Craft Beer

In the last few years, some of the world’s biggest brewers have been acquiring craft beer brands like they were Pokémon (gotta catch ’em all!). Brands like Lagunitas, Goose Island, and countless others have “sold out” to foreign-owned brewers. The national popularity of these craft beer breweries is attractive to foreign companies looking to expand their international influence.

Through it all, Boston Beer Company has held out and roundly refused to play the Mergers & Acquisitions game. Boston Beer Company is the $2 billion brewery that brings the world the popular craft beer brand Sam Adams, as well as Angry Orchard Hard Cider, Twisted Tea, and Truly Spiked & Sparkling. To this day, they remain the country’s largest independent craft brewer. The company’s founder and controlling shareholder, Jim Koch, has long stated his opposition to selling Boston Beer Co. to giant corporations like Anheuser-Busch. Last July, Koch gave testimony to Senate committee addressing his concerns that the US’s high corporate tax rate is driving businesses to enter into these deals with international corporations.

Despite Koch’s strong anti-acquisition rhetoric, the Asian powerhouse brewers Asahi and Sapporo have both expressed their interest in Boston Beer Company. One of the most attractive qualities of Boston Beer is their nationwide distribution network. Koch continues to scoff at the idea of “selling out.”

“Why haven’t we sold Boston Beer Co. to a multinational or another foreign entity?” Koch said, “The simple answer is, it’s just not who we are.” Koch’s commitment to keeping Boston Beer an American-owned brewery is admirable, but an ever-expanding and changing market might force him to change his tune over time.

While Koch probably won’t agree to an acquisition by a foreign-owned company anytime soon, Sam Adams may have found a potential suitor in Constellation Brands.

Constellation is a Vernon, New York-based company that is valued at $31 billion. When they started, their main focus was wine and spirits—their brands included Black Box wine and Svedka vodka. Then, in 2013 Constellation acquired the US rights to the hugely successful Mexican beer franchises, Corona, and Modelo. Last December, they closed on their $1 billion takeover of the San Diego institution, Ballast Point Brewing.

Boston Beer perfectly fits Constellation’s profit margin “premiumization” strategy. According to data from Bloomberg Intelligence, Boston Beer generates more revenue from a hectoliter than most of the world’s top brewers.

Having experienced a sustained drop in sales recently, Boston Brewing may be in trouble. It begs the question, “Will Sam Adams be the next craft brewery to sell out?” It’s probably too early to say either way, but many stock analysts have advised Boston Beer Company shareholders to hold onto the stock due to rumors of an acquisition. But for now, at least, Koch and the Boston Beer Company’s ownership is staying right where it is.