Food & Drink Sam Adams and Dogfish Head Just Merged. We Talked to Their Founders About It. Courtesy of Boston Beer Company Thursday, news broke that Boston Beer Company (makers of Samuel Adams, Angry Orchard ciders, and the TRULY brand of hard seltzer, among others) would merge with Delaware’s Dogfish Head Brewery. A joint press release valued the deal at around $300 million in cash and stock; shares in BBC (stock ticker: SAM, because of course) have climbed around 5% since the announcement. Some people will tell you that craft beer is not like other businesses. Boston Beer Company founder and chairman Jim Koch and Dogfish Head co-founder Sam Calagione are two of them. They think beer companies should be led by “brewers first, and businesspeople second,” and that corporate independence -- as defined by the Brewers Association, a trade group on whose board they have both served -- is a critical ingredient of authentic craft beer. But as the number of American breweries ticks past 7,400, macrobrewers have proven they can buy and operate craft brands without facing revolt from the drinking public. Consolidation, not creativity, is the buzzword in the beer industry these days. In other words, instead of looking like America’s “strangest, happiest economic story,” craft beer is starting to look like, well, just another business. Having covered the beer space for the better part of the decade, I’ve interviewed both Koch and Calagione several times. With the precipitous state of the craft beer industry very much on my mind, I spoke to the two men again by phone as they drove from a press event at New York City’s Eataly to Dogfish Head’s brewery in Delaware. This interview has been edited lightly for brevity and clarity. Thrillist: Jim and Sam, thanks for getting on the phone. Congratulations on the deal. Jim Koch: We’re in the car here. Sam Calagione: Lot of road noise. Koch: If you can hear clinking in the background, you can imagine what that is. Calagione: The carrot on the stick at the end of our journey! Nice. I'm in Asheville, North Carolina right now. I want to start with a question on a lot of people’s minds, or at least my own. How is this deal any different from a macrobrewer like ABI acquiring a craft brewery like Wicked Weed? Koch: It's totally different. This is two independent craft brewers joining forces. This is not a big global brewing conglomerate buying a small American craft brewer. Second, both Sam and I have always been strong advocates for transparency and believe that beer drinkers have the right to know who brews their beer. We both had issues with big brewers buying craft brewers without letting the consumer in on that fact. We intend to do what Boston beer has done with our innovation breweries like Angel City, Concrete Beach, and Coney Island. We are very proud to put Boston Beer Company on [their labels] as a brewer. We’re equally proud to have our name on Dogfish Head’s beers. They feel the same way. Calagione: We're very proud to be independent craft brewers, and thankfully that's not a subjective concept. Our trade group, the Brewers Association, which represents the vast majority of America's 7,500 craft breweries, has the definition of indie craft, and we're proud to be within that. We also have a seal that only true indie craft breweries can put on their packaging. Our companies believe in that seal because we believe consumers want to know who makes their beer. And when we believe there's a lot of consumers who will be proud to buy beer made by a true indie American craft brewery and one that has the capability to get our beers coast to coast within the three-tier system. How extensively did you guys consult with Brewers Association while you were putting this deal together? Koch: We didn’t have to, because both Sam and I have been on the board of the Brewers Association. Calagione: While we didn't consult with the Brewers Association, I had a great chat yesterday with Bob Pease, the CEO, and he sees this as yet another example of the creativity and collaborative ethos of the craft brewing community. [In a statement provided to Thrillist, BA president & CEO Pease said: “As industry veterans, Jim and Sam are staunch supporters of the independent beer movement, leading the charge for small brewers and instrumental in growing the overall craft brewing segment [...] They will no doubt continue to champion for the more than 7,400 small and independent breweries in the U.S.”] So the trade group is excited. What about customers? If I’m a diehard Dogfish Head drinker or a diehard Sam Adams fan, why should I be excited about this? Calagione: I’ll start. In a word. Accessibility. It'll amplify the accessibility of both of our portfolios. On a national level, it's very challenging when essentially four international conglomerates control over 80% of America's beer market. It's challenging for the little guys to break through that noise and get our brands to the consumer, no matter how much [the consumers] desire it. Well now with our combined scale or combined creativity are a combined network of, uh, of distributors. We'll be able to get that beer more easily into consumers' hands. Koch: This brings together brewers with a long track record of innovation and creativity. And it's been my experience that when you put creative individuals together, cool things happen that might not happen if they're innovating in their separate silos. Courtesy of Boston Beer Company You’re two very different people with very different definitions of innovation and creativity. How do you fit those two different personality types together to be complementary, rather than butting heads? Koch: Sam and I have already done this. Eight years ago, we brewed the first collaboration beer for a high-end food and beer tasting held by the Brewers Association called Savor. Sam had the idea for it. It was going to be called Savor the Flowers and we were going to use flowers including hops in new and different ways. I thought was very cool. He had this other idea is that we would collaborate on this beer old-school, by writing letters back and forth. The actual experience of sitting there writing a letter to Sam -- folding it, putting it in an envelope, licking the envelope, licking the stamp, writing it, sending it to each other’s homes -- created a whole different set of sensory experiences. I called it the world's first epistolary beer. We were experimenting with this new hop that was not even on the market. [BBC’s] hop dealer in Germany had developed this new hop called 369. They were calling it Tutti Frutti. We made probably the first commercial beer with what is now known as the Mosaic hop. And it's become a staple of craft brewing. Calagione: I just learned something. I didn't realize that we used to be called Mosaic and it was great. Dave, even in your story, I'm actually learning something about that. Jim, I assume that you've been approached many times over about acquisition opportunities with breweries that look like a Dogfish Head, or had a similar portfolio, et cetera. Why Dogfish Head? Koch: You're right on the first assumption, not quite right on the second. I would guess I’ve turned down maybe 100 proposals [for BBC to acquire breweries.] But where you’re wrong: none of them were like Dogfish Head. There’s just a bunch of “soft synergies” here. We share the same mission: the survival and hopefully the prosperity of independent American craft breweries. We have the same company values. A lot of the transactions are out there are basically people wanting to turn their brewery into cash and go sit on a beach somewhere. Over the years, Sam had many such opportunities to do that. He was interested in joining forces with us, and it still is basically not taking a penny out of this merger. So the Calagione family will be the second-largest non-institutional shareholder [after Koch himself.] He is all in on this newly merged company.<doc-sep>Two big beer players merge in $300 million deal If craft beer wasn’t already over, this latest news might be the nail in the coffin: the Boston Beer Company — the producers of Samuel Adams beer and the second largest craft brewer in the U.S. — is merging with Dogfish Head Craft Brewery, the 13th largest independent brewery as ranked by the Brewers Association. The deal, valued at $300 million, follows other major consolidations in the beer industry, such as Constellation Brands’ $1 billion acquisition of a San Diego’s Ballast Point in 2015. Boston Beer CEO Dan Burwick (who is NOT the guy in all the Sam Adams commercials) will lead the merged company. “We expect that we’ll see more consolidation in the craft industry over time, and we’ll be in the best position to take advantage of those changes,” he said in a press release. And in other news…<doc-sep>Delaware-based craft beer company Dogfish Head Brewery is being acquired by the Boston-based brewer of Sam Adams beer in a $300 million cash and stock deal. The Boston Beer Company announced Thursday that it had entered into definitive agreements to acquire all of the equity interests in Dogfish Head Holding Co. Dogfish Head founder Sam Calagione and his family will receive about 406,000 shares of Boston Beer stock valued at about $128 million, based on a share price of $314.60. Dogfish Head shareholders also will receive $173 million in cash. Calagione also will join the board of Boston Beer. Officials say the combined company will be led by Boston Beer CEO Dave Burwick and will maintain a significant presence in Delaware.<doc-sep>
Why the world's largest ice cream company is betting on home delivery This vegan restaurant is actually opening locations during the pandemic These are the racist origins of Aunt Jemima and Uncle Ben's Chicken sandwiches are big business. See them all Heinz ketchup packets are shown in New York on Monday, August 22, 2005. H.J. Heinz Co., the world's biggest ketchup maker, said first-quarter profit fell 19 percent on expenses to cut jobs and sell businesses. (Photo by Andrew Harrer/Bloomberg via Getty Images) A Now Hiring banner sign is viewed outside a Chipotle restaurant during a new coronavirus pandemic, Tuesday, March 2, 2021, in Orlando, Fla. (Phelan M. Ebenhack via AP) FAIRFAX, CA - MAY 02: Cans of Coors beer are displayed on a shelf at a liquor store on May 2, 2018 in Fairfax, California. Molson Coors Brewing Co. reported first quarter earnings that fell short of analyst expectations of $2.44 billion with revenue of $2.33 billion. (Photo by Justin Sullivan/Getty Images) (CNN Business) — One of the biggest US craft brewing companies is bringing another beer heavyweight into its fold. The Boston Beer Company (SAM) — makers of the Samuel Adams beer brand and the second largest craft brewer in the United States — and Delaware-based brewer Dogfish Head Craft Brewery said Thursday that they plan to merge the companies in a deal valued at more than $300 million. Dogfish Head founder Sam Calagione and his family will receive around 406,000 shares of Boston Beer Company, valued at $314.60 a share. Additionally, Dogfish Head shareholders are set to receive $173 million in cash. Dave Burwick, the CEO of Boston Beer Company, will lead the merged company. “United, we will have the highest quality, most distinct, high-end portfolio, from both a price-point and product perspective with the top-ranked sales organization to bring it to market,” Burwick said. “We expect that we’ll see more consolidation in the craft industry over time, and we’ll be in the best position to take advantage of those changes.” Dogfish Head is the 13th largest craft brewer in the United States as of 2018, according to the industry group Brewers Association. Boston Beer Company is in a good position to make the acquisition. It reported a net revenue of $251.7 million in the first quarter of 2019 — up 32.1% from the same period of 2018. The consolidation of the two craft brewing companies comes in the wake of other high profile purchases in the beer industry. For instance, Ballast Point Brewing & Spirits sold to mega beer company Constellation Brands in 2015 for $1 billion dollars.