Boston Beer Company & Dogfish Head Brewery Are Merging

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

  1. donspublic

    donspublic Poo-Bah (1,782) Aug 4, 2014 Texas
    Society Trader

    We see this comparison a lot, but I don't think it is apples to apples. Some of thes wineries are boutique type wineries where they buy the grapes and have another vineyard produce the wine, bottle it, then put it into a distribution chain. They may have no onsite presence and expend little effort to get the product to the market. This is done once a year and this probably isn't their only source of income. I think most breweries are different in the fact that you are having to constantly produce product and get it out the door or in your taproom because most beers produced have such a short shelf life. Where most wine can withstand a few years on the shelf, a majority of beer cannot.
     
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  2. kbenson

    kbenson Initiate (117) Aug 15, 2012 Texas

    If this means more DFH showing up in airports, hotels, sporting/music venues and other places that are generally clueless about craft, then I'm all for it. If it even modestly helps BBC compete with the big guys for shelf space in the grocery/liquor stores then I'm all for it.

    Having said that, as big as I perceive Boston Beer/Sam Adams to be, I was very much reminded of how powerless they truly are when I was laying over at the airport in Atlanta and discovered they had a branded "Sam Adams Brew Pub", but then went on to discover that they only had one Boston Beer beer on tap and otherwise had a bunch of B/M/C beers available (due to the distribution contract entered into with the airport).
     
  3. CheapHysterics

    CheapHysterics Aspirant (228) Apr 1, 2009 Pennsylvania

    Appears to be the price per quart.
     
  4. BrewAskew

    BrewAskew Poo-Bah (1,702) Feb 28, 2002 Oklahoma

    Boston Beer Company converted millions of Big Bland Beer Drinkers to better beer in the 90's. Flash forward 25 years later...This new collaboration will do more of the same. I look forward to tasting what they do.
     
  5. officerbill

    officerbill Disciple (347) Feb 9, 2019 New York
    Society

    Picked up a single Monday afternoon; bottled on 12/14/17 (sigh :confused:). No plans for Wednesday evening so I'll give my pre-aged 120 Minute a try tomorrow night.
     
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  6. AlcahueteJ

    AlcahueteJ Meyvn (1,087) Dec 4, 2004 Massachusetts

    Good thing it's not, "120 Minutes in New England".
     
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  7. nc41

    nc41 Poo-Bah (1,938) Sep 25, 2008 North Carolina
    Trader

    Just out of curiosity, I’m a Red Zin fan and prices go all over the price. I see some as low as $4.99 for a CA Zin from wherever, how in the hell can they stay open as a winery selling wine that cheaply? TW sells it for $5, the winery probably sells it for $1.50 or so, then to a distributor. It can’t possibly be profitable enough to deal with that. There’s breweries and wineries popping up all over the place around here up into the Danville area a bit north in Va. How they survive I haven’t a clue, same with these breweries popping up, most produce ok beer, but it still is what it is. I think we’re well past flush right now.
     
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  8. IPAExpert69

    IPAExpert69 Aspirant (211) Aug 2, 2017 Pennsylvania
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    I'm assuming the definitions of "craft beer" and "independent" beer will be changing to include Boston Beer Company even after this acquisition :grin:
     
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  9. IPAExpert69

    IPAExpert69 Aspirant (211) Aug 2, 2017 Pennsylvania
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    The signs in my room are worthless now :joy:
     
  10. drtth

    drtth Poo-Bah (4,006) Nov 25, 2007 Pennsylvania

    no need to change, stilll included
     
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  11. jesskidden

    jesskidden Poo-Bah (1,850) Aug 10, 2005 New Jersey
    Society Trader

    Why? The B.A. listed BBC's beer barrelage at 2 million (2017) and DFH is said to be getting close to 300k bbl this year. Together that is less than half of the 6 million bbl. limit (it's even less than #1 D. G. Yuengling & Sons). Just because they've merged with DFH, that doesn't change their "Independent" status, and DFH will disappear off the B.A.'s list of "Craft Brewers".
     
  12. donspublic

    donspublic Poo-Bah (1,782) Aug 4, 2014 Texas
    Society Trader

    You are probably talking about Canyon Oak. I am not sure who they are owned by, but they are probably buying grapes on the market that no one else wants and fermenting and blending to achieve a somewhat similar wine vintage to vintage. I have never had Canyon Oak, so can't comment on quality. Yellow Tail is another winery that has dialed in their profiles and does a pretty good job on keeping the product similar release to release. I have never drank their low end product ($5 a bottle) but their upper tier are pretty good wines, consistent being the word
     
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  13. Wrigfen

    Wrigfen Disciple (393) Feb 23, 2013 South Carolina
    Trader

    I was thinking exactly the same thing. I am a big fan of DFH but quite frankly I do not think of SA as a Craft Brewery.
    I think it could be a positive in helping DFH distribution and SA’s name among true craft beer lovers.
    If they let DFH do what they do best and only increase their presence this could be a real good thing.
    I am surprised though as I always thought SA would remain independent.
     
  14. jesskidden

    jesskidden Poo-Bah (1,850) Aug 10, 2005 New Jersey
    Society Trader

    How does merging with DFH end Boston Beer Co.'s independence?
     
  15. nc41

    nc41 Poo-Bah (1,938) Sep 25, 2008 North Carolina
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    I think your right I believe it was Canyon Oak. It wasn’t a bad wine by any means, but certainly not near equal to the Oak Ridge I prefer. At that pricing point it just seems impossible that you can make enough money to be worth the trouble. Wines one of those products that price doesn’t always tell the story or the quality justify its cost.
     
  16. donspublic

    donspublic Poo-Bah (1,782) Aug 4, 2014 Texas
    Society Trader

    Different goals, these lower ends are just trying to create a consistent wine at a cheap price. They have a process down and the technology/science to create a consistent product each time. None (that I know of) are seeing any oak, these are pure stainless wines. You higher end wines don't care about consistency as much as getting the best flavor/profile out of that years crop. Depending on the region the are constrained as to where they can get their grapes from (primer on label reading and some restrictions). This is pretty much the quantity vs quality argument. Happens in beer too. Go into Total Wine and you will find 4 packs of pounders from Germany for $4 or $5, 6 pack of Bush pounders for $4.5.
     
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  17. jayrutgers

    jayrutgers Aspirant (201) Oct 29, 2011 New Jersey

    It's been six days and still no announcement of a 60 Minute Boston Lager collab get it together @SamCalagione
     
  18. nc41

    nc41 Poo-Bah (1,938) Sep 25, 2008 North Carolina
    Trader

    Thanks for the info. I suppose there isn’t much competition for the grapes that Canyon Oaks buys up, and if you buy enough you can make enough wines to be worth the trouble. And they don’t stress their vineyard, so I suppose they buy from a co-op. But for $5 you can do much worse.
     
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  19. jasonmason

    jasonmason Initiate (179) Oct 6, 2004 California


    Well, it depends. If it's truly a "merger of equals", then that by definition negates the idea of independence. It would take the Brewers Association a lot of creative wordsmithing to somehow call a co-captained dual-brewery alliance independent. Not that I'd put it past them, but still.

    What I think you mean (and the way I see it) is that this does nothing for SA independence, since they're the ones in the drivers seat. In that scenario, however, it does directly affect the idea of DFH independence.
     
  20. stevepat

    stevepat Crusader (772) Mar 12, 2013 California
    Trader

    wine out here is crazy. While all the imagery put out is cozy vineyards tucked up in picturesque hills the reality is more like hundreds of acre chunks right along the freeway. Those are the kind of grapes that end up in 5$ wine, chemically fertilized and dowsed in whatever chemical will kill most of the local grape pests. There are areas where the vineyards remind me of corn farms in the midwest. Truly commodity production, touched only by machines and migrant labor. I'd imagine there's often some kind of property tax benefit in it as well.

    As to the topic at hand. I've predicted before and will predict again that we will see a lot more of this type of thing. I will be surprised if this isn't the last acquisition (maybe they will call them all mergers?) we see from SA. They obviously are very skilled in the art of selling lots of beer and I'm sure they are acutely aware of the market segments that they can't seem to access. I hope this works out for everyone involved, if we are moving to a world where SA could be the new macro then I would say that's a win for american beer
     
  21. jesskidden

    jesskidden Poo-Bah (1,850) Aug 10, 2005 New Jersey
    Society Trader

    Many of the B.A. defined "craft brewers" are mergers or the result of buyouts, etc, including some of the largest:

    5 Duvel Moortgat (Firestone Walker, Ommegang, Boulevard)
    6 Gambrinus (Spoetzl, Trumer, [previously] Bridgeport)
    8 CANarchy (Oscar Blues, Cigar City, etc)
    11 Artisanal Brewing Ventures (Victory, Southern Tier, Sixpoint)

    Since their "Independent" clause specially says:
    Like the companies listed above, Dogfish Head will drop off the list and their barrelage will be listed under "Boston Beer Co." (since there doesn't seem to a name change involved with the merger).
     
    #341 jesskidden, May 16, 2019
    Last edited: May 16, 2019
  22. IPAExpert69

    IPAExpert69 Aspirant (211) Aug 2, 2017 Pennsylvania
    Trader

    I was just joking about how B.A will adjust their definitions to keep the big boys in.
     
  23. CB_Michigan

    CB_Michigan Disciple (367) Sep 4, 2014 Illinois
    Society

    If it's $5 on the shelf, the winery is probably getting maybe $2.50 or $2.75 per bottle wholesale. These are all very rough cost estimates, so take them with a grain of salt, but based on what I've heard, I don't think they're too far off.
    Bottle: 0.70
    Label: 0.08
    Cork: 0.07
    Foil: 0.05
    That's 90 cents, leaving 1.60 for grapes, additives (extracts, concentrates, sugars, enzymes) to improve taste/color/consistency, overhead, and profit. And that's assuming that they're actually purchasing grapes and not bulk juice (might be both). These wines tend to have very thin margins, so they make it up in volume. There's a good chance the winery actually looks something like this:
    [​IMG]
     
  24. jasonmason

    jasonmason Initiate (179) Oct 6, 2004 California

    I get your point. Where I was heading was more that the idea of an "Independent" DFH is now disingenuous, because they're not solely in control of their operations. They may be part of a BA-defined "Independent" brewing entity, but DFH itself is no longer independent anymore than, say, Jeep is of Chrysler.

    In the end it's just all semantics...except for the fact that DFH is (or soon will be) owned by SA.
     
  25. nc41

    nc41 Poo-Bah (1,938) Sep 25, 2008 North Carolina
    Trader

    Damn, never would have guessed this looking at this picture, but it certainly explains why it’s worth the trouble to make $5 wines.
     
    #345 nc41, May 16, 2019
    Last edited: May 16, 2019
  26. MNAle

    MNAle Poo-Bah (1,562) Sep 6, 2011 Minnesota
    Society

    Or, Chrysler is of Fiat...
     
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  27. MNAle

    MNAle Poo-Bah (1,562) Sep 6, 2011 Minnesota
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    Clearly, the BA's definition of "Independent" is not exactly the same as you would find in a dictionary. A brewery can be owned by just about any ol' financial entity, even a multi-national conglomerate, so long as the owner is not in the alcoholic beverage business, and the brewer will still be "Independent" according to the BA.
     
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  28. officerbill

    officerbill Disciple (347) Feb 9, 2019 New York
    Society

    Ok, I tried my 17 month old bottle. Pours almost the color of a märzen, thick molasses/candy flavor with an odd slightly bitter aftertaste, and an unpleasant coating on my tongue. Not a pleasant tasting beer.
    I'm not going to review it because, TBH, I don't know if this is how it's supposed to taste.
    This beer might be nectar fresh or if aged under known, controlled conditions. I just know that I couldn't finish it, poured half down the drain, and needed a Dirty Bastard to rinse my mouth.
     
  29. JackHorzempa

    JackHorzempa Poo-Bah (4,152) Dec 15, 2005 Pennsylvania
    Society

    I can't wait to read the replies to this comment!!

    Cheers!

    :popcorn:
     
  30. officerbill

    officerbill Disciple (347) Feb 9, 2019 New York
    Society

    Uhm, yeah. Maybe I should have clarified that I was referring to the ale.:confused:
     
  31. MNAle

    MNAle Poo-Bah (1,562) Sep 6, 2011 Minnesota
    Society

    Glad you clarified that. I was thinking, maybe, Ratso Rizzo. :grimacing:
     
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  32. DanielAron

    DanielAron Devotee (435) May 15, 2005 Illinois
    Society

    Breweries do this too. It's called contract brewing. Pretty common.
     
  33. gr8ful

    gr8ful Initiate (89) Aug 17, 2014 Texas

    You
    You're right! I can't even remember the last time I bought SA....which is too bad I guess. It is a solid, consistent beer every time. I still get DFH 60 and 90 minute from time to time.
    I now live in Texas and there is a prolonged mini-boom in solid regional and local breweries, so I generally buy Texas beer...never thought I'd write that, but no regrets. Lots of good stuff down here.
     
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  34. MNAle

    MNAle Poo-Bah (1,562) Sep 6, 2011 Minnesota
    Society

    A couple of business-side quotes from that article:

     
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  35. Giantspace

    Giantspace Crusader (721) Dec 22, 2011 Pennsylvania

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  36. JackHorzempa

    JackHorzempa Poo-Bah (4,152) Dec 15, 2005 Pennsylvania
    Society

    A few snippets from the article that I found interesting:

    Logistics

    “I know with the Dogfish Head beers, we’re going to be able to put them into our logistics system, which means more frequent deliveries to the wholesalers, which means smaller inventories and fresher beer.”

    Innovation

    “Sam’s brewing experience is as one of the most respected craft brewers, one of the most innovative.”

    And:

    “But Sam’s idea, if it develops, the idea he threw at me was like “Wow, that’s super creative.’’



    It reads that the ‘new’ BBC will be able to improve the delivery of Dogfish Head beers to market. If it does occur as stated with “more frequent deliveries to the wholesalers, which means smaller inventories and fresher beer”, then this is indeed a plus for consumers of Dogfish Head beers.

    Sam Calagione is indeed an innovative fellow. Many of his beer ideas are a little too wacky for me – he seems to be of a culinary bent and likes to find and use new ingredients to produce new products. It will be intriguing if some of this aspect finds its way into Sam Adams branded beers.

    Cheers!
     
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  37. stevepat

    stevepat Crusader (772) Mar 12, 2013 California
    Trader

    Q: Who brought it up?

    A: That’s a good question. I think it was Sam. He has a private equity investor that was ready to get out.

    That seems like the smoking gun in this mystery right there. A presumably large investor wanted out and dfh needed the capital to buy them out.
     
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  38. jesskidden

    jesskidden Poo-Bah (1,850) Aug 10, 2005 New Jersey
    Society Trader

    That was mentioned in the BREWBOUND article that was published the day of the announcement and the start of this thread (and likely discussed/linked in a previous page in this thread):
     
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  39. MNAle

    MNAle Poo-Bah (1,562) Sep 6, 2011 Minnesota
    Society

    Agree, but this quote from the interview makes it seem more like a cause than an effect.
     
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