross margin to 50.8%. Molson Coors generated $11.21 billion in trailing twelve-month revenue but carries negative TTM earnings due to restructuring charges.

Twisted Tea Stumbles While Sun Cruiser Accelerates

Boston Beer's Q3 results centered on two opposing forces. Twisted Tea, the company's $1.2 billion flagship brand, declined 5% in measured off-premise channels during 2025, losing share in a flavored malt beverage category that fell only 3%. Founder and CEO Jim Koch acknowledged the brand's vulnerability: "The Twisted Tea drinker profile is particularly sensitive to these impacts as they typically have less household income than drinkers of our other brands."

Sun Cruiser, Boston Beer's vodka tea innovation, provided the counterweight. Koch called it "the next iconic brand for our company," noting it became the fourth-largest brand in the ready-to-drink spirits category and leads the on-premise bar and restaurant segment. Distribution tripled through 2025.

Molson Coors showed more stability but less dynamism. Revenue declined 2.3% year-over-year in its most recent quarter, with core brands like Coors Light and Miller Lite holding share in a contracting market. EBITDA grew 17.5% from 2023 to 2024, reaching $2.55 billion, driven by cost discipline. The company trades at 0.92 times book value and offers a 3.84% dividend yield.

Metric

Boston Beer

Molson Coors

Gross Margin

50.8% (Q3 2025)

38.7% (TTM)

Revenue Growth

-11.2% YoY

-2.3% YoY

Dividend Yield

None

3.84%

Market Cap

~$2.3B

~$9.7B

Premium Innovation Versus Portfolio Defense

Boston Beer's strategy hinges on premiumization and category creation. The company produced 90% of volume internally in Q3 2025 versus 66% a year earlier, driving procurement savings and brewery efficiency gains that pushed gross margin to its highest level since 2018. CFO Diego Reynoso emphasized this operational shift as foundational to margin expansion despite volume declines.

Molson Coors operates as a portfolio manager protecting established brands. The company's forward price-to-earnings ratio of 8x and beta of 0.45 reflect a defensive posture. Director Andrew Thomas Molson acquired 7,500 shares at $46.79 in November 2025, a $350,925 investment. No insider selling occurred during the period.

Which Holds Up If Consumers Stay Cautious?

Both companies face industry headwinds Koch described bluntly: "Economic uncertainty that has consumers more tightly managing their budgets as well as pressure on Hispanic consumers continues to impact consumer demand negatively across the overall beer industry."

Boston Beer's path forward depends on whether Sun Cruiser can scale fast enough to offset Twisted Tea's decline. The brand already sources roughly 20% of Twisted Tea's volume loss, which Koch noted is "revenue and gross margin accretive." Molson Coors needs cost discipline to sustain EBITDA growth while revenue stagnates.

Comparative Risk-Reward Profiles

Boston Beer has declined 78.45% over five years while expanding gross margin to 50.8%. The company focuses on innovation with Sun Cruiser, which became the fourth-largest brand in the ready-to-drink spirits category, and operates with no dividend. Molson Coors trades at a forward P/E of 8x with a beta of 0.45, offers a 3.84% dividend yield, and maintains established brands like Coors Light and Miller Lite through cost discipline that drove EBITDA to $2.55 billion in 2024.

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