USA: Boston Beer Co. may lose status as 'craft brewer'

Boston Beer Company, currently listed as second largest craft brewery in the US (behind D. G. Yuengling and Son), which is known for its flagship brand Samuel Adams Boston Lager,  might soon disappear from the Brewers Association (BA) list of US craft breweries. The reason is not a declining market share, which is also the case, but the BA’s standards to qualify as a craft brewery.

According to BA’s definition, a “craft” brewer “has a majority of its total beverage alcohol volume” produced in beer, that is to say at least 50%. In 2016, Boston Beer Co.’s share of beer of the total production was only 57%, which means a sharp drop from the 89% six years ago.

Boston Beer Co. became a catalyst of the American craft beer revolution, making its public debut in Boston on Patriot's Day in April 1985. Since then the company has shown impressive growth which slowed down in recent years when more and more new breweries entered the market. In order to keep the pace of growth, Boston Beer Company tried to diversify its portfolio of products, introducing cider and flavored malt beverages in the last seven years.

Since 2014, when Boston Beer Co. hit a peak with an estimated beer production of 2.55 million barrels (3 million hl), beer volume sale declined and will most probably reach a new low of about 2,15 million barrels (2,6 million hl) in 2017.

Declining sales across various Sam Adams brands accounted last year for a 7% drop in dollar sales . For the first few months of 2017, Nielsen is tracking the entire Sam Adams franchise as down 20%. This week Boston Beer Co.’s co-founder and chairman Jim Koch and his team will present their Q1 earnings report, which is expected to confirm the negative trend of last year.

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