Since 2009, Oregon’s Ninkasi Brewing has been producing Maiden the Shade, a “summer IPA” created to help celebrate an annual fair.
It recently received a new look, bringing it to my attention for the first time, thanks to East Coast selection bias and that peskiness of distribution. I can say nothing for the beer, having never had it, but the forethought of that brand sure caught my attention. In recent years, the prescience of the Pacific Northwest in regard to beer and love of all things hop seems like a future that had long been planned, but perhaps America’s love affair with IPA wasn’t always a guaranteed thing.
Either way, the idea of a “summer IPA” sounds pretty damned smart right about now.
A week from today, leadership overseeing the Boston Beer suite of brands – most notably Samuel Adams beer – will present their Q1 earnings report. If recent hints by founder Jim Koch are any indication, there’s reason to suspect (conspiratorially or not) that it may not be all sunshine and roses.
The last few years have been tough for Boston Beer. Declining interest across a variety of brands accounted for a 7% drop in dollar sales for the Sam Adams portfolio in 2016, sentiment that has only continued into this year.
Through nearly the first quarter of 2017, Boston Lager dollar sales dropped around 8% compared to the same timeframe last year. Rebel, the IPA that was supposed to reinvigorate interest in the brand, got remade to start this year. It’s down 20% in dollar sales so far in grocery, convenience and other bread-and-butter stores for the company.
I, like many others, see Sam Adams as the brand that launched a lifetime of beer geekdom. But things are changing rapidly for the company. For longtime devotees, it’s not much for better as it is worse.
AB InBev and MillerCoors continue to watch as flagship brands slowly decline in sales, but some legacy craft breweries are suffering as well. Sales of Sierra Nevada’s Pale Ale (2.8 percent) and Torpedo IPA (2.3 percent) are down. Sam Adams continues to face a free fall for Boston Lager, declining nearly 12 percent in 2016.
“If [consumers] have two [beers] they feel are equal, and one’s local and one’s not local, that’s an important part to the decision for two-thirds of craft purchasers,” Brewers Association economist Bart Watson recently mentioned at a Brewbound Session in San Diego.
So what are these Big Boys of beer to do? Follow the lead of their smaller, more nimble competition.
It was a comment left by my brother (mostly serious, partially in jest) on a recent photo I posted on Instagram showcasing Sam Adams’ Rebel Raw IPA. He gives me crap (jokingly) about my affinity for breweries like Sam Adams and Sierra Nevada, but he also lives in something of a beer Mecca in Seattle, Washington.
But he wasn’t the only one to tease, as I got some pushback on Facebook, too.
I know the conversation based around the question “is Sam Adams ‘craft'” gets people all kinds of wound up, but more than ever, the assertion that Boston Beer’s flagship brands should even be relevant just feels a bit too much. Even if it’s an argument spurred by beer lovers deep in the trenches of nerdom, having to justify an appreciation for one of the iconic breweries in the country makes the situation just a little too … political.
As every day goes by and yet another brewery opens, things keep getting interesting for one of the stalwarts of the industry.
By now, you may have heard about the rough go Boston Beer (read: Sam Adams and brands) had over the first four months of 2016. Shipments are down, projections are off and that stock price took a Humpty Dumpty like tumble last week. But really, it’s all activity that was expected. Going back to 2014, Boston Beer leadership was candid that they “expect the competitive environment to be tougher” across beer.
Here we are, with that challenge front and center. Competition not just coming from the growing behemoth of AB InBev, but from the rapidly expanding craft beer base, increasingly comprised of the local and regional breweries that play such a pivotal role in customer choices. People want “craft” in their goods these days and beer is the place to find it. One Nielsen poll showed 56 percent of respondents see craft as a “small, independent company” while a Harris poll indicated themes of “handmade/handcrafted” and “limited edition” were the most likely sign of quality.
@CNBCBeerNews the problem is, we drinkers don’t look at SAM as craft. I see them and move along..
At a time when consumers are looking for these kinds of connections across all kinds of goods, it’s no wonder Boston Beer is simply trying to tread water. From the company’s own admission of increased difficulty with distribution to drinkers’ localized tendencies, it’s only getting harder for Boston Beer.
Strangest of all, could these changes officially spell the end of Boston Beer as “craft”?
It is certainly not a wholly American value, but competition sometimes feels more deeply rooted in our everyday lives than it should be.
After all, there’s a reason why “#winning” became a cultural phenomenon after Charlie Sheen made it part of his personal mantra.
The idea of victory is so ingrained in our cultural expectations, we love equating things with battles. We “fight the good fight” for all sorts of reasons – politics, tobacco use and boredom. We’ve even been waging war in beer for years, going back to Jim Koch’s 1994 “declaration of war” after Anheuser-Busch purchased a stake in Redhook.
No matter how trivial the task, we love shifting the thought process to win or lose, love or fear. The spectrum is wide, but we set forth with clear goals.
Which is why, as the beer industry grows and competition becomes intensified, I’m particularly curious about how bigger companies want to fight off those around them in a never ending battle to win over our wallets, pint glasses and throats, in a very literal way.
Supermarkets and grocery stores are brimming with beer options these days, making every trip to coolers more time consuming for drinkers trying to sort through all the choices. According to estimates from Nielsen, there are nearly 6,700 craft brands now available in major stores, with about 850 of those just showing up in 2015.
And, of course, plenty of those new bottles and cans are IPAs. A third of 2015’s new brands will be India pale ale, if trends hold from earlier this year.
It seems many breweries – or perhaps just drinkers – tether success to the creation of a hopped-up ale. Beer rating boards are flooded with them and people are always searching for the next Pliny the Elder.
When taking the temperature of the beer industry, it always feels like we start with IPA, then consider where to move from there, but it’s with good reason. There’s no denying the power it has on the marketplace. Which, in the three months since I last asked “Are We Watching the Next Stage of Sam Adams?” the answer appears to be a resounding “yes.”
Among all the industry news of buyouts, investments and global mergers, we may be witnessing the pivot and turn of one of America’s most iconic breweries. While businesses are busy reimagining individual beers to lure back customers, another is making an adjustment in planning a decade in the making.
It’s certainly not a wholesale philosophical shift, but Sam Adams – and more specifically Jim Koch – is buying into a new approach.
If you’re deep in the weeds of today’s industry – or if you read my recent Beer Money series – you’ve no doubt heard about the Fair BEER and Small BREW acts, opposing legislation that have been geared toward presenting tax breaks to the beer industry. The Small BREW Act was created to address only breweries producing less than 6 million barrels of beer a year, while the Fair BEER Act would benefit all brewers, including Big Boys like Anheuser-Busch, MillerCoors and Heineken.
Those attempts are now more or less scrapped in lieu of a bill known as the Craft Beverage Modernization and Tax Reform Act, which is jointly endorsed by the Brewers Association (“small guys”) and Beer Institute (all of beer) who were previously on opposite sides of the spectrum.
…Boston Beer’s production in 2009 was roughly half of its 2014 total. That’s an average of more than 20% growth a year. If that pace continues, Boston Beer will be over the 6 million bar in less than three years and, for tax purposes, would be considered a macro.
But here’s the thing. None of these bills are likely to pass, so we don’t need to worry about definitions and labels – yet.
Because Boston Beer could still lose its “craft” definition, just not for the reason everyone’s talking about.
After four years of waiting, Alchemy & Science, a “craft brew incubator” led by Magic Hat founder Alan Newman, is getting its moment in the spotlight. Funded by Boston Beer as a subsidiary of craft’s largest company, Alchemy & Science offers a unique opportunity to launch localized brands using Jim Koch’s money, but not the name of his most famous creation, Sam Adams.
But what’s lost amongst the national rollout, which includes new TV commercials and a feature story in a top-25 newspaper, is that Alchemy & Science has been stealthy over the past four years for a reason. Boston Beer and its side project have been honing in on a major group of consumers everyone has acknowledged as important, but perhaps haven’t made a top-line priority in a singular way.
Alchemy & Science covets minority drinkers. Especially Hispanics.