|The Sam Adams Awaits!|
Every year the analysts at Barclays invite some of the leading consumer products companies to Boston to give presentations and updates on their business. I have had the chance to hear from executives from Colgate; Procter & Gamble; and Kraft, among others.
However, one of my favorite talks occurred at the end of yesterday's session. Boston Beer founder Jim Koch (pronounced "cook") gave a talk about the company he started 30 years.
You may have even tasted his flagship product: Sam Adams beer.
The craft beer industry has been booming for the past few years. According to Koch, almost 24% of the beer sold in the United States is craft beer brewed mostly by small brewers. Only 26% of beer sales in the U.S. are the so-called mass marketed brands such as Budweiser and Miller High Life. The rest of the beer sales in the U.S. are light beers.
I remember when Koch started the company in 1984. His father and grandfather had both been master brewers. He started his career with the Boston Consulting Group, but soon saw an opportunity in manufacturing a more flavorful ale in the European tradition. He originally brewed his beer in Pittsburgh, but eventually moved operations back to New England.
Koch went from bar to bar in the Boston area, trying to convince owners to carry his product. One of his biggest challenges, as you might expect, was avoiding becoming inebriated, and not gaining weight.
The rest, as they say, is history. Sam Adams is the largest craft beer in its category, even though it only has a 1% market share of the U.S. beer market.
Yesterday was not the first time that I have seen Koch's presentation, but I always enjoy hearing his updates.
There are several things that make Koch's discussion stand out from most of the other conference presenters. Most notable, however, is that he starts out his talk by pouring a beer, and toasting the audience. As he said, "I am glad to see such a large crowd - I hate to drink alone!"
But don't believe for a minute that he is not one smart businessman. He may stand at the podium sipping a beer and sounding like he is holding court at the local bar, but his stock (and his personal fortune) have been home runs:
It is estimated that Koch's share is now worth in excess of $500 million - not bad for a small brewery.
After Koch made his comments, attendees were invited to go to the back of the room and sample a Sam Adams. Judging from the crowd in the room, and the happy tenor of the "after party", Koch (and Sam Adams) was a big hit.