Health & Fitness

This is Why Sam Adams Purchased Dogfish Head

On this extremely aggressive period of brewing, the each day information delivers a gentle drumbeat of brewery buy-outs, closings, and mergers. The speed has rendered many of those bulletins mere background music, barely acknowledged if in any respect. However some brewery gross sales can nonetheless reverberate as loudly as a gong at a silent retreat. On Could 9, information broke extensive that Boston Beer Firm, the makers of Samuel Adams beer, purchased Dogfish Head Craft Brewed Ales for $300 million, placing two of America’s most iconic craft breweries beneath a single umbrella.

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“Collectively within the market, we’re exponentially extra highly effective than one or the opposite of us,” says Dogfish Head founder Sam Calagione, who notes that it’s a “difficult second to be a mid-size brewery.”

The transfer could appear a bit left discipline on the floor, however a more in-depth look uncovers a pair causes for the acquisition. For Boston Beer Firm, the namesake beverage is an more and more smaller slice of its financial pie. Gross sales of the flagship Sam Adams Boston Lager are eroding like a surf-battered sandcastle, the each day tide bringing in recent waves of competitors.

In flip, the beer firm has change into a formidable beverage firm. Boston Beer’s suite of beyond-beer merchandise consists of Twisted Tea, Offended Orchard cider, Really Onerous Seltzer, Tura Alcoholic Kombucha, and the Wild Leaf laborious tea. Its mixed gross sales far outweigh Sam Adams suite of beers.

Enter Dogfish Head. The beer-steered brewery makes its bones on America’s hottest types of craft brews, the IPA and tartly approachable bitter beers such because the fast-growing SeaQuench Ale. Specifically, SeaQuench has discovered a following with fitness-minded beer drinkers battling the (beer stomach) bulge, a part of Dogfish Head’s large play within the better-for-you beer class. (This 12 months, it rolled out Barely Mighty, a 95-calorie session IPA.)

“Craft brewing has at all times been the guts and soul of Boston Beer Firm,” says founder Jim Koch. Shopping for Dogfish Head may be seen as “our assertion that this stays on the coronary heart of the corporate.” (Boston Beer Firm’s A&S Brewing subsidiary additionally owns Brooklyn’s Coney Island Brewing, in addition to different smaller breweries together with Miami’s Concrete Seashore and Angel Metropolis, positioned in Los Angeles.)

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By becoming a member of forces, the breweries can construct a beverage powerhouse capable of stand sturdy, irrespective of which path the fashionable winds gust. “After we checked out our portfolios, we thought, ‘Wow, these are so complementary,’” Calagione, whose brewery additionally operates a rising spirits division, advised us. “It felt like we have been constructing this stunning Amish quilt and we had all these little squares that we may hand-sew collectively. OK, right here’s the distilled-spirits sq.. Right here’s the cider sq.. Right here’s the ales sq.. Right here’s the lagers sq.. It felt very pure.”

Along with the Voltron-unite synergies, safeguarding in opposition to an unsure ingesting future, Dogfish Head will ultimately develop into Boston Beer’s broad, strong distribution community, that means six-packs of 60 Minute IPA won’t ever be removed from hand. “We hope our beers are simpler to search out,” Calagione says. Higher placement will hopefully result in higher gross sales, particularly within the face of hop-scented headwinds.

“Each new brewery that opens, their flagship beer is an IPA,” Calagione says. “We’ve received to make it possible for 60 Minute returns to development.” Supermarkets, comfort shops, fuel stations, liquor shops, and extra are particularly essential to each breweries, which promote round 99 % of their beer by way of the normal three-tier system, indirectly out of taprooms.

Don’t count on Dogfish Head to outsource manufacturing to Boston Beer breweries, tweaking recipes and strategies. “We wouldn’t be doing this if Dogfish Head weren’t making nice beers of their brewery,” Koch says.

What would possibly occur, although, is that if there’s heightened demand for sure Dogfish Head manufacturers, Boston Beer may also help clear a manufacturing bottleneck by brewing and packaging beer. Even when that occurs, the possession will likely be clear. Sooner or later, count on Dogfish Head and Sam Adams logos on all bottles, cans, and packaging supplies. “We will set an instance for…different breweries about being clear with shopper about who makes the beer,” Koch says.

Moreover, the breweries will share expertise and brainpower to design new beers and drinks. Every part is on the desk. It’s a brand new world of brewing, one which welcomes and even calls for stressed creativity. From laborious cider to culinary targeted beers, Sam Adams and Dogfish Head have lengthy been forward of the curve, creating developments as an alternative of following them. The union of deep distribution and forward-thinking possession augurs properly for the long run, irrespective of if we’re ingesting double IPAs, laborious tea, or one other wild new fermentation.

“While you carry two progressive brewing groups collectively, you’re going to get magic,” Koch says.

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