Pour out a pint of Boston lager and enjoy the heady growth that Boston Beer (NYSE:SAM) has found in the craft brew category.

Despite rising costs that will continue exerting pressure on the maker of Samuel Adams beer and Twisted Tea, quarterly net income at the brewer rose 9% as shipment volume increased by 13% over last year. According to ING Barings, barley accounts for about 6% of a beer's selling price. That doesn't bode well for beer brewers after severe weather cut barley production in major barley-producing markets such as Europe, Canada, and Australia. According to the USDA, the price of grain could rise to as much as $2.95 a bushel. Add in rising costs of glass and fuel, and all brewers will be feeling the pinch.

Higher costs have eaten into profit margins, as well -- the fourth-quarter gross margin of 56% was down 170 basis points from the year-ago quarter. The company said to expect repressed margins in 2007 because of higher production prices and change in product mix.

Yet Boston Beer was able to offset some of these effects with a 2% price increase. That didn't stop consumers from drinking to their heart's content -- growth this quarter was 18%, and 17% over the full year in terms of depletions, an industry metric that measures distributor sales.

Increasing sales stem from the general popularity of craft beer, which is defined by the Brewer's Association as beer made by a brewery that manufactures less than 2 million barrels a year (one barrel is equivalent to 31 gallons), has less than 25% ownership by a non-craft brewing company, and has at least 50% of its volume in an all-malt beer. Craft brewers sold more than 6.6 million barrels in 2006, up 11% from 6 million barrels the year before, while American beer sales remained relatively flat. With the spotlight on craft beers, even the large brewmeisters like Anheuser-Busch (NYSE:BUD) and Coors (NYSE:TAP) have tried to tap into the market by producing smaller-run beers.

Boston Beer's Sam Adams is currently the largest of the craft brews, thanks to double-digit growth in depletion sales from its Boston Lager, its Seasonals assortment, and its Brewmaster's Collection. Sam Adams Light (a personal favorite), on the other hand, only had single-digit growth. Anecdotal evidence suggests it is harder to find in local bars, taverns, and restaurants, even when the original lager is sold there.

But with high demand helping Boston Beer in mitigating rising costs, this looks like a company that investors can raise a mug to.

For more stories to discuss over a brewski:

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Fool contributor Rich Duprey has drained plenty of bottles of Sam Adams beer, but he does not own any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.