Jim and Sam wanted me to share this message with all of you. They're both big fans of BeerAdvocate, have supported us over the decades, and at this point Jason and I consider them good friends. So sending a letter to our community meant a lot us. I was definitely shocked when Sam and I talked about this earlier today, but a merger makes complete sense; as explained by the two of them below. Cheers to their combined success! --- Hello BeerAdvocate Community, We are announcing exciting news today and wanted you to hear it from us first. Boston Beer and Dogfish Head are coming together to create the most dynamic indie craft-beer company of the 21st century. We are bringing together two of America’s pioneering and award-winning independent craft breweries–with the industry’s best collection of brewing talent and a dynamic portfolio of craft and beyond beer brands–to position our company for success in an ever-growing and ever-changing world of brewing. We’ve known each other for decades and have admired what both our teams have been able to accomplish. We’ve dedicated not only our careers, but our lives, to brewing delicious and interesting beers and being active agents for positive change in our communities. Just as important as our shared passion for brewing is our commitment to championing and preserving the independent, American craft movement. Between us, we have more than half a century of brewing experience under our belts. We’ve seen dramatic transformations in our industry, especially in the last decade. There’s been quite a bit of consolidation and an attack on transparency as the global mega brewers started buying regional brewers and marketing them as independent and local. Any company not looking at radical opportunities in a competitive industry will go the way of the typewriter. To be able to compete and continue to grow, we realized that we have to do things differently. Our merger is different. By joining forces we’ll be able to successfully compete while retaining our position and leadership within the indie craft market, alongside our 7500-ish fellow American small brewers. We’re creating a uniquely robust craft beer company, with award-winning brewing talent and a shared culture of innovation. Oh, and we should put this into context. Those larger international beer conglomerates are still more than 50x our size and our combined company’s volume will represent less than 2% of the beer sold in the U.S. We are small compared to these Goliaths but together we are heavy. Together we have championed the values of indie craft brewers for many decades. We have stood shoulder-to-shoulder in many of the efforts that have helped further our industry, from the early days of the Institute for Brewing Studies, the creation of the Brewers Association, the craft beer definition and the Independent Brewer seal, we’ve advocated for indie breweries of all sizes. Dogfish Head has sponsored and promoted those values through events like the Extreme Beer Fest, SAVOR, Hill Climbs, and has raised hundreds of thousands of dollars hosting events for and with craft brewers’ guilds in many states and for our national trade organization the Brewers Association. Boston Beer has opened its warehouse to provide hops to hundreds of brewers who were unable to get them during the hop shortage a decade ago, given loans to over 50 up and coming craft breweries, and provided coaching and counseling to hundreds more through the Brewing the American Dream Program. We will continue to work for the success of the indie craft brewing movement, now with a stronger, unified voice. We will grow faster and stronger together and be among the winners in the long-term with the strongest portfolio of high-end craft and beyond beer brands in the industry–a powerful combination of lagers, IPAs, sours, hard seltzer, spirits, and hard teas–and enhanced distribution strength, top-ranked sales capabilities, and two founders that remain at the helm. Even more important is the fact that we share a deep culture shaped by innovation, an obsession with quality, values that span our communities and our co-workers, and we push boundaries while having fun doing what we love every day. We first had a chance to work closely together back in 2011 when we collaborated and brewed SAVOR Flowers, a one-time release for attendees of the SAVOR Craft Beer and Food Tasting in Washington D.C. Since then, we’ve worked closely as Beer Association Board members, alongside other peers to champion the indie craft community, climbed the Capitol steps in DC to fight for legislation, and over beers at the Great American Beer Festival or at a Brewers Association meeting we’d chat informally about working together in other ways. At the Extreme Beer Fest in Boston earlier this year, those conversations took on a new reality. Boston Beer and Dogfish Head have tested the boundaries of what great beer can be and together with our talented co-workers, the best teams in the business, we will write the next chapter in American brewing. We are creating a company that will continue to push forward to drive the next generation of beer innovation and keep powering us to defy convention. We look forward to what we can accomplish together, and what beers we can brew for you. Cheers & Namaste! Jim Koch & Sam Calagione
I'm excited if this helps Boston Beer Co.! I can imagine it moving them in a more forward direction. As for Dogfish, I'm not sure, but whatever, I trust Sam. It seems to me like Sam wrote this but... Scraaaaatch... "Any company not looking at radical opportunities in a competitive industry will go the way of the typewriter"? I thought DFH was all about "analog" and not digital? Fingers crossed that this won't turn out like the Tabernash / Left Hand merger as I miss Tabernash.
Wow, in another post I said maybe SA should call Brewdog (was joking) and then read this. I am excited for them both, combined this could be very cool. I just hope they listen to their market going forward. I am eager to see what new things come out, cheers and much success.
Never though I'd see DFH be anything other than independent. Not really sure how I feel about this, since SA certainly hasn't seemed to me to be anywhere near DFH levels of craft-ness for years. I mean, I wish them the best, but...wow.
I think both companies can use this opportunity to find new ways to move their brands forward. The industry has gotten so much more competitive, they need to look at ways to retain their advantage. It will be interesting to see where this goes.
Excellent news, this merger makes sense all around and is a smart business decision. Keep innovating and offer the public new exciting beers.
I am curious to see how this plays out. The craft beer world has gotten hyper local IMO and there is a drive to try the next new thing over reliable brews. I also see mid sized regionals are struggling. I know that both breweries make excellent beers, but when was the last time I bought something from DFH? Quite a while ago. SA I will buy at a wedding or bar if its the only craft. I used to get both regularly....like 12 years ago. I hope this works out and think both are very good businessmen, so they must have thia figured out. Im just not sure it gets me back into the fold as a regular purchaser. Good luck guys!!
Kinda late for Aprils Fools' Day, ain't it. Boston Beer Co.'s corporation website has more technical info on the deal. The Boston Beer Company and Dogfish Head Brewery to Merge... Cash and Stock Transaction, Valued at Approximately $300 Million
Surprising, but looking at the big picture I think it will be a beneficial move for both of them, and hopefully the consumers as well. Best wishes to everyone involved!
What I wish they mentioned was news of the 1st new release from them as a team... Would love to see something soon to kick off summer....
I was shocked to hear it... but it does make sense. I'm totally behind this. I love Sam Adams and I love Dogfish Head too. The brands work together and I'm excited to see where this goes. Best of luck with the new merger and cheers!
Absolutely fascinating news. I really hope this gives them the competitive advantage to be successful moving forward. I also hope that DFH continues to create innovative beers.
BBC being a publicly traded company, and DFH a private company. How does a merger work? or is this an acquisition, and added to BBC? Just curious, and wishing for the best outcome for both parties. Cheers
Woah, this is huge news. Now we just gotta figure out if they will now still fit the definition of "craft" or "macro" brewers!
This was my first thought as well. I have a lot of respect for both companies, so I'll be rooting for them. Time will tell I suppose if I'll regularly purchase their beers instead of our local fresh ones at the neighborhood bottle shop, but hopefully they will be a go-to option in "non-craft" bars and restaurants.
So DFH got many many millions. I'm assuming the branding will focus more on SA now huh? Otherwise, why even merge? Are skus going to change? Branding? I don't see how this is beneficial to DFH. SA is a dinosaur. But a dinosaur with millions to spend. They call it a equal merger but what did SA gain here?
I hope this works out well for both brands. Sam Adams, in particular, has played such an important role in my beer-drinking evolution, and I still enjoy Boston Lager whenever I have it. Any word yet what this means for DFH production employees?
It sure will be interesting to see this play out. Money aside, what are they going to call it?? Or are they holding the original Sam Adam's and DFH lables?
They bought what they needed very badly, a younger, more hip image.... SA, in my humble view, is suffering from a tired image. DFH represents a younger, edgier outfit.... Smart move in my eyes.
Weren’t Boston Beer recent sales increases coming more and more from alternate beverages like cider and spiked seltzer? If so, perhaps this an attempt to revive the beer side of the portfolio? I’d be interested in the new branding, if there is any.
This seems like an ‘awkward’ merger to me. I am not seeing the ‘synergy’ here. “Sam Calagione and his family will receive approximately 406,000 shares of Boston Beer stock based on a share price of $314.60. Dogfish Head shareholders will also receive $173 million in cash...” Sam & family will be compensated to the amount of $127.7 M (in stock). The other Dogfish Head shareholders will divvy up $173 M (in cash). The above looks like a buyout. Cheers!
Boston Beer's 2018 Annual Report listed their total barrelage at 4.3 million, and DFH had a press release that they were targeting 300,000 barrels for 2018. So I guess they are still safely under the BA's 6 million threshold for a craft brewer. And I guess it probably would help keep the beer production over 50%, considering it seems that BBC's growth has been in their cider and hard seltzer, not beer.
Two of the greatest minds in our industry who have fought battles on behalf of those who have chose the path of least resistance. I'm guessing lots of breweries will be sleepless tonight thinking of who they can merge with...
JK (@jesskidden), would you know how much 'excess' capacity exists at the Sam Adams brewery near Allentown (or the other brewery)? Would this new merger make sense from a beer production consolidation perspective? Cheers!
As with most mergers, I'm sure a lot of the discussion and rationalization revolved around the idea of "synergy". Something about how the "...whole is greater than the sum of its parts". Hopefully for the employees, this doesn't just mean getting rid of overlapping jobs, but involves leveraging production, distribution and marketing. I was at a beer seminar once, and someone asked how you define the difference between a micro and macro brewery. The answer was that any brewery that produced fewer barrels per year than Boston Beer was considered "micro". This was not a static number because it continually increases. It just took a big jump up....
Aready solved. Still craft by Brewer's Association definition. From my point of view they both brew flavorful beer and are not even close to being one of the big kids brewing Adjunct Lagers.
BBC's Annual Report indicates that only 80% of production is at company owned breweries (seems the other 20% is at City Brewing). Not sure how that divides between beer and other products, but perhaps they are at full capacity in PA and OH?
I'd suggest that the branding will remain the same and that the benefits to DFH are being able to have full US distribution with the BBC sales team including them in the portfolio. In addition they have a management/decision making role in the combined company. The benefits to BBC are that they acquire an existing line of successful IPAs, some successful sours and a growing program of sours as well as a budding barrel aging program. Thus they will be able to concentrate on styles not covered by DFH. So I'd predict we'll see a disappearnce of most if not all IPAs under the BBC label, more sours from DFH brand and the growth of their barrel aging program. BBC a Dinosaur with it's stock selling for over 300 per share up from about 200 over the last year? Edit: Maybe this will also lead to the return of Noble Pils????
Surprising, but not. There will be more consolidation, especially if the economy gets worse (which it will at some point). I think that there is good synergy with the merger. From a personal standpoint, it really won't impact me. I don't drink SA and stopped drinking DFH several years ago. I didn't dislike DFH, but I found just as good offerings within California and DFH didn't standout except for one or two beers. It will be interesting to see how the local vs region transition ends up. As long as you are making good/great beer, you should survive.
I say congratulations to both companies. Jim K. and Sam C. are no dummies; if Sam didn't see the synergies and the ability to keep the Dogfish brand its own, and if Jim didn't see the synergies and didn't see any value in DFH, as it is and for what it is, being part of the Boston Beer stable of brands, then one or both of them would have walked away from the table. I believe this "marriage" will result in an increasing number of quality, innovative products being introduced under both brands (Samuel Adams and Dogfish Head). In an era of buyouts/sellouts/mergers/investments, I believe this one will be a win-win-win for BBC, DFH, and consumers.
