Jim Koch celebrated his 70th birthday yesterday, May 27th, and as a tradition with these pages warrants, we annually revisit Jim and Boston Beers on this date. Because this is Jim’s 70th, this year is most relevant in the future of Boston Beers.
The company has evolved into one that is perhaps more in-tune-with the consumers’ wants than any other current beer company. Boston’s portfolio is extensive, but their brands, like Twisted Tea, Truly, and Angry Orchard, have transformed the company. Where Boston’s great beers once led the charge, they are now secondary in volume sales; and their alternative products are primary in volume sales.
Several years ago, Boston Beers’ future was being discussed by many industry and Wall Street pundits. The company’s recent successes in alternative beers now has Boston’s stock price at or near all-time records! Their short term future outlook has changed dramatically.
Recently, the on-going question for Jim has been: what will the future hold for the company as Jim aged. That seems to have been answered with Boston’s recent announcement regarding the purchase of Dogfish Head and subsequently, Sam Calagione will be joining Boston’s team.
As structured, the deal was certainly a win-win for both companies with both portfolios’ merging. Even their individual distributor networks are workable as over 50% of distributors have both brands in their houses. The key to this acquisition is that Jim and Boston now have a 50-year-old, passionate, and motivated craft beer leader who can assist Boston and Dogfish going forward. On the surface, it looks like a perfect fit for both companies, but only time will tell. In the past, the industry has seen similar ventures which initially appeared to be a good fit, but then things changed, and ultimately the the merger did not work out according to plan. This one, however, looks to be different.
So the question going forward is: now that Boston and Dogfish are together, will there be more acquisitions by Boston? Jim has commented recently that he has been offered over 50 such deals, but passed on all until Dogfish presented itself. Of course, when your company continues to grow, its stock remains at or near highs, and you lead in new products and categories, it puts the company in a position to be very selective as opportunities present themselves.
It appears that Jim’s wait-and-see approach is working. Given the current craft trends, that wait-and-see approach is the right hand to play.
No doubt this next decade for Jim will be very interesting. Happy 70th Jim!
May 27th, 2019
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