You’ve spent the better half of 25 years building a company from scratch. After years of hard work and dedication you accomplished remarkable things and built an entire new category that others follow with you. Every step of the way you were an underdog who stuck it to the establishment. And you were successful.
What if that very success was going to be your downfall? What if you’ve become the establishment?
Such distress is what The Boston Beer Company’s founder Jim Koch must feel like as he walks into a grocery store and witnesses the vice Samuel Adams, his pride and joy, is in. In front of him are 20 consumers reaching for a 6-pack of Miller Lite because it’s cheaper and 20 others reading the label of the newest DogFish Head seasonal brew because it is “craft authentic.”
Growth and prestige right now is in hyper-local craft labels, but with its succes, Samuel Adams (which is really the original craft brew) has grown far too big to be considered part of that same family. Herein lies the precarious situation: sales are flat, volume is down and for the first time in a long time its growth is well below both domestic light beers it has been competing against and the craft brews it helped create.
As evidenced below, the graph measures Sam Adams volume (red columns) against its volume growth rate and compares that to the volume growth of the Domestic Super Premium/Craft Brew and Light Beer segments. You’ll notice that after a great run, in 2009 the bottom fell out.
What’s the solution? According to Sam Adams new TV – be big, but not that big.
The new TV ad titled “growing up small” touts the company as the biggest of the small guys, taking a complete 180* turn from its recent plans to stone the giants.
Now, its trying to skip school with the cool kids. On the website the message adds: “Although Samuel Adams is currently the largest American owned brewery, we only represent less than 1% of the U.S. beer market but are also the leader in the craft brewing industry.” Hey, we’re big, but we’re not that big.
From the numbers it’s clear that Sam Adams is stuck in the middle with both sides acting as a vice, and the by my guess the trends are showing Sam Adams’ leadership that the bigger danger is coming from the companies it didn’t even know existed 5 years ago.
Given the facts, acting smaller (and stopping banging its head against the big boys) might just be the right way to go. Given that we are in an age of transparency and authenticity, I just don’t know if anyone is going to believe it. Looking forward to updating this chart next year to see how it all plays out.
…the irony…Check out this picture from a restaurant in Downtown Chicago.