Boston Beer's (NYSE:SAM) Samuel Adams brand helped to redefine beer and kick off the craft beer revolution in the United States. Success breeds competition, though, and while just a few years ago Boston Beer had a claim over most of the craft beer shelf, today the field is crowded. Can it rise above the rest, or will it be squeezed between small local breweries on one side and global beer giants on the other? To help you decide, we've compiled a premium research report filled with everything you need to know about Boston Beer's prospects. Today, you can read the following free sample of this report, detailing how the company has fostered its brand image as a small craft brewer even as it has grown to become one of the largest American-owned breweries.
As it has grown from basically a one-man operation to nationwide distribution, Boston Beer has had to walk a tightrope with its branding. The company has worked hard to convince investors that it can grow to become one of the nation's most popular beers, while at the same time assuring beer aficionados that it remains a small operation driven by passion for great beer, not sales volumes or profit margins. Part of Boston Beer's strategy to maintain its craft brew bona fides has been its engagement with the broader craft brew movement.
Boston Beer has a complex relationship with other craft brewers. They are competitors, obviously, but at the same time, their energy helps to grow the overall craft beer market. An especially popular local beer can help to get mass-market beer drinkers accustomed to paying two or three times as much money for a better beer, and that helps the entire Better Beer category. Since Boston Beer is the largest player in the category, it rides that wave.
The company knows this and has typically supported other craft brewers. For six years, Boston Beer has run a program called Brewing the American Dream, providing loans, workshops, and mentoring to breweries and other food and beverage industry small businesses. In 2008, when a global hops shortage threatened brewers, Boston Beer held a lottery to disburse 20,000 pounds of its own hops to smaller competitors at cost, helping to keep them in business. Boston Beer also holds an annual LongShot Contest, in which small brewers and homebrewers compete for the opportunity to have one of their beers nationally distributed by Boston Beer.
In turn, despite its size, Boston Beer has been fully embraced by the craft movement it helped to spawn. The Brewers Association, a trade group for craft brews, actually changed its definition of a "craft brewer" in 2011 to allow Boston Beer to remain in the category, as the Sam Adams brand had grown too large to be considered a craft beer under the old rules. Meanwhile, the only other publicly traded small brewer, Craft Brew Alliance (NASDAQ:BREW), is not considered a true craft brewer by the Brewers Association because it is partially owned by Anheuser-Busch InBev.
Boston Beer's handling of the Samuel Adams brand has so far been excellent. As it tries to gain the scale of a major brewer but keep the cachet of a local microbrew, any signs that the company is sacrificing beer quality for margins, or any appearance that Boston Beer is bullying smaller brewers, could be disastrous for the company's image.
Fool contributor Daniel Ferry has no positions in the stocks mentioned above. The Motley Fool owns shares of Boston Beer. Motley Fool newsletter services recommend Boston Beer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.