I was all set to write about rock stars. Live music and beer are closely associated, and there’s a growing trend of musical acts and brewers teaming up to riff on their mutual affinity in liquid form. However, it now seems brewery owners are spending more time with their P-and-L sheets than with their record collections. Just two days after interviewing Dogfish Head founder Sam Calagione about his brewery’s numerous music-related collaborations, news broke that Dogfish Head had merged with Boston Beer Co. in a $300 million deal. Record scratch.
Dogfish Head is one of America’s OG craft brewers, and Calagione single-handedly defined the persona of celebrity craft brewer—the rock stars of the beer world. He’s starred in television shows and documentaries about his brewery and about craft beer; Dogfish Head scored a genre-defining early hit with 60 Minute IPA and is known for its extreme one-offs; and Calagione was even in an actual band, the Pain Relievaz. So is Dogfish Head selling out?
I don’t think so, and here’s why: This isn’t AB InBev or Constellation Brands we’re talking about. This is Boston Beer Co. This is Sam Adams. This is Jim “Mr. Denim-Shirt-and-Khakis” Koch, the kindly rich uncle who tells stories about his early days selling beer made from his great-great-grandfather’s recipe out of the trunk of his car. Never mind that adjustments the Brewers Association has made to its definition of “craft brewer” regarding maximum allowed production volume have conveniently kept Boston Beer Co. in the fold. It’s about independent ownership and intent, not about how much beer you’re lucky enough to sell. And Boston Beer Co. sells a lot of beer, just not as much as it used to.
To compensate, the company has diversified and capitalized on changing market trends. Twisted Tea, Angry Orchard Hard Cider, and Truly Spiked & Sparkling are all top-selling brands. Boston Beer Co.’s network of distributors and wholesalers is also mighty. This is an outfit that knows how to press a hit and get it into the public’s hands, efficiently and economically. If Dogfish Head can align itself with that kind of clout—especially amid an uncertain future fraught with fickle consumer tastes, industry consolidation, and slowed growth—then get on board. As Calagione said in announcing the news, “together we’ll be really heavy.”
From the terms outlined in the deal, this isn’t a straight-up acquisition. Sam and Mariah Calagione, co-founders in Dogfish Head, will receive about 406,000 shares of Boston Beer Co. stock (valued at about $314.60 per share), becoming the largest non-institutional shareholders in the company behind Koch. Sam Calagione will also assume a seat on Boston Beer Co.’s board of directors beginning in 2020. Both breweries will maintain their individual identities and output, as well as their indie cred. At least on paper, it’s more like the coming together of two like-minded artists in a mutually beneficial agreement—like an ongoing collaboration.
Speaking of collaborations, Calagione did drop one nugget during our earlier conversation that applies as much to business deals as it does to rock stars.
“One thing we’ve learned is that, regardless of the stature or the recognition of the artist globally, scale has nothing to do with how we qualify success in the context of a collaboration,” he said. “Most important to us is that it’s truly an equitable, collaborative process—that there’s equal input.”