Case 46 Boston Beer

The Boston Beer Company along with its subsidiaries is involved in the production and selling of alcoholic beverages mainly in the USA and in select international markets. The Boston Beer operates under different trade names such as “the Boston Beer Company®,” “Twisted Tea Brewing Company®,” “Hard Seltzer Beverage Company,” “Angry Orchard® Cider Company,” “Dogfish Head® Craft Brewery,” “Dogfish Head Distilling Co.,” “Angel City® Brewing Company,” “Coney Island® Brewing Company,” and “Bevy Long Drink Co.” The company produces alcoholic beverages such as hard seltzer, malt beverages, and hard cider. These products are produced in company-owned breweries and its cidery and through contract arrangements at other brewery locations. The company’s four primary owned breweries are located in Boston, Massachusetts, Ohio, Delaware, and Pennsylvania. The company also produces distilled spirits and spirits based ready-to-drink beverages in small quantity. The company also owns five smaller local breweries which focuses on brewing and packaging beers for retail sales. Boston Beer’s hard seltzers, beers, and hard ciders are basically positioned as high-end category characterized by higher price, quality, image, and taste compared to regular domestic beer. Boston Beer is one of the largest suppliers in the high-end category in the USA. The market share of high-end category is approximately 38% in the beer market, and the company has 11% market share in the high-end category. The value chain of Boston Beer expands from a network of 150 suppliers to millions of consumers around the world. The network of distributors includes more than 400 US wholesalers and group of foreign wholesalers who sell the products to retailers. The company has more than 70 third-party logistics partners which transport the products to retail customers through road, rail, and intermodal transport methods. The company also has contract manufacturing agreements with third-party breweries and packaging facilities. The total cumulative monthly return for Boston Beer stock was 131% compared to the cumulative returns of 41% for market index S&P 500 Beverages Index during the period March 2018–Jan 2023.