Just like The Force in the infamous ‘Star Wars’ franchise, The Boston Beer Co. and Dogfish Head Brewery, two iconic independent craft breweries founded in 1984 and 1995, respectively, are joining forces to take their brands to the next level by collaboratively brewing flavorful, handcrafted beer and “beyond beer” brands. Inked in May and closed on July 3, 2019, the $300 million merger not only brings together each company’s unrelenting passion for brewing, authenticity and innovation across the past half century, but also creates an American-owned dynasty for craft beer and beyond.
“The combination made sense, not just because of our complementary product portfolios and pricing tiers, but also because [of] our teams’ shared strong cultures, similar values and a commitment to craft brewing and innovation,” says Dave Burwick, president and chief executive officer (CEO) of the “new” Boston Beer Co.
Among his many responsibilities, Burwick states that finding new pathways for growth in a competitive beer marketplace is a top goal.
“My role as CEO is to take a very good thing and help it become even better by finding new pathways to growth and enabling our team to lead and win in an increasingly competitive and complex environment where we now manage a large portfolio of beer and ‘beyond beer’ brands,” Burwick explains. “In addition to the brands, we gained an incredible amount of talent, from brewing to sales co-workers, and we’re deeper than ever with the capabilities we’ll need to be successful in the future.”
As of Jan. 1, the technology platforms and financial systems of The Boston-based Boston Beer Co. and Milton, Del.-based Dogfish Head Brewery have been consolidated, while a dedicated team of 1,822 employees — the lifeblood of both breweries — is maintaining the operations and creativity of their respective breweries.
“One of the things that stuck out during the integration was just how similar our companies’ cultures and values were,” Burwick says. “Jim and Sam are friends and go way back, having joined forces on collaboration brews well before we were a singular entity, and it’s obvious why.
“… Since we’re still in the early days of the new Boston Beer, Jim, Sam and I are still establishing a rhythm,” Burwick continues. “As pioneers in the craft beer industry, Jim and Sam have known and respected each other for many years while I’ve known Jim for 15 years now, so our mutual trust, respect and admiration serve as a great foundation.”
An impressive legacy
The foundation and legacy of the new Boston Beer Co. has deep roots, particularly because it brings together the talent and passion of two widely respected founders and longtime friends. Koch and Calagione (and his wife, Mariah Calagione) built their respective brands out of nothing but a drive and obsession for brewing great beers.
Friends for 20 years, Koch and Calagione served on the Boulder, Colo.-based Brewer Association board for about a decade, where they helped develop the definition and seal for the indie craft brewery movement. About 10 years ago, they also partnered on the first domestic collaboration beer that Samuel Adams had ever done — Savor Flowers — and quickly realized the similarity of each brewer’s passion, creativity and culture.
Yet, before coming full circle as separate-but-combined craft breweries, each founder’s vision started with a quest to brew great beers.
When Koch happened upon his great-great grandfather’s lager recipe in his brewer dad’s attic, little did he realize that his first batch of Samuel Adams Boston Lager would not only become the “Lager that started the American Beer Revolution,” but also would be crowned the “Best Beer in America” at the Great American Beer Festival an unprecedented four times in five years while also shining a light on the then-evolving craft beer industry.
Meanwhile, for the past 25 years, Calagione has been brewing up something decidedly different and “off-centered.” This approach gave birth to Dogfish Head’s diverse beer portfolio, including the continually hopped 60 Minute IPA and 90 Minute Imperial IPA; the low-calorie, 95-calorie Slightly Mighty IPA; and a robust sour beer program led by SeaQuench Ale, the top-selling sour beer in America, Calagione says.
Although Calagione started out as a homebrewer, he notes that his mission from Day One was “to brew off-centered ales for off-centered people.” He’s also proud that Dogfish Head was the first commercial brewery in America committed to brewing the majority of its beers outside the Reinheitsgebot, while incorporating culinary ingredients from around the world.
“That was true when we opened as the smallest brewery in America and it is still true today,” Calagione says. “Our key early recipes were Chicory Stout made with chicory and coffee; Aprihop, the first distributed fruit IPA; and Immortal Ale brewed with maple syrup and juniper berries. … And I’m proud to say we are more experimental than ever.”
Burwick notes that Dogfish Head’s legacy of exceptional IPAs and sour beers, inspired by and brewed with culinary ingredients, is a perfect complement to Boston Beer’s portfolio, which now features 10 brand families: Samuel Adams, Twisted Tea, Truly Hard Seltzer, Angry Orchard, Dogfish Head, Wild Leaf, Tura, Angel City Brewery, Concrete Beach and Coney Island Brewing Co.
“Our various offerings are perfectly complementary within the portfolio,” Burwick says. “While Samuel Adams has a foundation of brewing exceptional lagers, seasonals and innovating within traditional beer styles, Boston Beer as a whole has expanded into beyond beer categories with Twisted Tea hard iced tea, Angry Orchard hard cider, Truly hard seltzer and other innovation brands including Tura hard kombucha and Wild Leaf hard tea.
“The Dogfish Head distillery operation is an innovation engine of its own that adds unique opportunities to our business,” Burwick continues. “Importantly, we’ve retained founders Sam and Mariah and therefore the ‘secret sauce’ of Dogfish Head will remain, ensuring that the brand stays separate, distinct and special and not ever confused with Samuel Adams.”
‘Making big changes to big things’
On The Boston Beer Co.’s Board of Director since 2005 and named president and CEO in April 2018, Burwick says he’s long admired the accomplishments of Koch, his team and the “very special culture” of an organization that Koch carefully cultivated and built from the ground up.
“An obsession with quality and a passion for brewing great beers (and beyond) is at the core of everything we do and is an ethos that Jim created when he opened the doors in 1984,” Burwick says. “I’ve learned from Jim that relentless drive and focusing on making big changes to big things can lead to tremendous growth, both personally and professionally.”
He notes that 2019 was a banner year for The Boston Beer Co. as it announced the merger with Dogfish Head Brewery as well as continuing its path as one of the top-ranked sales organization in beer industry. “We shipped approximately 5.3 million barrels, a 23.8 percent increase from the comparable 52-week period in 2018.” Burwick explains.
Boston Beer Co. and Dogfish Head will each maintain their status as independent craft breweries, but the newly minted Boston Beer Co. — the largest independent craft brewery in the United States — will be in a stronger position to compete against the global beer conglomerates within the craft beer category that are still 50- and 100-times its size, Burwick says.
“The new Boston Beer Co. may be the largest independent craft brewer in the country, but we are still less than 3 percent of the U.S. beer market share,” Burwick explains. “So, we are still David fighting the same dominant, international Goliaths that control more than 80 percent of our country’s beer market. Individually, the Dogfish Head and Boston Beer offerings pre-merger were great, but when put together, we have a well-rounded and well-differentiated (yet totally complementary) portfolio of high-end beverages. We’re committed to building on and maximizing strengths within our products, teams and customers.”
In September 2019, the new co-workers got together at Boston Beer’s national meeting that included its annual “epic” karaoke night that Burwick expects to continue as “innovation should be fun.”
Koch and Calagione wholeheartedly agree, noting that the sky’s the limit when it comes to the consolidated company, with collaboration and innovation, not competition, driving its success.
“Joining forces with Dogfish Head just made sense,” Koch says. “Both Boston Beer and Dogfish Head have a passion for brewing and innovation while sharing the same core values and vision for a strong American craft beer industry. As we enter our first full year as a single entity with a talented team of co-workers, the sky is the limit.”
Calagione notes that the merger will allow Dogfish Head to grow its brand nationally, while providing opportunities for co-workers’ personal growth for years to come. “From IPAs to lagers, sour beers to ciders, seltzers to teas and beyond, at Boston Beer we have the most complementary and dynamic high-end portfolio of any alcohol beverage company in America,” Calagione says. “We are excited to grow strong together in 2020 and beyond.”
A Dream Team
Just like the 1992 United States men’s Olympic basketball team, nicknamed the “Dream Team,” featured such NBA greats as Michael Jordan, Larry Bird, Charles Barkley and Earvin “Magic” Johnson, The Boston Beer Co. is assembling its own Dream Team, taking “Jim and Sam, the two greatest brewers on the planet,” and making sure they have the support to do what they do so well, Burwick says.
“With the Dogfish Head brand specifically, we’re trying to “scale the specialness” of the brand by allowing Sam and his team to continue to be the soul of the brand and drive the brand-building and innovation agenda,” Burwick says. “This is like being a member of the Dream Team, and the depth and character of this organization is tremendous.”
Boston Beer’s strong, consolidated nationwide distribution network spans the United States, Canada, Europe, Israel, Australia, New Zealand, the Caribbean, the Pacific Rim, Mexico, and Central and South America, which will help Dogfish Head get a foothold in other markets. For instance, since the merger, Dogfish Head beer has announced it is rolling out to a number of states that previously hadn’t offered the brand, including Montana, North Dakota, Wyoming and Mississippi with Hawaii and Alaska on the horizon.
Burwick adds: “As we’ve said from the beginning, our ultimate goal is to be aligned in one, consolidated distribution network. So far, we’ve had very amicable outcomes in multiple states across the country. We are thankful that our wholesalers are open to conversation and working through this process.
“Our co-workers are fully integrated across functions, including our sales team, which is aligned and supporting our full portfolio of brands,” the CEO continues. “When it comes to innovation, Dogfish Head and Samuel Adams brewers will continue collaborating like they have historically. The merger allows even more creativity and collaboration, and in the last year has resulted in several unique, limited-release brews like CollaBEEration, Toast & Prost and Utopias Barrel-Aged World Wide Stout.”
Broader ‘beyond beer’ offerings
Dogfish Head currently distributes about 20 beers and makes more than 100 different beers on its various brewing systems throughout the year. “Off-centered IPAs and sours are our meat and potatoes,” Calagione says. “There are lots of rewarding and creative innovations in process. We are completing a $3 million expansion of our distillery right now, so look for more off-centered products coming out of the distillery world in addition to beers.”
As a singular entity, Boston Beer Co. is poised to continue double-digit growth in a flat market. Burwick points out that the company’s portfolio continues to keep pace with consumer’s thirst for beer and “beyond beer” offerings including hard seltzers, hard ciders, hard teas and its new lineup that launched in January: Truly Lemonade Hard Seltzer.
Truly Lemonade Hard Seltzer is a 5 percent alcohol-by-volume (ABV) mix of hard seltzer and lemonade made with real lemon juice to deliver the taste of hard seltzer with a bolder, sweeter lemonade profile with just 1 gram of sugar, no artificial flavors and 100 calories, the company says. Truly Lemonade Hard Seltzer is available nationwide in 12-ounce slim cans in a 12-pack variety pack in Original Lemonade, Black Cherry Lemonade, Mango Lemonade and Strawberry Lemonade flavors.
Additionally, all 13 of Truly Hard Seltzer’s flavors, including Black Cherry, Passionfruit, Watermelon Kiwi, and Raspberry Lime, recently were optimized to deliver crisper, more refreshing flavors, the company says.
With new flavors and brand lineups in the pipeline for The Boston Beer Co. and Dogfish Head, Burwick notes that finding the white space in the market has proven to be an exciting challenge for its new group.
“We know that today’s drinkers crave variety and prefer a broad repertoire of beer and beyond beer beverages, and having a diverse portfolio allows us to satisfy that demand by innovating across beverage categories,” Burwick says. “In fact, with Jim, Sam and our brewing teams, we believe we are the best innovators in the beer business — and our track record proves that out.
“We believe that a great idea can come from anyone and anywhere,” Burwick concludes. “With the addition of our Dogfish Head co-workers, we have even more brainpower and experience to foster collaboration and innovation across our network. Together, as one company, we have the most diverse, distinct, quality-oriented American-owned platform for craft beer and beyond.” BI
THE BOSTON BEER CO.
Headquarters: Boston and Dogfish Head, Milton, Del.
Merged with Dogfish Head: 2019
Net revenue: $1.25 million
Number of barrels: 5.3 million barrels, 2019
Number of brand families: 10, featuring Samuel Adams, Twisted Tea, Truly Hard Seltzer, Angry Orchard, Dogfish Head, Wild Leaf, Tura, Angel City Brewery, Concrete Beach and Coney Island Brewing Co.
Distribution: Nationwide with international reach in Canada, Europe, Israel, Australia, New Zealand, the Caribbean, the Pacific Rim, Mexico, and Central and South America