Boston Beer Co. has been the consistent flagship brewer since craft beer stats started being compiled. As the brewer and its Sam Adams brand soared in popularity and sales, the craft beer industry marker group, Brewers Association, had to up its production definition of craft beer to continue inclusion of Boston Beer.
There were no complaints, Boston Beer Co. founder Jim Koch is among the genuine figureheads of craft brewing and despite the growth, has continued to meet the BA definition of a craft brewer – keeping ownership close to the vest. Simply, BA’s definition says a craft brewer must be small, independent and traditional. “Small” is defined by production – now set at 6 million barrels per year.
As craft beer has grown in number of breweries – there are now more than 3,400 U.S. brewers. That number grew nearly 1,000 between 2012 and 2014. Craft beer commanded 11 percent of the overall U.S. market in 2014 – the most year of stats available. That up considerably from just a few years ago, but even with a gain in market share all of those craft brewers are now scrambling to distinguish themselves from one another.
Some have pulled in distribution and seem to going for a majority share of a regional market and development of alternate revenue streams – like food sales, entertainment venues and introduction of craft spirits or other brewery-branded food and beverage items.
For Boston Beer Co. innovation has been the strategy. The brewer has introduced a steady stream of specialty beers over the past several years. Now, it is embracing nitro packaging in hopes of getting the attention – and the devotion – of craft beer aficionados.
Three nitro-packed 15 oz. aluminum cans are rolling out now: Nitro White Ale, Nitro IPA and Nitro Coffee Stout. Boston Beer Co. has tapped technology from Ball Corp. for it nitro widget, a cylinder-shaped fixture (a nitrogenator) in the bottom of each can that packs a blend of 75 percent nitrogen and 25 percent CO2.
Properly enjoying a nitro beer takes some sense of urgency. Pop the top and there is a rush of nitrogen. Quickly pour the beer into the center of a glass. The dissipation of nitrogen rises up, creating a dense, creamy head with draft-like character.
How is the beer?
I tried a Nitro White Ale first and was impressed with the pour and the creamy texture and mouthfeel of the beer. The beer is nicely balanced and imminently drinkable, but comes up light on the traditional White Ale flavors of Coriander and orange peel. The 505 ABV ale does deliver subtle hints of citrus and pepper – and I will certainly revisit this beer.
I could not find a Nitro IPA – 7.5 BAV – which boasts a six variety hops bill.
The Nitro Coffee Stout was right down my alley – and is a beautiful pour from the nitro can. The 5.8 percent ABV brew uses dark roasted malts to develop notes of bittersweet chocolate with hints of dark fruit. The company says Sumatran Mandheling and Indian Monsoon Malabar coffee are blended in to create a deep roast dimension to the brew.
Will Nitro Pump Up Boston Beer Co.?
Time will tell if this strategy will pay off for Boston Beer Co. Left Hand Brewing in Longmont, CO, had dominated the nitro field initially with its wildly popular Left Hand Milk Stout Nitro. Other brewers are jumping on the nitro train as well. Even with that, the huge resources and national distribution model of Boston Beer Co. has positioned itself well ahead of the pack bent on delivering a draft-like experience to craft beer fans.
It may be the bump that perpetually optimistic Koch needs to overcome a rocky fourth quarter that put the brakes on a steady growth trend. For the year just ended, 4.2 million barrels shipped (up 4 percent). Net revenues also dipped one percent during the quarter, to $215.1 million, the company said in an earnings announcement.
Citing declines across its Samuel Adams and Angry Orchard brands, total Boston Beer shipments also decreased 3 percent during the fourth quarter, to 958,000 barrels. Those declines were partially offset by growth across its Coney Island, Twisted Tea, and Traveler brands, the company said. Despite the slowdown, Boston Beer increased revenues six percent in 2015 to more than $1 billion.
“We believe we have lost share, as new craft brewers enter the market and more existing craft brewers are expanding their regional distribution, with the result that drinkers are seeing more choices, including a wave of new beers in all markets,” Koch said.
Koch added that Boston Beer would attempt to remain competitive in an increasingly saturated market by offering new styles underneath the Samuel Adams brand — including the line of canned nitro beers and a grapefruit flavored version of its popular Rebel IPA.
According to CEO Martin Roper, Angry Orchard’s declines reflected slower growth for the entire cider category, even as more companies continue to enter the market.
“The category has some fundamentally appealing aspects to it both from coming from apples and being gluten free, apart from tasting good,” Roper said in a call to investors. “We’re still positive we think we’re seeing sort of the trial balloon bursting a little bit.”
About Boston Beer Co.
The Boston Beer Company, Inc. (NYSE: SAM) began in 1984 and today brews more than 60 styles of Samuel Adams beer. Its portfolio of brands also includes Angry Orchard Hard Cider and Twisted Tea, as well as several other craft beer brands brewed by Alchemy & Science, its craft beer incubator. For more information, visit www.bostonbeer.com, which includes links to its respective brand websites.