5.

1 The Company:
Company Background:
(write a brief summary, no more than a page, of the company, its major businesses,
markets/customers, products/services, latest annual revenue/profit, etc. )
Ranked #4 during the 2010 US Open Beer Championship and consistently ranked in the
top 10 of brewing competitions, Samuel Adams Boston Lager is the flagship beer of The Boston
Beer Company. Although the Boston Beer Company was founded in 1984, the roots of the
Samuel Adams Boston Lager are over 100 years old beginning with James Kochs great-great
grandfathers family recipe. As a result of the Industrial Revolution, small regional brewers, like
James Kochs great-great grandfathers, struggled due to increasing competition. In 1984, Jim
Koch resurrected his family recipe and produced the first batch of Samuel Adams Boston Lager
in his kitchen. Koch formed an alliance with Pittsburgh Brewing Company to produce the Sam
Adams lager in their facility. Koch marketed and sold his beer door to door in Boston area
restaurants and bars and was soon rewarded with 25 regular customers. In 1985 on Patriots Day,
Jim advertised by delivering bottles of the Sam Adams Lager to various bars and restaurants as
samples. Bartenders quickly became fans of the craft beer and sales began to grow rapidly and
eventually spread across the state of Massachusetts, Connecticut and into Germany. Three months
later the Sam Adams Lager was voted the best beer in America. Throughout the second half of the
1980s the Samuel Adams Lager continued to become more and more popular and their sales,
customer base, and notoriety on the upper east coast continued to grow. In 1988 Koch purchased
an old brewery in Boston with the intention of creating his own brewing operation. However,
with the states massive regulations and high costs, they decided to build a research and
development facility and tourist attraction out of the location, which still today attracts many
visitors each year. New opportunities in the 90s brought widespread changes in the beer game for
Boston Beer and the Sam Adams brand. Koch initiated three major moves in which Boston Beer
expanded their market share to encompass 48 of the 50 states and watched sales and distribution
increase significantly. They first created an alliance with Blitz-Weinhart Brewing, a Portland
Oregon Brewing Company, to brew and distribute its product in the western United States. They
opened their own Sam Adams Brew House in Philadelphia to showcase their beers to the dining
public. Finally, they entered into an agreement with Californias Pacific Wine Company to
distribute Boston Beer products on the west coast. After this expansion Boston Beer saw its sales
increase by 63% in 1992 and its production increased by 41% between 1992 and 1994. As a result

of their heightened popularity, Sam Adams was served at all of the social balls and dinners during
President Clintons inaugural celebration in 1993. Jim Koch created an innovative marketing
strategy to widen exposure to the Samuel Adams brand by posting advertisements that touted
American Beer against foreign beers. To distance themselves from foreign beer companies,
Boston Beer developed slogans such as Samuel Adams Made in the U.S.A. and Declare Your
Independence from Foreign Beer. Boston Beer began to focus their target market on upscale
beer drinking Americans. Instead of gearing its product toward twenty something middle-class
males, Samuel Adams targeted connoisseurs, beer aficionados with an eye for quality and a taste
for an exceptional product. This clever bit of advertising and the focused marketing group has
made Boston Beer and the Samuel Adams brand name the number one domestic microbrewer. In
the mid 1990s with sales and profits soaring, Boston Beer made the decision to go public and in
November of 1995 had an Initial Public Offering on the New York Stock Exchange of 3.1 million
shares of Class A Common Stock. In its initial offering, Boston Beer reserved nearly 1 million
shares at a discount price for sale to its loyal customers. To create product awareness, every six
pack sold contained a mail-in coupon to purchase discounted shares of the Boston Beer stock.3
Today they are brewing 16 different core beers, 9 seasonal beers, 5 extreme beers, 3 imperial
beers, and 3 barrel room collection beers of which Samuel Adams is their flagship product. Now,
Boston Beer makes more than 60 beer varieties and brings in over $600 million in revenue, with
1% market share of the U.S. beer market.
Company Vision/Mission:
Mission:
To seek long term profitable growth by offering the highest quality products to the U.S. beer
drinker.
Vision:
To become the leading brewer in the Better Beer category by creating and offering high quality
full-flavored beers.

Comments/Analysis (evaluate their vision/mission statements in terms of clarity, impact, etc.):

His vision for his company was to put the best possible glass of beer in front of the American beer
drinker. That means ingredients, recipe, brewing process, care, attention and freshness are really the
essential elements. Those have really been the guideposts ever since he started. In terms of clarity, their
vision/mission statements are pretty straightforward and their goal is evident in the vision of the
statement. In terms of impact, it would depend on their operational effectiveness in order to achieve their
mission.

Company Objectives and Strategy

(You should research their annual reports, financial presentations to analysts, etc.)
Company Objectives:
Increase sales by 50% to 6.2 million barrels/year
Increase market share by 35%, targeting Sam Adams biggest direct competitor- Yuengling
Expand business with bars and restaurants by 20% to increase brand recognition
Be included among the list of green companies

Strategy:
Boston Beer's business strategy is built around crafting high quality beer. The company invests
heavily in research and testing to create newer brews. Case in point is a new research and
development center it started in 2011. The product at Boston Beer is well distinguished and is
very popular among beer lovers.

Comments/Analysis (evaluate their Objectives/Strategy statements in terms of clarity, directional, etc.):

The Companys business goal is to become the leading brewer in the better beer category by creating
and offering high quality full-flavored beers. With the support of a large, well-trained sales organization
and world-class brewers, the Company strives to achieve this goal by brewing great products, and
increasing brand availability and awareness through distribution, advertising, point-of-sale, promotional
programs and drinker education. In late 2011, the Board of Directors and Executive Officers established
several strategic and financial goals designed to increase sales and profitability, aggressively manage
price and costs to achieve delivered gross margin and earnings goals, invest in the supply chain to meet
demand and deliver great beer at competitive economics and build an organization capable of driving
growth and operating the breweries safely, while improving operational efficiencies, optimizing costs and
reducing risk. Therefore, making it clear and directional.
Strategy: Boston Beer is constantly innovating and creating newer products. The company continually
test brews different beers and occasionally sells them under various brand labels for evaluation of drinker
interest. Boston Brewery spends a majority of its time "ideating, testing and developing beers and ciders,"
and is consequently, a leading innovator in its segment of products. In 2011, the company formed
Alchemy & Science, a subsidiary that finds new opportunities in craft brewing. Alchemy & Science looks
for unique brewing techniques and ingredients, and also hunts for ancient or new recipes to develop new
beer. Due to Boston Beer's efforts and innovations, and its success at gaining customer loyalty, the
company made it to Forbes magazine's "Best small companies list in 2012.

Company Culture and Values

Creating a culture that celebrated beer with a passion and depth of knowledge that cant help but
be contagious to others. People at the Boston Beer Company all share a love of great beer. Each
year, usually in January, everyone gathers together. One of the highlights of the meeting is the
beer trivia contest. With a culture so steeped in beer education and knowledge, winning is a pretty
big deal. Recently, one of the hotel bartenders who was watching as the various teams arrived in
costume with music and much enthusiasm and fanfare, said, "I've always known Samuel Adams
made the best beer in America, but now I see this is the greatest company in America."
Comments/Analysis (evaluate their culture and Values statements in terms of):
All new employees go through intensive training on everything from ingredients, brewing, and beer
styles, to taking care of the beer once it leaves the brewery. They've worked hard at maintaining that
culture through the successes and growth enjoyed over the years. In June of 2008, Jim and The Boston
Beer Company launched a program called Samuel Adams Brewing the American Dream to provide low
and moderate income food & beverage small business owners (typically employing between 1-5 people)
with the financial support and mentoring they need to achieve their dreams even when the odds are
stacked against them. Jim has not lost sight of his humble beginnings or forgotten how hard it was in the
early years, which is why he felt it was important to give back to other passionate small business owners.

5.2. The Performance

Company Financials
Complete Excel spreadsheet (provided in a separate attachment)
Revenue Growth Rates
Avg
Annual
2010
2011
2012
2013
2014 Rate
Comment
12%
11%
13%
27%
22%
17.00% growth rate decreased from 2010 to 2011
Copy and Paste the bordered sections of the Excel spreadsheet and briefly discuss trends.

Boston Beer has experienced significant growth in the last few years, with the exception
of between 2010 and 2011. In 2010 the company grew by 11% while in 2011 it only grew
by 10%. While a 1% drop may not seem like a big deal, it is actually a large problem for
a company such as Boston Beer. However in 2012 they brought their growth rate up to
13%, which was their best to date. The next year was an exciting year for Boston Beer, as
they grew a whopping 27%, more than doubling the previous years growth rate. The rate
fell again between 2013 and 2014, dropping to 22%. Overall Boston Beer still managed

to maintain an average growth rate of 17%, which is excellent considering the companys
size and (until fairly recently) regional location.
Comments/Analysis (discuss trends such as revenue growth, R&D spend rates, etc.)
Revenue grew all five years, as stated above. Some years experienced more growth than others, and some years
growth dropped as much as 6%. However growth was still maintained, as the company never shrank or experienced
negative growth. Research and development spending has been steadily increasing over the last few years, which
could account for some of Boston Beers continued growth trend. Just between 2010 and 2014 research and
development spending increased by 114.69 million dollars. Between 2013 and 2014 alone they increased R&D
spending by 43 million dollars. Boston Beers growth will likely continue in this manner as long as its R&D
continues to increase. Selling and administrative expenses have almost doubled since 2010, and are up to 65.97
million, which shows just how much the company is growing. Needing more capitol for administration expenses
means more employees and more work, thus a larger company. Shareholders equity has also been increasing, due to
more and more investors realizing the value of Boston Beer. In 2010 Boston Beer only held 165.59 million in
shareholder equity; by the end of 2014 they had 436.14 million. With more investor capital comes more opportunity
to grow and expand. It also means people are taking notice of the company, which will increase sales. As sales and
brand awareness increase the company will be able to widen its hold on the market, and begin selling products in
more far reaching places.

Revenue Growth/decline Analysis

Based on the data from 2.1, answer the following:
a. Was the revenue growth (if any) a result of acquisitions made over the past 5 years? If so, identify
and discuss the impact of such actions
The revenue growth in 2013 was likely due to the acquisition of the Coney Island Brewery brand.
By purchasing this beer label, Boston Beer added another source of income and allowed itself to
continue to expand. Boston Beer brought in an existing customer group (Coney Island Brewerys
customers) and likely introduced them to other Boston Beer products. The higher growth rate in
2010 is likely due to Boston Brewerys acquisition of nearly all of Pennsylvania Brewerys assets
in mid 2008. By mid 2009 Boston Beer had managed to bring its in house brewing capacity
(thanks to the Pennsylvania Brewerys factories) from around 35% to over 95%. This led to a
substantial increase in revenue over the next couple of years, into 2010.
b.

Did the company spinoff any parts of their business in last 5 years? If so, identify and discuss.
Boston Beer released the Sam Adams Rebel IPA in 2014, which is a spinoff of their current Sam
Adams brand. IPAs or India Pale Ales have become much beloved by the American craft beer
consumers, so Boston Beer had to release a product to interpose themselves into this niche. The
Rebel IPA has done just that, and had huge success. Boston Beer has also released a perfect
glass for drinking Sam Adams, and maybe all beers, out of. They have had commercials, they have
given away the glass on factory tours, they have done everything to market the glass to the public.
It has raised brand awareness, and encouraged consumers to drink Sam Adams because it has
such a unique aspect to it.

5.3 The Leadership

Review their Board of Directors and Executive Team and fill in the following table
Board of Directors
Leadership-BOD

Position and brief background*

Age

Director since

David A. Burwick

Class A Director, previously an

52

2005

71

1995

53

2012

64

1995

65

1999

executive at Peets Coffee and Tea, Inc.,

Weight Watchers International, Inc., and
PepsiCo.
Pearson C. Cummin, III

Class A Director, previously an

executive at Grey Fox Associates, LLC,
a private investment company. He also
served on the board of directors of
Pacific Sunwear of California, Inc., and
served as the secretary/treasurer of the
American Diabetes Association.

Cynthia A. Fisher

Class B Director, Ms. Fisher has also

founded multiple companies including
WaterRev LLC, ViaCord, and ViaCell.
She is also the wife of C. James Koch,
the founder and chairman of Boston
Beer.

C. James (Jim) Koch

Class B Director, Mr. Koch founded

Boston Beer in 1984 and has grown it
from a small start-up to what it is today.
Prior to founding Boston Beer, Koch
worked as a consultant for an
international consulting firm.

Jay Margolis

Class B Director, also chairman of

Intuit Consulting LLC, previously
chairman and CEO of Cach, Inc.,

served on board of directors for Godiva

Chocolatier Inc., and President and
CEO of Reebok, Inc.
Martin F. Roper

Class B Director, President and CEO of

51

1999

57

2007

53

2003

Age

With the

Boston Beer since 2001. He also serves

on the board of directors for Lumber
Liquidators, Inc.
Gregg A. Tanner

Class B Director, currently CEO of

Deans Food Company. Previously SVP
of Global Operations for The Hershey
Company and SVP of Retail Supply
Chains for ConAgra Foods.

Jean-Michel Valette

Class A Director, previously Chairman

of the Board at Peets Coffee & Tea Inc.
He is also chairman of the board for
Select Comfort Corporation and Robert
Mondavi Winery.

*: also include their role as a Director

Leadership-Executive

Position and brief background

Team
C. James (Jim) Koch

company since
Chairman, Mr. Koch founded Boston

64

1984

51

1994

Beer in 1984 and has grown it from a

small start-up to what it is today. Prior
to founding Boston Beer, Koch worked
as a consultant for an international
consulting firm.
Martin F. Roper

President and CEO, He also serves on

the board of directors for Lumber
Liquidators, Inc.

William F. Urich

Chief Financial Officer and Treasurer,

58

2003

54

1997

56

1988

60

2007

44

2012

63

2011

64

1999

Previously CFO of Acirca and VP of

Finance and Business Development for
United Distillers & Vintners.
John C. Geist

VP of Sales, previously Sales Manager

of a large alcoholic beverage
distributor.

David L. Grinnell

VP of Brewing, Previously one of the

original brewers of the New Amsterdam
Brewing Company.

Thomas W. Lance

VP of Operations, Previously Executive

VP of Operations at Kens Foods and he
help several positions at Bausch and
Lomb. He also held positions at several
consumer food companies including
Welchs, General Mills, and Quaker
Oats.

Ai-Li Lim

VP of Human Resources, Previously

Senior Director of Human Resources
for Vistaprint USA Inc., Director of
Management Effectiveness at Fidelity
Human Resources Service.

Robert P. Pagano

VP of Brand Development, Previously

Managing Director of Red Sky Insights,
LLC. He also served as a partner of
Monitor Group and co-founded the
advertising firm, Pagano Schenck &
Kay, Inc.

Kathleen H. Wade

VP - Legal and Corporate Secretary

Comments/Analysis (discuss the Leadership in terms of their background/experience, etc. to

excute strategies):
The diverse management team and board of directors that have been assembled at Boston Beer
promises to excel the company for years to come. Many of these executive have held several highlevel positions at global corporations and have decades of experience building companies. Many
members of this team have been loyal members for over ten years and this shows how dedicated
they are to the success of this company.

5.4 Resource/Capability Evaluation

Area

Ranking*
7

Comments/Rationale
They are executing their mission to seek long-term
profitability. Providing the highest quality brews in

Vision/Mission
9

the U.S. is varied amongst customers opinions.

This company strives on implementing a beer lover
culture for its employees. Intensive training is
mandatory for all employees to protect the craft and
ensure their passion for beers, creating a better

Culture
9

product.
Provides a better beer for consumers. Started up by
relying on making profits from sales, rather than
marketing. They arent stagnant when it comes to new

Strategy
Leadership (CEO+Exec team)

10

products. Their cash flow is very well managed.

The CEO and Exec team are highly active within the
company. The Chairman (Former CEO) is the greatest
asset of the company and is still highly involved with

the decisions of the company. Generous to employees

creating
6

job

satisfaction.

(Offers

share

price

appreciation)
Use privately owned and contracted breweries. Over
400 wholesalers. Received a lower score, because they
are relatively small in the market share compared to
powerhouse brewing companies. Although they do have
operations international, they mainly depend on

Operating Mgmt
8

national sales.
This company uses all the resources they have to the
fullest and it creates a successful selling product. The
weaker area in the distribution chain is hard to alter

Resources overall
8

because of state regulations.

Boston Beer Company didnt use marketing as a CSF to
create a successful company. They were able to succeed
from the quality of their product which generated
tremendous

sales

profit.

As

the

business

kept

expanding, they invested a lot more money into

advertisement and promotion and continue to keep
Resources - Sales/Marketing
8

expanding this department.

Very important part of this companys success. They
thrive on creating new products for customers to try.
The expansion into other alcoholic beverages such as
hard iced tea and hard cider has been very profitable.
They didnt receive a perfect score, because its a risk

Resources - R&D
8

creating new products that may stumble.

Produces a high quality product, but attaining the
superior ingredients and brewing equipment comes at a

Resources - Manufacturing
5

higher cost.
Must go through distributors to who then sell the
product to retailers. Regulations in different states
make it hard for them to control the sale and

Resources - Distribution channels

Resources - Support functions

distribution of their product.

They are a major industry that partners with smaller
industries to expand on opportunities. Brewing the
American Dream is the foundation created by the

Boston Beer Company that helps support these

businesses.
9

Sam Adams is very particular when it comes to the

process of how their beers should be crafted, protected

Processes/systems
6

and treated once leaving the brewery.

They tend to partner with moderate income microentrepreneurs that BBC intends to help grow. These
partnerships help increase sales in targeted market

Partners
5

locations.
The high quality ingredients needed to produce the
superior tasting beer offers an advantage for the

Suppliers
7

suppliers.
Huge customer following for the beer lovers. The
various products keep the majority of the customers
loyal to the brand. Certain things such as the economy
and seasonal change can deter a customer to another

Customers
9

brand.
Extremely profitable, the company has never been in
debt. Only reason they dont have a 10, is because they
fluctuate from year to year and there is always room to

Financial performance

make more revenues.