Tomorrow is Jim Koch’s 71st birthday, and as is tradition with these posts, we will visit Jim and Boston Brewing.
The transformation of the Boston Brewing Company in recent years has been truly remarkable. Not long ago, industry pundits questioned the success of the company, and rumors circulated within the industry regarding who would lead the establishment. That was then and this is now. In 2019, Jim acquired DogFish Head, the highly successful Delaware Brewery. The acquisition enhanced Boston’s high-end beer portfolio, a transaction that, even within a short period of time, was positive for both corporations. Boston Beers’ continued success, however, is best explained in a recent video posted on the Wall Street Journal entitled From Beer to Hard Seltzer, A Culture Pivot Finds a New Market, by Dave Burwick, President, and CEO of Boston Beers. According to Dave, in 2016, the company jumped into the hard seltzer business and targeted predominantly females. By 2017, however, the strategy had changed to gender-neutral marketing and encompassed the well-educated, upscale consumer. As of this year, the seltzer market has grown from a one percent market share in 2016 to a potential 10% share of the market.
According to Dave, until recently, Sam Adams had been the favorite child of the Boston Beers; but with the growth of Angry Orchard, Twisted Tea, and Truly, the hard seltzer; Boston Beers needed a culture change. The company’s stated goal was to be number one in the seltzer category, but to achieve the said objective; it had to be the number one priority of the company. The dollar amount to achieve this goal was not an issue with management, but given the increased competition from both Bud Light Seltzer and Corona Seltzer; it became necessary for Boston to reformulate their liquid and thereby improve the overall taste.
The seltzer category is dominated by two brands, White Claw made by Mike’s, and Truly, brewed by Boston. Both brands have continued their meteoric growth within the category despite the Coronavirus and the multitude of closed trade channels. As seltzers continue to expand, expect additional competitors to jump in the mix, including MillerCoors’ Coors Seltzer, which will arrive later this summer.
In his Wall Street Journal post, Dave goes on to highlight the importance of understanding a company’s culture and one’s commitment to that culture. Boston Beers has certainly been able to make the necessary transitions, while continuing to be a leader in the industry.
It is doubtful that Jim envisioned the success of Boston Beers when he first began the adventure in the early 1980s, but it is easy to see that Jim’s greatest strength is his vision and his ability to recognize change when needed. Let’s wait to see what Boston Beers looks like when Jim turns 80!
Happy 71st, Jim.
May 27th, 2020