On Sunday, May 27th, Jim Koch’s turned 69, and as has become tradition, this post will recognize Boston Beers this week. More than any other in the industry this year, Boston Beers was been on a true roller coaster ride. In just the last 12 months, Boston has made a complete turnaround, going from trending negatively to once again trending in the positive direction. We have seen this story before.
Regardless of how one defines the Boston Beer Company, it is fair to say that Jim has transformed this organization from a craft brewery to one now known as a specialty drink company. Some industry analysts are reluctant to endorse SAM even though their first quarter depletions were up +8% versus last year’s depletions which were down -6%.
The product mix of Boston Beers, led by Twisted Tea, Angry Orchard and Truly Spiked & Sparkling are currently 70% of Boston’s portfolio. This has RBC’s Nik Modi to rename Boston Beers to “The Boston Tea Company.” This makes sense, given their product mix. The continued success of Angry Orchard’s Rose will simply move that percentage more towards the Tea Company label.
Boston’s success with these products has caught the attention of others as the competition from similar brands, including Spiked Arnold Palmer, Smirnoff Spiked Sparkling Water, White Claw, and Spiked Seltzer, continues to grow. Even Small Town Brewery is creating line extensions of NYFRB to compete with SAM in the cider and tea segments.
Since 2000, Boston has introduced a number of new products, including the above, plus the addition of Sam Adams Light and Rebel IPA. To some degree, all have been successful and have played a key role in SAM’s portfolio.
At the writing of this post, SAM shares were up +27%, certainly a welcome number for all investors and employees. RBC is forecasting a growth trend of +2% to +4% for Boston in 2018, which if they achieved, would be remarkable in a today’s declining industry.
Even with 2018’s early success, rumors abound regarding a potential sellout of Boston Beers. As with many other key senior management positions at SAM which have been changed in recent years, it took Jim and Boston Beers the better part of a year to find a new CEO.
Next year will be the 35th anniversary of the founding of Boston Beers and Jim Koch’s 70th birthday. With the possible exception of Pete Coors, at MolsonCoors, no other individual in the beer industry is as tied to their company as Jim Koch is to Boston Beers. There is no doubt that the next 10 years will show what might become the final transformation of this company.
There will be a day when Jim will leave the limelight of the industry. As hard as it might seem to believe, all good things come to an end. The good news is, however, is that we are not yet there!
Happy 69th birthday Jim! Until next year….