Boston Beer Company, INC
Nicole Gassett
Alex Pagliuca
Steve Burke
Brian Pereira
Rob Leaver
Background of Samuel Adams
• Samuel Adams Beer Company was started by Jim
Koch. He was the son of a fifth generation beer
brewer.
• This company is headquartered in Boston,
Massachusetts.
• They manufacture 17 unique, award-winning beer
brews.
Financial Highlights
2006 Revenues$315,250
Increase - 19.7%
2005 Revenues$263,255
Increase- 9.8%
2004 Revenue$239,680
2006 Net Income$18,192
Increase- 16.9%
2005 Net Income$15,559
Increase- 24.4%
2004 Net Income$12,502
2006 Barrels Sold1612
Increase -18.2%
100% of Net Revenue
2005 Barrels Sold1364
Increase-7.6%
100% of Net Revenue
2004 Barrels Sold1267
100% of Net Revenue
Competitor Comparison
Samuel Adams
Anheuser-Busch
ROA – 11.8 %
Net Profit Margin – 5.8%
Current Ratio – 295%
ROA – 12%
Net Profit Margin – 10%
Current Ratio – 81.5 %
Current Assets-120,562/Current Liab.-40,870
Current Assets-1829.5/Current Liab.-2246.1
Debt-to-Assets – 29.7%
Total Assets Turnover - 204.1%
Debt-to-Assets – 75.3%
Total Assets Turnover – 109.7%
1st Recommendation
• Problem: 21-27 year olds consider Samuel
Adams to be their “Father’s Beer”.
– Purchasing new creations such as Fat Tire and
Magic Hat or imported beer
• Resolution: Creating a new label for the
younger age demographic (21-27)
2nd Recommendation
• Problem: Samuel Adams is considered a smaller
company and does not have the same leverage as
their larger competitors.
• Resolution: Samuel Adams would be an excellent
acquisition for a larger company.
– Craft brewing is a growing section of the industry.
– Experienced and innovative brewers who would provide
value to another company
Friendly Acquisition
Who Should Acquire Samuel Adams?
-Miller Brewing Company
-Miller is owned by SAB Miller which has breweries or brewing interests in
over 60 Countries Across six Continents and is one of the worlds leading
brewers
-Relationship already existent from non-owned breweries
-More Market Share
-Better to do this before another company like Anheuser-Busch or a larger
import beer company
Downsides
-SAB Miller produces many import beers that are already in
Better Beer Category (Pilsner Urquell, Peroni Nastro)They would almost be competing with themselves
-Samuel Adams is liked by many for having a small company
feel
-Great current management that is growing the brand
Porter’s 5 Analysis
• Threat of New Entrants
– Very easy for market entry
– Competition from smaller up and coming businesses
– Hard for new entrants to differentiate their product
• Bargaining Power of Suppliers
– Very dependent on suppliers
– High switching costs when moving to a new supplier
• Ensuring quality standards are met
Porter’s 5 Analysis (Cont.)
• Bargaining Power of Buyers
– Large store buyers are the businesses with the bargaining
power.
– Buyers do not understand the quality of the beverage.
• Threat of Substitute Products
– Substitute products could entail wine and hard liquor
– Soft drinks or water could also be a substitute
• Intensity of Rivalry Among Competitors
– Largest indirect competitor is Anheuser-Busch
– Small micro-breweries to large international companies can
be competitors.
P.E.S.T.D.C. Analysis
•
•
•
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Political/Legal
Economic/Environment
Social
Technology
Value Chain Analysis
• Primary Activities
Inbound Logistics- Beer is brewed in either the company’s owned or
non-owned Breweries, with certain Breweries set up for
certain functions
Outbound Logistics- No internal distribution/Use third party to
distribute product
Marketing/Sales-Lot of focus on quality marketing as well
trained sales force to sell product
Value Chain Analysis
• Support Activities
Procurement-Choose high quality ingredients to ensure higher
quality end result. Heavy reliance on this process.
Technological-Their brewery based out of Boston is set up
specifically for creating new products
-$2.3 million put into Cincinnati Brewery to help
improve efficiency and try to produce 40-50% of total
volume at this brewery
Infrastructure-Very strong management with a good understanding
for competition and staying on top of industry
Resources
• Tangible:
Financial
Physical
Organizational
Technological
•Intangible:
Human Resources
Reputational Resources
Innovation Resources
Core Competencies
• Innovation
• Sales
• Marketing
S.W.O.T Analysis
Strengths
•Product innovation
•Marketing ability
•Craft brewers have had continuous
growth over the past three years
•Tight control of independent brewers
•Awards for product quality
Weaknesses
•Leveraging ability—size
•Larger company could acquire
•Reliance on non-owned breweries
•Dependent on distributors
•Dependence on suppliers
Opportunities
•Growing industry for specialized beers
which is 18% of consumption
•Global markets in Canada, Europe,
Caribbean, and Pacific Rim Islands
• Increase market share
•Purchase suppliers to protect their
interests
Threats
•Could become appealing for an
acquisition
•Highly competitive market
Current Strategies
• Extreme Beer
• Competition with sherry, cognac, and port.
• Samuel Adams & Chef David Burke join
forces.
Timeline
• 1970—Jim Koch created his first brew and started selling it
door to door.
• 1984—Koch decided to start making a “better beer”. Only
competition was from imported beer.
• 1985—Samuel Adams Boston Lager made its “official
debut.
• 1988—Increased market share and sales were at 36,000
barrels a year. Built first brewery in Boston.
• 1995—Continued to introduce new flavors without losing
the quality of the beer.
• Today—They have 17 different beer flavors and sold across
the country as well as in 20 countries.