Boston Beer Company & Dogfish Head Brewery Are Merging

Discussion in 'Beer News & Releases' started by Todd, May 9, 2019.

  1. VoodooBear

    VoodooBear Zealot (579) Aug 25, 2012 Puerto Rico
    Trader

    I don't think that's the strategy. What I would like to see, and maybe that's where Jim's going, is for Boston Beer to make most of their money on Twisted Tea, Angry Orchard, DFH, etc. which would allow them to refocus the Samuel Adams brand into stuff he wants to brew and not chase trends.

    Neither Boston Beer nor DFH are ABI. We can't apply macro logic to this merger. And if that's what ends up happening, I think we'll all be disappointed.

    They've been doing that for a while now, which is why it's stayed afloat despite declining beer overall and the recent-ish hyper-local beer boom. If all they're doing here is adding DFH without making any changes to keep BBC from sinking that'll be a shame and a wasted opportunity. I don't think Jim and Sam did this for such simple reasons. Misguided optimism on my part? Maybe... I hope not, though.
     
    #161 VoodooBear, May 10, 2019
    Last edited: May 10, 2019
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  2. BayAreaJoe

    BayAreaJoe Champion (866) Nov 23, 2017 California
    Society Trader

    What is the $23.99 price to the left about?
     
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  3. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
    Society

    I think the second sentence above answers your question of the first sentence.

    Cheers!
     
  4. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
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    What do you think is the 'plan' for this new, expanded Boston Beer Company?

    Cheers!
     
  5. Claude-Irishman

    Claude-Irishman Defender (678) Jun 4, 2015 New Jersey
    Society

    You are incorrect on both points. Dogfish started selling hard booze about 4 years ago, Boston beer has sold over 6 million barrels in a year which makes them a macro brewer.At one point it was 2 million a year limit.
     
  6. VoodooBear

    VoodooBear Zealot (579) Aug 25, 2012 Puerto Rico
    Trader

     
  7. jayrutgers

    jayrutgers Initiate (192) Oct 29, 2011 New Jersey

    To the best of my knowledge BBC has never reached 6 millions barrels. 4 million yes, 6, no.

    And no, Dogfish was distilling and selling their own hard liquors as early as 2002.

    Here's the link for their trademark application for Blue Hen Vodka from 2004:

    https://trademarks.justia.com/766/17/blue-hen-76617327.html
     
  8. jesskidden

    jesskidden Poo-Bah (1,766) Aug 10, 2005 New Jersey
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    My guess - it's the price per quart - so you can compare it to the prices of the others beers.

    $36 ÷ 48 oz. = 75¢ oz.
    75¢ X 32 = $24
     
  9. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
    Society

    But the new, expanded Boston Beer Company is now comprised of multiple products:
    • The non-beer beverages of the 'old' Boston Beer Co.
    • Sam Adams beers
    • Dogfish Head beers
    Is there an over-arching plan for the above? How does Boston Beer Company + Dogfish Head equate to a new company that is greater than the sum of the parts listed above?

    Cheers!
     
  10. Crusader

    Crusader Aspirant (273) Feb 4, 2011 Sweden

    I don't know if the little guy being pushed aside is a good description of the current market trends. I'd call it a buyer's (consumer's) market, and the buyer wants variety and novelty. Provided by new and small breweries.
    [​IMG]
     
  11. drtth

    drtth Poo-Bah (3,851) Nov 25, 2007 Pennsylvania

    Yep, it happen that that way and has. It also can happen along the lines of the brief overview I gave earlier of Duvel Moortgat and their M&A. Ommegang and its employees seem to be thriving. Boulevard and its employees seem to be thriving. Firestone-Walker and its employees seem to be thriving. They all seem to be getting along well with each other, etc.

    As you suggest, it will be interesting to see how this all plays out since it's a bit too early to predict with the small amount of concrete information we have access to.
     
    #171 drtth, May 10, 2019
    Last edited: May 10, 2019
  12. VoxRationis

    VoxRationis Poo-Bah (1,549) Dec 11, 2016 New York
    Society Trader

    Craft beer is an insanely competitive market. Dogfish Head was a mature enough company that for the brand to grow and survive, it needed to come public itself, sell to a larger entity which was public or was able to go public, or begin to wither and die. They make great beer, but so do a lot of other small shops. Selling to a publicly traded company long dedicated to making craft beer seems to have been the best choice. BBC is much more likely to preserve the craft culture and brands at DFH than almost any other buyer one could imagine.
     
  13. jesskidden

    jesskidden Poo-Bah (1,766) Aug 10, 2005 New Jersey
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    Yeah, BBC's peak year's barrelage (beer + FMBs, cider, seltzer, etc) was 2015 with 4,241,000 bbl.

    The Brewers Association, which only counts their "Beer" barrelage,listed BBC's 2015's barrelage at 2,525,000 bbl.
     
  14. UncleJimbo

    UncleJimbo Poo-Bah (3,728) Sep 11, 2002 Massachusetts
    Moderator Society Trader Fest Crew

    The benefit I see for me, as a craft beer consumer, is that I will almost certainly now see more DFH beers on-tap in bars in my area (the greater Boston area), where BBC (Sam Adams) beers are found on-tap everywhere.

    As far as innovation, I would argue that some of the best beers in the world are made by breweries not known for innovation. And I would argue that both BBC and DFH have been innovative enough over the years.
     
  15. drtth

    drtth Poo-Bah (3,851) Nov 25, 2007 Pennsylvania

    Agreed, I always have a good chuckle when I hear someone say these breweries aren't/haven't been innovative.
     
  16. jayrutgers

    jayrutgers Initiate (192) Oct 29, 2011 New Jersey

    I forgot what innovative means these days, can someone help?

    It means hazy IPAs with lactose right?
     
  17. WormGod

    WormGod Initiate (170) Jun 30, 2016 New York

    I think you misunderstand. I never said they haven't been innovative. I am saying they are no longer innovative. I have not seen a new and interesting beer from either of them in years. Much of their current portfolio is still very good, but it does not mean that it is innovative. One example - WWS is still an excellent beer, and I still love it, but that alone does not make it innovative.
     
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  18. drtth

    drtth Poo-Bah (3,851) Nov 25, 2007 Pennsylvania

    So SeaQuench isn't new and an innovation? Sam '76 isn't new enough for you? (Remember innovation doesn't require that you personally find it interesting, just that it be new.)
     
    #178 drtth, May 10, 2019
    Last edited: May 10, 2019
  19. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
    Society

    Yeah, that is predominantly it but I personally would also add pastry stouts as well.

    Cheers!
     
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  20. officerbill

    officerbill Aspirant (227) Feb 9, 2019 New York
    Society Trader

    It is?
    My grocery stocked these on Wednesday. I've never seen it on a shelf and they're the only place around that carries it and it's priced about $10 more than any other 4 pack in the store.
    I happened to have this photo on my phone; otherwise I would have simply mentioned that, around here Sam Adams is considered to be reasonably priced while Dogfish Head is priced as a ” premium” beer and doesn't move nearly as quickly.
     
  21. jayrutgers

    jayrutgers Initiate (192) Oct 29, 2011 New Jersey

    Innovation, like finding a way to add body to a beer without adding calories?

    They also used their own science lab to replicate the exact sea salt found in the Chesapeake Bay.

    Just come out and say it.

    "Dogfish is too big and therefore I don't find them interesting because stuff on store shelves isn't interesting compared to the same lactose IPA I wait two hours in line for"
     
  22. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
    Society

    I suppose it comes down the the definition of "new"?

    Seaquench was introduced in August 2016 so that beer is approaching 3 years of age. I suspect that many BAs would not view this as being "new".

    Cheers!
     
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  23. officerbill

    officerbill Aspirant (227) Feb 9, 2019 New York
    Society Trader

    Unit price per quart
     
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  24. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
    Society

    That is also the situation in my area: Dogfish Head is pricier than comparable Sam Adams products. I personally have stopped buying Dogfish Head products since they are priced too high (for me).

    Cheers!
     
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  25. drtth

    drtth Poo-Bah (3,851) Nov 25, 2007 Pennsylvania

    Yep, depends on the defintion of new. If that's too old, substitute Slightly Mighty or SuperEIGHT.
     
  26. jayrutgers

    jayrutgers Initiate (192) Oct 29, 2011 New Jersey

    Small brewery that makes a different beer each week: Innovative.

    Big brewery that has a core lineup it ships nationwide but also has a small brewpub that makes different beers each week: Not innovative.

    Because reasons.
     
  27. AZBeerDude72

    AZBeerDude72 Poo-Bah (1,634) Jun 10, 2016 Arizona
    Society Trader

    What is the price? 23.99 or 35.99? Both are cheaper than I have seen, and if the price is $23.99 that is amazing and I would be buying. They go for 10 bucks a bottle here in AZ and have been that way for as long as I can recall.

    Cheers
     
  28. jmdrpi

    jmdrpi Poo-Bah (6,014) Dec 11, 2008 Pennsylvania
    Society

    @jesskidden already basically addressed this above.

    Jim Koch (his title is Chairman, the CEO is David Burwick) personally selects 4 of the 7 members of the Board of Directors (currently he and his wife are 2 of those 4). So effectively he has total control of the company - the public shareholders can't outvote him, and if the other 2 Class B Directors (perhaps Sam Calagione will take of one those spots?) do anything he doesn't agree with, he can replace them.

    From the 2019 Annual Stockholder meeting notice:
    Notice the lack of a plural on Class B Stockholder.

     
    #188 jmdrpi, May 10, 2019
    Last edited: May 10, 2019
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  29. KarlHungus

    KarlHungus Poo-Bah (3,075) Feb 19, 2005 Minnesota

    I counted to uses of the word 'buyout' in that announcement about a buyout.
     
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  30. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
    Society

    You have a point here. It seems that quite a few of the small, local breweries have a strategy for producing new brands on a rapid basis (some weekly and others maybe more like monthly). Distributing breweries can't follow this specific strategy, the best they can do is release seasonals or infrequent one-off releases.

    Cheers!
     
  31. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
    Society

    So, how does the new, expanded Boston Beer Company compete here?

    Cheers!
     
  32. WormGod

    WormGod Initiate (170) Jun 30, 2016 New York

    If DF and/or BBC are making different beers each week in their brewpubs, that is great (and probably innovative). But if they don't ship those beers to my area (and I understand the costs and logistics of why they can't/don't/won't), then that does not help me as a consumer. I'm stuck with the same choices from them that I have had for years. Perhaps innovative was the wrong word to use.

    P.S. I refuse to stand in line for beers.
     
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  33. drtth

    drtth Poo-Bah (3,851) Nov 25, 2007 Pennsylvania

    Many folks tend to either forget or don't know that before becoming a brewer Koch was a business consultant with an MBA from Harvard business school. He clearly knew how to set up his own corporate structure, etc. so he retained final control while still going public.
     
    #193 drtth, May 10, 2019
    Last edited: May 10, 2019
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  34. OldBrewer

    OldBrewer Aspirant (270) Jan 13, 2016 Ontario (Canada)

    Actually the price is not unrealistic. Dogfish Head 120 minute IPA has 4 times the amount of alcohol as a regular IPA. At $36 for 4 bottles, each bottle is $9. If we then divide $9 by 4, we get $2.25 per bottle (relative cost comparing alcohol amount only). And that is a quality beer that took a lot of time, effort and ingredients to brew. I would say it's a bargain. And that's at $36! If $23.99 is the discounted price, then you have an incredible bargain at $1.50 a bottle (comparatively by alcohol level alone).
     
  35. ESHBG

    ESHBG Aspirant (247) Jul 30, 2011 Pennsylvania

    It's an interesting concept and I know not necessarily apples to apples but you see these craft beer companies getting bigger and not much happening with the prices, I figured this would be a little more aggressive to really take a bite out of the competition.
     
  36. drtth

    drtth Poo-Bah (3,851) Nov 25, 2007 Pennsylvania

    A "just in case you don't already know" FYI. That has more to do with your local distributors and retailers than the brewery. I'd bet dollars to donuts that if you went to a local retailer and ordered a full case of, say, SeaQuench. They could get it for you. Whether you could get them to bring in a whole case to sell you only a single can or single six pack is a harder call.

    Used to do it all the time back in the days when in PA we had to buy most of our beer by the case. I had a retailer who could and would track down and get me a case of any beer that could be had in PA.
     
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  37. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
    Society

    I suppose it could be based upon who they view as competition? While the beers from small. local breweries have the benefit of being fresh it seems to be 'popular' to package in 4-packs of 16 ounce cans at non-cheap prices. Maybe the distributing breweries do not think they need to be inexpensive to be competitive?

    Also, in our area other larger, distributing breweries such as Sierra Nevada are not priced cheaply (e.g., a 6-pack of Sierraveza for $10.99) so just price in the ballpark?

    Cheers
     
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  38. JackHorzempa

    JackHorzempa Poo-Bah (4,007) Dec 15, 2005 Pennsylvania
    Society

    FWIW the manager of a local Retail Beer Distributor would special order beer for me (e.g., Tipopils, St. Georgenbrau) and he was happy to just sell me a 4/6 pack. I personally stopped requesting this because I would see the remainder of the case collecting dust on his shelf (i.e., other customers refused to buy these beers, likely due to the high cost?).

    Cheers!
     
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  39. KarlHungus

    KarlHungus Poo-Bah (3,075) Feb 19, 2005 Minnesota

    I meant no uses of 'buyout'.
     
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  40. drtth

    drtth Poo-Bah (3,851) Nov 25, 2007 Pennsylvania

    Same here. Didn't want someone willing to go out of his way to help me find something he didn't have to then be stuck with something he couldn't easily sell. One time when I went in there he had a case of Duvel four packs with free glassware that someone had ordered and then didn't buy. I was tempted to buy that case to use the 4 packs as gifts....
     
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