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Publicly Traded Craft Breweries

Discussion in 'Beer Talk' started by Ohsaycanyoubeer, Jan 31, 2013.

  1. Ohsaycanyoubeer

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    I only know of two:

    Boston Beer (SAM) and Craft Brew Alliance (BREW)

    I was thinking about putting my money where my wallet usually is and was hoping there was other options I missed on.
     
    Walkercf likes this.
  2. djaeon

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    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".
     
  3. Ohsaycanyoubeer

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    Yes, kinda, sorta, but it's still important to differnciate between InBev/MolsonCoors and Sam Adams...
     
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  4. cbeer88

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

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    We have held Boston Beer stock for some years now. My thinking was much the same as Ohsaycanyoubeer
     
  6. pweis909

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    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.
     
  7. 5thOhio

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    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.
     
  8. taxman

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    YeahNelsonMandela and djaeon like this.
  9. djaeon

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    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.
     
  10. StarRanger

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    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.
     
  11. dsal89

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    Damn...i dont see Boston Beer going anywhere. Maybe i should buy up a crap load of it lol
     
  12. pweis909

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    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.
     
  13. brewbetter

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    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.
     
  14. 5thOhio

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

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    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
     
  16. 5thOhio

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    So a privately held brewery wouldn't cut costs if profits drop?
     
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  17. pweis909

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    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.
     
  18. rlcoffey

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    That exists for privately held companies too.
     
  19. rlcoffey

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    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.
     
  20. jglowe77

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    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.
     
  21. sidetracked

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    IMHO the ship's sailed on SAM. Lower forecasted earnings growth for the next two years ... priced already higher than the 12-month price target ... higher P/E than industry averages ... influx of alternative "accessible craft" beers for people to purchase. But hell, what do I know.
     
    merc7186 likes this.
  22. WickedSluggy

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    Two massivle different companies of course. DELL has 1.7+ Billion shares outstanding giving it a market cap of about $23B (stock price @ 13.31)
    SAM has a tiny number of shares on the market (8.8M). Thats a market capitalization of just over $1.2B given the current stock price $139.43
     
  23. rlcoffey

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    I agree, and that sort of backs up my point. Even though they are both public, SAM is owned and run much more like a privately held company, primarily because it is possible for one person to have a controlling interest in SAM shares.
     
  24. rlcoffey

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    Privately-held companies have shareholders to answer to also. Maybe not in all cases, but many/most have minority shareholders. And that ultimate end is thus the same.
     
  25. Hanzo

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    I haven't seen a bar that carries BMC that doesn't at least have a SABL and/or SA seasonal tap. Sam Adams is the front line of the battle between "craft" and "macro", I can't see them losing any ground anytime soon but you never know......
     
  26. WickedSluggy

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    It popped 15% on 12/13/12 on on EPS estimate increase. It's a great company and a lot of the analysts still like it, but I'm looking to see a drop when they announce earnings next month. I'm not short SAM, but the stock is very expensive at 31 times earnings on a 10% growth rate.
     
  27. rocdoc1

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    I wish. Come to Carlsbad NM and I'll show you several. In fact I don't know of any place in town that still has a Sam Adams beer on tap.
     
  28. jcb7472

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    I think just about every bar in Florida I've been to has Sam Adams on tap. In fact, at many bars that mainly carry BMC, sometimes Sam Adams is only non-BMC option.
     
  29. nogophers

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    SatlyMalty likes this.
  30. ThePorterSorter

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    It's my opinion that it's much harder to be experimental, trend setting, "hyped" when you're worried more about quality control, consistency, and steady profits. I think a great beer recipie should be profitable, it should blend all these aforementioned things together. For example, Dogfish seems to be incredibly creative yet highly profitable and vehemently maintains private ownership (see the book Sam wrote on owning/running a private brewery). Frankly, I'm always more excited about a new fff or founder's release because they push the limits on styles, or invent new ones, over something from boston beer co, who may not be as inclined to produce a beer which is only palatable to a few geeky beer nerds chatting in online forums. BBC could create an excellent beer (new world tripel was great), but I always wonder what it could have been it they weren't as worried about appealing to such a large market

    That said, I'm curious about which craft breweries have been soaked up (>50% ownership?) by larger breweries... Magic hat, GI, Terrapin
     
  31. jesskidden

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    NAB owns 100% of IBU (Magic Hat - Pyramid - MacTarnahan's). NAB is now owned by Cervecería Costa Rica in which Heineken has some partial ownership.

    Goose Island is 100% AB owned, and AB owns about 1/3 of CBA (Redhook - Widmer - Kona) and 49% of Coastal (Fordham & Old Dominion).

    The percentage that MillerCoors owns of Terrapin is unknown, beyond being under the Brewers Association limit of 25%.

    Mendocino/Saratoga and Butte Creek are owned by the UB Group (India) which is also in turn partially owned by Heineken.
     
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  32. leedorham

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    The reason public trading affects the brewing of beer is because the only ethic publicly traded companies must uphold is to maximize shareholder/stakeholder value within the limits of the law. Privately held companies are held only to the ownership's agenda which can sometimes sacrifice profit/value for fun/passion/eccentricity.

    To ignore this and say going public doesn't change the beer would be naive at best.
     
  33. DanE

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    So for a brewer to make "craft" beer it has to be a privately held brewery....? Nonsense IMO.
     
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  34. rocdoc1

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    But there are other ways to maximize profits than just cutting corners. Brew the best damn beer in the world an charge more for it. If you buy a craft brewery leave the beer alone and continue to brew the best possible beer, as close to if not identical to the original and you won't lose your customers.
    Having said that the easiest way to maximize short term profits is to cut corners, but eventually that will cost you customers.
     
    hopfenunmaltz likes this.
  35. Errto

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    This is true, but securities law gives the company's management enormous flexibility about how to do that. They are entirely free within the limits of the law to decide how they want to go about becoming profitable, and on what time scale. Watching Jim Cramer or whatever (just picking on him because he's so visible) you'd think "fiduciary duty" means you have to increase revenues every quarter or else your shareholders can sue you, but it's just not true.

    Also, as mentioned above, just because a company is publicly listed doesn't mean all or even most of its shares are on the open market.
     
  36. FunkyMacGroovin

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    I've found this to be true on the east coast, but it is far from the case out west. Off the top of my head I can name maybe 3 bars I've been to in the past few months that had a Sam tap handle.
     
  37. Hanzo

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    How about Sierra Nevada? I would assume even though they are smaller, they take the gateway craft baton on the west coast.
     
  38. FunkyMacGroovin

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    Indeed this is true, but they are neither Sam Adams, nor are they publicly traded.
     
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  39. teal

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    I'd judge BBC based upon the content of the bottle, not the return in the portfolio.

    The only question for me when deciding what is and isn't craft is the PRODUCT. Is that specific beer a craft beer? Yes or no. Does that brewery only make beers that could be considered craft or of a quality significantly above your typical adjunct light lager?

    There's a ton of beer out there that's simply not very good but because the ownership is private and they have neat labels - does that make them craft? Hell no.

    Craft is more than ownership or location - it's the end result we should be worried about. A craft brewery determines their standard level of product/flavor/color/style et cetera and how they get there, doesn't matter to me.

    If a public company produces an excellent product, well made, tasty and consistent - does it matter if they cut costs to do so? Nope.

    Show me a brewery that doesn't cut costs when they can so long as they maintain their standards of product and I'll show you one that that will be auctioning off their brewhouse shortly.

    They ALL cut costs as much as they can to provide a return to their stakeholders. It's HOW FAR one cuts and just where they draw the line on their product's standard for style and flavor or how far one compromises their vision that determines where they end up in the ledger of brewers. BMC wanna be or a craft brewery.
     
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  40. Hanzo

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    Well yeah, this was kind of an off topic thought I had. You guys out west have your Sam Adams equivalent distribution wise.
     
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