EP-078 Jim Koch of Boston Beer Company

Published: April 30, 2016, 1:36 a.m.

I feel like the past 18 months have been a sort of reconciliation for craft beer drinkers and brewers, with a lot of folks focusing on beers that are highly drinkable, or sessionable, but still quite flavorful, exciting, and ultimately easy to find. There\u2019s been a surge in the market of craft Lagers, Pilsners, Session IPAs and Sours, along with some renewed appreciation for beers like Sierra Nevada Pale Ale.\xa0And in about a month we\u2019ll be seeing an ode to Fat Tire in a collaboration 12-pack from New Belgium. So even as some craft brewers and their fans are finding more and more obscure, niche areas to explore, a lot of folks in craft beer are backing up a bit and asking themselves, "What\u2019s good?" And, "Can we get more of that, please?" So with that kind of a swing back toward the middle, you\u2019d expect a classic craft beer like Sam Adam\u2019s Boston Lager to be in a bit of a resurgence. But as the nation\u2019s largest craft brewer (right behind the recently re-defined-as-craft brewer, Yuengling),\xa0Boston Beer Company hasn\u2019t been seeing the love\u2014at least when you look at the numbers.\xa0 The numbers for Sam Adams mimics the glacial decline of macro lagers more than it does the consistent double-digit growth of smaller craft brewers. Is it just that Boston Beer has gotten so big that it simply isn\u2019t part of the consideration set anymore? Maybe. Is the profile of Boston Lager outdated? Maybe. But I\u2019d like to offer a different view\u2014one that sets aside this specific beer for a second, and takes a look at the entirely of the Boston Beer business.\xa0 Boston Beer is so much more than Sam Adams. And its future seems geared toward diversity\u2014not just a single beer they\u2019ve been making since the 1980s.\xa0 In the past few years, they\u2019ve taken a run at IPA with Rebel, and it instantly became one of the biggest launches in craft beer history. They followed that with a spread of different IPAs all playing off that success.\xa0 They\u2019ve recently introduce a series of nitro beers that are sure to get the word "nitro" on the minds of consumers in a big way for the first time since Guinness.\xa0 Boston Beer is also the owner of Angry Orchard, a cider company they started from scratch, and now owns about 60% of the cider market in just three years. And now makes more than a million barrels and growing.\xa0 Even before that, they launched Twisted Tea, a brand that sells 640,000 barrels\u2019 worth of booze a year.\xa0That\u2019s nearly the volume of Lagunitas, and it\u2019s still growing by double digits.\xa0 Through their Coney Island Brand, part of their Alchemy & Science wing, they entered the FMB space with a line of hard sodas.\xa0 They\u2019ve also recently launched a line of alcoholic sparkling waters called Truly.\xa0 All this to say, it\u2019d be foolish to talk about Boston Beer as Sam Adams anymore. Boston Beer is a mature, well-diversified company that\u2019s placing big bets on the next thing in alcohol that it feels it has the opportunity and expertise to pursue. Through that lens, they\u2019re not the slow-moving, classic craft beer that we should all take pity on as it slowly loses share. Rather, they\u2019re one of the leading companies in the U.S. when it comes to new alcoholic beverage entries. And by that account, they\u2019re killing it.\xa0 Now, that might take some of the sheen off an idol for you\u2014especially if you were holding up Jim Koch as some sort of purist in craft beer. Although I think he\u2019s also that. But the larger view of Koch should certainly take an honest look at the things this guy\u2014and his company, of which he still holds all the controlling shares\u2014puts in to the world on a regular basis. So yeah, when it comes to something like Boston Lager, this guy is as pure as they come. And when it comes to new opportunities, new ventures, new ideas\u2014this guy is as cunning as it gets. And you don\u2019t really have to worry about reconciling all that, of course, because Koch is nothing is not indifferent to other people\u2019s opinions. And I kind of love him for it.