Is Samuel Adams becoming the Budweiser of craft beer?
It may be an unfair comparison, but a pertinent one. When Boston Beer reports its full year results in February 2017, the craft brewer is expected to record lower year-over-year revenue. That would be a first for Boston Beer since 2003.
Observers say this is a worrisome development because, unlike the last time this happened, growth in the craft beer industry has slowed down. Boston Beer cannot count on any broad momentum in the industry to help it out of this slump.
Not only is the brewer seeing volumes declining because of the continuing weakness of its flagship Samuel Adams brand, but now its Angry Orchard and Coney Island brands of hard cider and soda are ailing, too. In the past, Boston Beer’s ciders and alcopops more than compensated for its struggling beer sales. No longer, it seems.
The slowing craft-beer industry has been extensively covered. To all appearances, craft beer has become a victim of its own success. There are now some 5,000 craft brewers in operation in the US, which makes it increasingly difficult to grab shelf or tap space.
Of course, Boston Beer, as one of the industry’s largest, has more clout than most when it launches new products. That has worked in its favour in the past, but its size may be working against it now.
The current consumer trends in craft beer seem to prefer unique, local beers, and millennials are exhibiting little of the brand loyalty their parents did. They always appear to be looking for the latest to-go-for taste in the market. And because of Samuel Adams’ longevity – it has been around for over three decades – the beer can be likened to drinking the same beer your dad did, which could mean death for a brew among younger drinkers.
Perhaps Samuel Adam’s longevity and ubiquity point to a fundamental omission in the BA’s three-pillared definition of craft beer: life-cycle. If a certain craft beer brand happens to be on every beer shelf across the country for as long as anyone can remember, it cannot possibly be craft since it lacks a major selling point of craft: novelty. In this respect, seasonal varieties that come under the same label will not do it much good either.
Does this mean Samuel Adams is going the way of Budweiser, Miller Lite and others? Of course, there are older brands that defy the life cycle theory: think of Pabst and Miller High Life, which are having a comeback. Perhaps there is no such thing as a verifiable life cycle of beers. But this should not rule it out altogether.
Whether Samuel Adams has fallen under the Budweiser spell or not still begs the question: can a national craft brand be reinvigorated as consumers demand more small batch, local brews? Boston Beer’s management is probably pondering this very issue right now. Maybe they have reached a conclusion and subsequently elected to sell USD 45 million worth of their shares as was reported in January 2017.
