Retailers, consumers and prices
Sam Adams founder preparing for the Big Leagues
When Jim Koch decided to start making Sam Adams beer in 1984, he raised $140,000 from friends and family, pooled that with $100,000 of his own money, and set a target. Within 5 years his Boston-based brewery would cook up 8,000 barrels of beer a year.
Twenty-four years and a stock IPO later, Boston Beer Co is selling nearly 2 million barrels of beer a year and is poised to become the largest U.S.-owned brewer. Assuming InBev’s takeover of Anheuser-Busch goes through.
When the St. Louis-based brewer of Budweiser falls into foreign hands, it will be the third of the big U.S. beers to do so, following Miller‘s combination with South African Breweries and Coors’ tie-up with Canada’s Molson Inc.
The Anheuser buyout puts Boston Beer in a bizarre situation.
“Like your kid’s Little League team winning the World Series because nobody else showed up,” Koch said. ”Anheuser-Busch spills more beer than we make.”
“We’ve gone from being invisible to infinitesimal all the way up to tiny. We’re not even small yet,” Koch said of his company, which now makes nearly 2 million barrels a year and has 0.8 percent share of the U.S. market. The company has a market capitalization of $576.3 million, based on the latest available share count.
Another interesting consequence of consolidation is what Koch called a “complete role reversal for American beer”.
“When I started making Sam Adams, they (American brewers) owned the quantity part of the market, but not the quality part. Today, these large foreign-owned breweries now have the quantity part of the market and the American brewers — Sam Adams and our fellow craft brewers – own the quality part,” he said.
Koch, a sixth-generation master brewer, says that despite Boston Beer’s catapult, it is still a ”craft brewer” since it is small, independent and traditional. But he is not married to “small” forever.
“I would love the day to be that we’re so big that we have the distribution and presence and magnitude of a Coors..maybe the day will come in a hundred years, because everyone started small. Maybe in a hundred years you’ll be able to get a Sam Adams in all the places you can get a Bud or a Miller or a Coors,” he said.
But will a founding father of the craft beer movement ever take a short cut and sell out to one of the big guys?