Boston Beer’s founder Jim Koch may sell to a foreign brewer
Hark his words. Boston Beer, the maker of Samuel Adams beer and Angry Orchard hard cider, would be worth more to a foreign owner unburdened by the U.S. tax structure, founder Jim Koch, 66, told a Senate committee on 31 July 2015.
Because of that, Mr Koch said he is regularly approached by investment bankers looking to strike a sale. He’s been turning them down – for now.
While the senate’s hearing was all about corporate taxes in the U.S. – and why U.S. companies prefer to skip them by relocating their headquarters elsewhere – Mr Koch’s comments may be a sign that he sees a sale as the eventual fate of his company.
Boston Beer was founded 31 years ago. Its market value is currently USD 2.9 billion. Mr Koch probably isn’t in a rush to sell. And the decision is up to him. He controls the company’s Class B shares with all the voting rights, so he can wait as long as he wants.
On 30 July 2015, the company reported net revenue of USD 451.7 million for the 26-week period ended 27 June 2015. It said beer shipments in the first half were up 6 percent compared with the same period last year.
While this seems a lot, Boston Beer actually trails the craft beer category, whose total sales jumped 16 percent over the same period, according to data published by the Brewers Association.
Some of the core beers within the Samuel Adams umbrella brand are suffering declines, only offset by increased demand for newer brands such as Angry Orchard cider and hard iced tea brand Twisted Tea.
The company’s beer sales have been lagging so much that its cider and flavoured malt beverage products such as Twisted Tea, Angry Orchard Cider and Traveler Shandy, may soon exceed 50 percent of its sales.
Part of the problem for Boston Beer’s brand Samuel Adams may be that, while the Brewers Association still considers Boston Beer a “craft” brewer after adjusting the rules a few years ago, many consumers may view it as too big and too staid.
In a recent joint presentation held by the Brewers Association and market survey company Nielsen, it was reported that about a third of self-proclaimed “craft drinkers” said they “always or often” sought to buy a beer that they had never tried before.
That could help explain why Samuel Adams isn’t performing as well as it used to: like Bud and Miller, it has become an all too familiar sight on the country’s beer shelves.
