Publicly Traded Craft Breweries

Damn! SAM is at $141+ a share? Who knew? They're doing pretty good! But IMO, when a beer company goes public, it's no longer "craft".

 

You can capitalize on the Bourbon County craziness with BUD... I kid, I kid... kind of...

 

We have held Boston Beer stock for some years now. My thinking was much the same as Ohsaycanyoubeer

 

Every time someone attempts to define craft beer, it excludes some brewer that many "craft beer advocates" feel belongs. The term increasingly feels snobbish to me. You are entitled to your opinion, but I can't fathom how public offering of stock interacts with the craft of making beer.

 

Either a brewery makes good beer or it doesn't. Period. But as we have seen in other posts, some apparently can't let go of their politics even when enjoying a beer.

 

I remember when Sam Adams went public. Was able to buy 33 shares for $15 each. The stock certificate is pretty cool.
http://www.nytimes.com/1996/11/24/business/boston-beer-the-sad-fall-of-an-ipo-open-to-all.html

 

Interchange "craft" with any term you like. I didn't say I don't still drink it and enjoy most of it. And I never said being a public company was a bad thing. And I'm no economist, but I can guarantee the there are different business practices associated with running a publicly traded company than that of a private company. Whether you're making beer or any other product. I like Sam Adams, and if I had the money, I'd buy stock in them.

 

My wife got me one share of Boston Beer stock a few years ago through oneshare.com - http://www.oneshare.com/stock/samueladams. The framed stock certificate looks nice above my computer and I do get their annual reports and sometimes a goody like a bottle koosie.

They also have shares of Craft Brewers Alliance for sale plus AB and Molson Coors too if you really want to fill out the set.

 

Damn...i dont see Boston Beer going anywhere. Maybe i should buy up a crap load of it lol

 

I'm sure you are right about there being a difference in business practices. I just don't see it necessarily affecting the brewing process. But I don't think "privately owned" should be the acid test for "craft." I guess it boils down to what about beer we should be advocating: attributes of the beer or attributes of the business or some sort of holistic measure of both. For many of us, it probably is some measure of both, but the criteria are nebulous and personal.

 

You know about the fiduciary duty to return shareholder value, right?

I find the people who are offended when their personal favorite brewery is excluded from the craft umbrella need to just gain a little perspective. Just because GI isn't craft doesn't mean you have to love them any less.

 

Care to give us an example or two of how those differences in business practices would affect the brewing of beer?

 

Then you know nothing about dividends and how they compel investors. Not saying that BBC had made successions in their raw goods, but cutting costs and materials is a common reaction to lowers than expected earnings

 

So a privately held brewery wouldn't cut costs if profits drop?

 

You are suggesting that I am finanically naive and I'm sure I am on many points, but maybe not in the way you suggest. I accept the concept of fiduciary responsibility and the pressure to cut costs to raise profit. I can see how by extension there would be a tendency to put a product out that minimizes costs and maximizes earnings by selling the consumer the product with the least quality that they are willing to consume. However, I don't think this has to be the only way corporations are run, and I don't think this model applies to BBC, and apparently you don't (see bold text). So let's not kick them out of the club yet just we suspect they will inevitably sell out.

 

That exists for privately held companies too.

 

One thing that should be considered with Sam Adams is that they have two types of shares. I forget which way they label them and Im not going to look it up, but lets call them A and B.

Koch owns 100% of the "A" shares and the "B" shares are the ones publicly traded. The ones he owns gives him like 60% ownership (its been a while since I looked at this, so that is ballpark). That is a big difference than with most publicly traded companies where the founder doesnt have controlling interest. For example, I remember back in the late 90s, Michael Dell was down below 15% ownership of his company. And it was getting smaller all the time, as he diversified out of Dell stock.

 

A private craft brewery makes good to beer because people want to buy it. A public craft brewery makes good beer because people want to buy it, which serves its ultimate end, which is to increase shareholder wealth. There are different motivations at play. Sam Adams has pressure to make more mainstream-acceptable beers because its shareholders want their shares to increase in value. A private craft brewery can brew whatever kind of beer it wants and rely on the adventurousness of the craft community to keep it in business.