Jim Koch and Boston Beer (NYSE: SAM) have built a brand through quality and consistency, but they might lose the market share battle if they can't maintain consumer awareness. With nearly 2,000 breweries operating last year, the market's already viciously competitive. Even Google contributed to the making of brand-new brew.
Keeping it local
Google's big on sustainability, and its branded brew is part of that effort. The company contributed honey from its campus beehives to Dogfish Head Brewery for the creation of a unique concoction, which brings unusual ingredients from around the world to create a uniquely flavored craft. Dubbed Urkontinent, the first batch was a Google campus exclusive. However, given Dogfish's proclivity for strange brew, it wouldn't surprise me to see it offered in larger batches to a thirsty public.
Part of a bigger problem
Teaming up with "Brewgle" would have been a golden opportunity for Koch to burnish his company's craft cred. Boston Beer's been virtually standing still, losing ground in the segment despite craft's chugging a slightly larger percentage of the American beer market each year. After solid growth from 2008 to 2009, smaller Craft Brewers Alliance (Nasdaq: HOOK) slowed last year, so its 2011 performance could be a bellwether for long-term success in the craft-brew arena. Megabrewers such as Anheuser Busch InBev (NYSE: BUD) and MolsonCoors (NYSE: TAP) are finding it nearly impossible to grow as case volume continues to sink, so the last thing they need is to have non-brewing companies getting all the attention.
Raise your shot glass
The company that could come out on top of this intoxicated imbroglio might just be Diageo (NYSE: DEO), the world's largest premium spirits company and the leading edge of a years-long trend toward liquor. According to the 2011 Beer Handbook, put out by the Beverage Information Group, overall U.S. beer consumption recently declined 1.9% from last year. As long as this trend continues, operators in other alcohol segments may be the real winners.
With Sam Adams in a strange middle ground between craft brewer and large established brewer, the company may find it harder to ride its craft heritage going forward. I'm going to have to diverge with our Motley analysts backing Boston Beer and Molson Coors -- putting your money where your mouth is as a beer drinker just might leave you with a portfolio hangover.
Stay on top of Diageo's advance toward drink domination by adding it to your Watchlist. If you're more of a beer fan, you should add these brewers to your Watchlist as well, so you can find out the moment their stocks start getting fizzy again.
Fool contributor Alex Planes holds no financial stake in any company mentioned here. Follow him on Google+ for more news, observations, and random attempts at wit.
