USA: Boston Beer’s exotic Utopias beers not helping the company out of its predicament
Boston Beer founder and Chairman Jim Koch is both one of the brewer's greatest assets and also one of its biggest liabilities. His love of craft beer is evident in his willingness to use the best, sometimes most expensive ingredients to create great-tasting beverages, but his inability to stay focused seemingly keeps Boston Beer from being able to turn its business around, The Motley Fool reported on November 25.
The introduction of the 10th edition of Samuel Adams Utopias is a case in point. A high-end beer that's only brewed every other year, it challenges the notion of what a beer can become. It's more like a fine liqueur, and at $200 a bottle is not something everyone can afford. Or get their hands on. Only 13,000 bottles of Utopias are expected to hit the shelves 2017, and they typically sell out right away.
One of the more notable features of the Utopias is their alcohol content, which clocks in at 28% by volume and makes it illegal in about a dozen or more states. To put that into context, Anheuser-Busch InBev's Budweiser is 5% ABV, the same as Samuel Adams Boston Lager, while wine can run around 11% ABV. Mead can be as high as 20%, though is often less, and liquor will put you into the mid-30% range.
Samuel Adams Utopias begin with a special blend of two-row pale malt and Munich and Caramel 60 malts to which three varieties of German Noble hops -- Spalt Spalter, Hallertau Mittelfrueh, and Tettnang Tettnanger - are added. Then both champagne yeast and a high-alcohol-tolerant "ninja yeast" are used to ferment this beast of a brew, followed by barrel-aging in single-use bourbon casks. The resulting beverage is "reminiscent of a rich vintage Port, old Cognac, or fine Sherry."
This is obviously a labor of love from a master brewer and shows the kind of dedication Koch brings to the craft. As Koch himself noted in a statement announcing the release of what he calls "the lunatic fringe" of brewing, Utopia's purpose "was to push the boundaries of craft beer by brewing an extreme beer that was unlike anything any brewer had conceived."
It's also a silly, quixotic romp that does absolutely nothing to correct the very many real problems Boston Beer is currently facing.
Revenue in the third quarter was down 3% as depletions, or shipments to distributors and retailers, fell 3.5%, The primary reason is the decline of its flagship brand, Samuel Adams, which has suffered through nearly three straight years of falling depletions, which is often viewed as an industry proxy for demand.
Recently Boston Beer announced it was introducing several new beers, a newly concocted blend of an ale and a lager, called Sam '76, and its own version of a New England IPA, a beer style that's suddenly become trendy.
The problem is the beers are simply derivative of things other brewers are doing and not innovative enough to make beer drinkers notice Samuel Adams. Without question, Boston Beer has garnered a lot of media attention with the release of Samuel Adams Utopias, but it's not the kind of development that's going to help the business. It's sizzle with no steak, or perhaps more aptly, all foam and no beer. It's not going to get people drinking Samuel Adams again, however creative and off the charts this line of beer is.
And that's why Koch may be Boston Beer's biggest problem. For all the craftsmanship he brings to the brewery, he's equally as interested in this esoterica as he is in righting the brand, and the brewery needs all of its attention focused on moving more barrels. Instead of me-too brews like the New England IPA or the rarefied Utopias, Koch should put his many talents to crafting a Samuel Adams beer more of the masses want to drink.
There may be nothing Boston Beer can do to change the trajectory the brewery has been on, at least not until there is a shakeout in the industry. There are more than 5,000 craft breweries in operation today, taking shelf space from Samuel Adams and clamoring for the attention of increasingly disloyal beer drinkers who are forever on the hunt for the new, new thing.
Samuel Adams Utopias are a different brew altogether, and as much of a novelty as they are and however bright the spotlight they briefly shine on the brewer, they're not doing anything to help Boston Beer out of its predicament.
30 November, 2017
