The Boston Beer Company, Inc. and certain subsidiaries (Boston Beer) engage in the business of selling alcohol beverages throughout the United States and in selected international markets, under the trademarks ‘The Boston Beer Company’, ‘Twisted Tea Brewing Company’, ‘Hard Seltzer Beverage Company’, ‘Angry Orchard Cider Company’, ‘Dogfish Head Craft Brewery’, ‘Dogfish Head Distilling Co.’, ‘Angel City Brewing Company’, ‘Coney Island Brewing Company’, ‘Green Rebel Brewing Co.’, ‘Truly Distilling...
The Boston Beer Company, Inc. and certain subsidiaries (Boston Beer) engage in the business of selling alcohol beverages throughout the United States and in selected international markets, under the trademarks ‘The Boston Beer Company’, ‘Twisted Tea Brewing Company’, ‘Hard Seltzer Beverage Company’, ‘Angry Orchard Cider Company’, ‘Dogfish Head Craft Brewery’, ‘Dogfish Head Distilling Co.’, ‘Angel City Brewing Company’, ‘Coney Island Brewing Company’, ‘Green Rebel Brewing Co.’, ‘Truly Distilling Co.’, ‘American Fermentation Company’, ‘General Admission Brewing Co.’, ‘TeaPot Worldwide’, and ‘Sun Cruiser Beverage Co.’.
Boston Beer produces alcohol beverages, including flavored malt beverages, hard seltzer, beer, and hard cider at company-owned breweries and its cidery and under contract arrangements at other brewery locations. The four primary company-owned breweries are focused on production and research and development, including breweries located in Boston, Massachusetts (the ‘Boston Brewery’), Cincinnati, Ohio (the ‘Cincinnati Brewery’), Milton, Delaware (the ‘Milton Brewery’) and Breinigsville, Pennsylvania (the ‘Pennsylvania Brewery’). These breweries, with the exception of the Pennsylvania Brewery, have tap rooms for retail sales on site. The company produces a small but growing amount of distilled spirits and spirits based ready to drink beverages (‘spirits RTDs’) at the Milton Brewery and other contract brewery locations.
The company also operates three smaller local breweries that are mainly focused on brewing and packaging beers for retail sales on site at tap rooms and gift shops, restaurant activities, developing innovative and traditional beers and in some cases, supporting draft and package accounts in the respective local market areas. These local breweries are located in Boston, Massachusetts (the ‘Samuel Adams Boston Downtown Tap Room’), Rehoboth, Delaware (‘Dogfish Head Brewings and Eats’), Los Angeles, California (the ‘Angel City Brewery’ and ‘Truly LA’), and Cincinnati, Ohio (‘Cincincatti Tap Room’).
In addition, the company owns an apple orchard and cidery located in Walden, New York (the ‘Orchard’ and ‘Cidery’), a restaurant in Rehoboth, Delaware (‘Chesapeake & Maine’) and a boutique inn in Lewes, Delaware (the ‘Dogfish Inn’).
The company sells its beverages in various packages. Sleek cans, standard cans and bottles are sold primarily for off-premise retailers, which include grocery stores, club stores, convenience stores, liquor stores, and other traditional and e-commerce retail outlets. Kegs are sold primarily for on-premise retailers, which include bars, restaurants, stadiums and other venues.
The company’s beverages are sold by its sales force to the same types of customers and drinkers in similar size quantities, at similar price points and through substantially the same channels of distribution. These beverages are manufactured using similar production processes, have comparable alcohol content and generally fall within the same regulatory environment.
The company’s strategy is to create and offer a world-class variety of traditional and innovative alcohol beverages. The company’s primary brands which include the Twisted Tea, Truly Hard Seltzer, Samuel Adams, Angry Orchard and Dogfish Head brands are all available nationally. The Twisted Tea brand family has grown each year since the product was first introduced in 2001 and has established a loyal drinker following and has become the largest selling flavored malt beverage brand. In 2016, the company began national distribution of the Truly Hard Seltzer brand and it maintained its place as one of the leading brands in the hard seltzer category in 2023. The Samuel Adams brand began in 1984 and the brand is recognized as one of the largest and most respected craft beer brands with a particular focus on lagers and seasonal beers. The Angry Orchard brand was launched in 2011 and since 2013, Angry Orchard has been the largest selling hard cider in the United States. The Dogfish Head brand began in 1995 and is recognized as one of the most innovative and respected craft beer and spirits brand with a particular focus on India Pale Ales (‘IPAs’) and spirits RTDs. In addition to its primary brands, the company has two local brewery brands, Angel City and Coney Island, that primarily focus on local and regional distribution.
The company entered the market for spirits RTDs through its Dogfish Head brand in 2021 followed by its Truly Vodka Soda brand in 2022. The company is planning to launch additional RTD brands during the first quarter of 2024 which include Truly Tequila Soda brand and Sun Cruiser, a new spirit-based hard tea brand made with vodka.
In 2021, the company entered separate licensing agreements with PepsiCo, Inc. (‘Pepsi’) and Jim Beam Brands Co. (‘Jim Beam’) to develop, market and sell alcohol beverages. During 2022 and 2023, the company sold products under the brand names ‘Hard Mountain Dew’ under the Pepsi agreements and ‘Sauza Agave Cocktails’ and ‘Jim Beam Kentucky Coolers’ under the Jim Beam agreements. Also, the company collected royalties under the Jim Beam agreement on Jim Beam shipments of ‘Truly Vodka’ and ‘Twisted Tea Whiskey’.
Twisted Tea
The company offers over ten styles of flavored malt beverages in the Twisted Tea brand family, most of which are available nationally in both the United States and Canada. The majority of the promotional and distribution efforts for the Twisted Tea brand family are focused on Twisted Tea Original, Twisted Tea Half and Half and variety packs in various standard can packages. During 2023, the company increased its promotional efforts related to Twisted Tea Light and the style grew over 115% off a relatively small base.
Truly Hard Seltzer
The company offers over thirty styles of hard seltzer in the Truly Hard Seltzer brand family, most of which are available nationally in the United States. The majority of the promotional and distribution efforts for the Truly brand family in 2023 were focused on sleek can variety packages which include, Truly Berry Mix Pack, Truly Tropical Mix Pack, Truly Citrus Mix Pack, Truly Lemonade Seltzer Mix Pack, Truly Fruit Punch Mix Pack, and Truly Margarita Style Pack.
In early 2024, the company is launching a new 8% ABV ‘Truly Unruly’ variety pack, which will replace its Truly Margarita Style Pack, and a new Truly Party Pack, which will replace its Truly Tropical Pack.
Samuel Adams and Dogfish Head Beers
The company offers over twenty styles of beer in the Samuel Adams brand family and the brand is recognized for helping launch the craft beer industry. Samuel Adams Boston Lager is the company’s flagship beer that was introduced in 1984.
The Samuel Adams Seasonal program of beers includes various limited availability seasonal beers and variety packs.
The majority of the promotional and distribution efforts for the Samuel Adams brand family are focused on Samuel Adams Boston Lager and the Samuel Adams Seasonal program, as well as Samuel Adams Just the Haze, a non-alcoholic hazy IPA that was released in early 2021 and Samuel Adams Gold Rush, a non-alcoholic golden lager that was released in early 2023. The two Samuel Adams non-alcoholic beers combined grew over 80% in 2023 and represent over 5% of the brands total volume. Most Samuel Adams beers are available nationally in various bottle, standard can, and keg packages.
The Samuel Adams brand also releases a variety of specialty package and draft beers brewed in limited quantities at its Samuel Adams Downtown Boston Tap Room, Samuel Adams Boston Brewery Tap Room, and Samuel Adams Cincinnati Brewery Tap Room.
The company offers over twenty-five styles of beer in the Dogfish Head brand family. The Dogfish Head brand is recognized as an early leader in bringing culinary innovations to the U.S. craft beer market. The majority of the promotional and distribution efforts for the Dogfish Head brand family are focused on continually-hopped Dogfish Head 60 Minute and 90 Minute IPAs, along with seasonal variety packs. These styles are offered in various can, bottle and keg packages. The Dogfish Head brand also releases a variety of specialty package and draft beers brewed in limited quantities at its Dogfish Head Brewings and Eats and Milton Brewery tasting room locations. The company does not own distribution rights to the Dogfish Head beer and distilled spirits brands outside of the United States and Canada.
Angry Orchard Hard Cider
The company offers over ten styles of hard cider in the Angry Orchard brand family, most of which are available nationally in the United States in various bottle, can, and keg packages. The majority of the promotional and distribution efforts for the Angry Orchard brand family are focused on Angry Orchard Crisp Apple. The Angry Orchard brand also releases a variety of specialty package and draft ciders fermented in limited quantities at its Company-owned Orchard and Cidery in Walden, New York.
Dogfish Head Spirit RTDs, Truly Vodka Soda and Truly Tequila Soda
The Dogfish Head brand began distilling spirits in 2002 and is considered one of the original craft distilleries. The company offers over 15 styles of distilled spirits under the Dogfish Head brand in small quantities that are sold in limited markets. In 2021, the company entered the market for spirits RTDs through its Dogfish Head brand.
The company offers seven styles of spirits RTDs under the Dogfish Head brand that are available nationally in sleek can and sleek can variety packages.
The company offers eleven styles of spirits RTDs under the Truly Vodka Soda brand that are available nationally in sleek can and sleek can variety packages. In the second half of 2023, the company introduced its Truly Tequila Soda variety pack to limited test markets. The company is planning to launch the Truly Tequila Soda variety pack nationally during the first quarter of 2024.
The company continually evaluates the performance of its beverages and the rationalization of its product lines as a whole. Periodically, the company discontinues certain styles and packages. For example, during the first half of 2023, the company discontinued Truly Iced Tea Variety Pack and is planning to discontinue Truly Margarita Style Variety Pack and Truly Tropical Variety Pack during the first half of 2024. Certain styles or brands put on hiatus or discontinued in previous years may be produced for the company’s variety packs or reintroduced.
Product Innovations
The company continually tests new alcohol beverages and may sell them under various brand labels for evaluation of drinker interest. The Boston Brewery, the Milton Brewery and the Orchard, along with its other larger breweries and brewery tap rooms spend significant time ideating, testing and developing alcohol beverages for the company’s potential future commercial development and evaluating ingredients and process improvements for existing beverages.
The company’s most significant innovations in 2023 were the launches of new styles of its Truly Vodka Soda brand and its launch in limited markets of Truly Tequila Soda and Slingers, a new flavored malt beverage brand. In the first quarter of 2024, the company is planning to launch Truly Tequila Soda nationally and expand Slingers to more markets. Also, during the first quarter of 2024, the company is planning to launch two new brands in limited markets. These two new brands are Sun Cruiser, a new vodka based hard tea and General Admission, a new non-alcoholic beer. During the rest of 2024, the company has plans to add new beverage styles and reformulate existing styles of beverages.
In May 2021, the company was establishing a subsidiary to serve as a dedicated research and innovation hub in the federally regulated market of Canada focused on non-alcoholic cannabis beverages. This subsidiary enables the company to develop and pilot unique cannabis beverages, while cannabis regulations continue to evolve in the United States and worldwide. The company began selling limited quantities of cannabis beverage products in Canada under the TeaPot brand during the second half of 2022. The company does not have plans to produce or sell any cannabis products outside of Canada.
Sales, Distribution, and Marketing
As dictated by the legal and regulatory environment, most all the company’s sales are made to a network of over 300 wholesalers in the United States and to a network of foreign wholesalers, importers or other agencies (collectively referred to as ‘Distributors’). These Distributors, in turn, sell the products to retailers, such as grocery stores, club stores, convenience stores, liquor stores, bars, restaurants, stadiums and other traditional and e-commerce retail outlets, where the products are sold to drinkers, and in some limited circumstances to parties who act as sub-distributors. The company sells its products predominantly in the United States, but also has markets in Canada, Europe, Israel, Australia, New Zealand, the Caribbean, the Pacific Rim, Mexico, and Central and South America.
Sales representatives typically carry samples of the company’s beverages and other promotional materials to educate wholesale and retail buyers about the quality and taste of the company’s products. The company has developed strong relationships with its Distributors and retailers.
Packaging and Ingredients
Cans. Truly Hard Seltzer brand beverages are primarily packaged in sleek cans and Twisted Tea brand beverages are primarily packaged in standard cans. In 2023, approximately 79% of the company’s total volume was packaged in cans and the company expects that percentage to increase further in 2024. The demand for cans in the beverage industry significantly increased during 2020 and 2021 and there was a shortage of capacity, as can manufacturers adjusted their supply chains to keep up with the increased demand which had accelerated beginning in 2020 as alcohol consumption shifted from on-premise to off-premise. In 2021, as the Truly brand family and the Twisted brand families grew, the company experienced supply shortages and these supply shortages impacted the company’s production schedules and increased can costs as a result of using a more expensive can supplier.
Flavorings and Fruit Juice. The company’s beverages include many unique and proprietary flavors and combinations of flavors and some of these flavorings are single sourced. Truly Hard Seltzer and Twisted Tea brand beverages are particularly reliant on the use of flavorings and a variety of flavors as part of their appeal to drinkers. The company is working closely with various flavoring and fruit juice suppliers to ensure it has an adequate supply and it will have sufficient supply of flavorings and fruit juice in 2024.
Cardboard. The company’s beverages are packaged primarily in cardboard wraps, carriers and cardboard shipping cases. During 2020, the company experienced a disruption to its supply of cardboard wraps which impacted its production schedules. Since 2020, the company has not had any significant disruptions in its supply of cardboard and the company will have a sufficient supply of cardboard wraps in 2024.
Glass. Some of the company’s beverages are sold in glass bottles. Due to the COVID-19 pandemic during 2020 and 2021, the demand for glass bottles in the beverage industry significantly increased and there was a shortage of capacity, as glass manufacturers needed to adjust their supply chains to keep up with the increased demand. The most recent disruption was during the fourth quarter of 2020, which impacted production schedules. Since 2020, the company has not had any significant disruptions in its supply of glass and the company will have a sufficient supply of glass in 2024.
Malt. The two-row varieties of barley used in the company’s malt are mainly grown in the United States and Canada. The 2023 North American barley crop, which will support 2024 malt needs, was generally consistent with historical long-term averages with regard to both quality and quantity. The company purchased most of the malt used in the production of its beers from four suppliers during 2023. There are other malt suppliers available that are capable of supplying its needs.
Hops. The company uses Noble hop varieties from Europe for many of its Samuel Adams beers and also uses hops grown in other areas of Europe, the United States, and New Zealand. Noble hops are grown in several specific areas in Germany and the Czech Republic that are recognized for growing hops with superior taste and aroma properties. The company uses hops in various formats, including T-90 hop pellets, T-45 hop pellets and CO2 Extract. The company stores its hops in multiple cold storage warehouses to minimize the impact of a catastrophe at a single site.
The company enters into purchase commitments with seven primary hop dealers and attempts to maintain a one to two-year supply of essential hop varieties on-hand in order to limit the risk of an unexpected reduction in supply and procures hops needed for new beers, based on its best estimate of likely short-term demand. The company classifies hops inventory in excess of two years of forecasted usage as other long term assets.
Yeast. The company uses multiple yeast strains for production of its beverages. While some strains are commercially available, other strains are proprietary. Since the proprietary strains cannot be replaced if destroyed, the company protects these strains by storing multiple cultures of the same strain at different production locations and in several independent laboratories.
Apples. The company uses special varieties and origins of apples in its hard ciders that it believes are important for their flavor profiles. In 2023, these apples were sourced primarily from Europe and the United States; and include bittersweet apples from France and culinary apples from Italy, Washington State and New York.
Production Strategy
The Pennsylvania Brewery, the Cincinnati Brewery and the Milton Brewery produced most of the company’s shipment volume from breweries owned by the company during 2023. The Pennsylvania Brewery is the company’s largest brewery.
Production and retail activities at the company’s local breweries and tap rooms are mainly for brewing and packaging beers for retail sales on site at tap rooms and gift shops, restaurant activities, developing innovative and traditional beers and in some cases supporting draft and package accounts in the respective local market areas.
The company has a brewing and packaging services agreement with subsidiaries of City Brewing Company, LLC (‘City Brewing’).
The company has a production agreement with Rauch North America (‘Rauch’).
Regulation
To operate its production facilities, the company must obtain and maintain numerous permits, licenses and approvals from various governmental agencies, including but not limited to, the Alcohol and Tobacco Tax and Trade Bureau (the ‘TTB’), the Food and Drug Administration, state alcohol regulatory agencies, and state and federal environmental agencies.
Trademarks
The company has obtained trademark registrations with the United States Patent and Trademark Office for over 400 trademarks, including Samuel Adams, Sam Adams, Twisted Tea, Truly, Truly Hard Seltzer, Angry Orchard, Dogfish Head, Coney Island, and Angel City Brewery.
Competition
Many of the company’s competitors are AB InBev, Molson Coors, Constellation, Heineken, and Mark Anthony Brands.
History
The Boston Beer Company, Inc. was founded in 1984. The company was incorporated in 1995.
