Does Size Matter – Contemplating the Growth of Sam Adams

A recent article in the New York Times about the growth of Sam Adams has got me thinking. What is a craft brewer? And does size matter?

As the article states, Sam Adams is on the verge of growing beyond the legal and industry definitions of “craft brewer.” The federal government defines a small brewery as one that produces less than two-million barrels annually. A lower excise tax is levied on brewers who meet this criterion. Similarly, the two-million barrel limit is part of the Brewers Association (BA) definition of “craft brewer.” Sam Adams is set to exceed this mark by 2012.

But there is much more to the Brewers Association definition than annual output volumes. Besides being small, says the BA website, a craft brewer is “traditional” and “independent.” What is meant by these labels? According to the BA, a traditional brewer is one that “has either an all malt flagship (the beer which represents the greatest volume among that brewers brands) or has at least 50% of its volume in either all malt beers or in beers which use adjuncts to enhance rather than lighten flavor.” This is clearly an attempt to differentiate craft brewers from the large brewing concerns that use high percentages of corn and rice adjuncts in the production of light lagers. Sam Adams certainly meets this standard.

An independent brewery, the site states, has less than twenty-five percent ownership in the hands of an alcoholic beverage industry member who is not themselves a craft brewer.  As a publicly owned company with 71% of shares held by institutions according to Yahoo, it is conceivable to me that Sam Adams would not be considered independent. But the BA limits this ownership restriction to alcoholic beverage industry members. Sam Adams can slip by on this one. But does the recent sale of the Anchor Brewery to the Griffin Group, an investment and consulting firm focused on alcoholic beverages, defy the restriction? Is Anchor no longer independent and therefore no longer craft? And what of the other once small and independent breweries that have been bought by the big boys. I’m thinking of breweries like Red Hook. Making no claims about Red Hook beers, assuming that these breweries’ beers retains their quality, have they stopped being craft brewers?

There is more to the Brewers Association definition. The website states that a “hallmark of craft beer and craft brewers is innovation. Craft brewers interpret historic styles with unique twists and develop new styles that have no precedent.” By my count, Sam Adams currently has thirty-three beers in their repertoire. These include unique interpretations of traditional styles, barrel-aged, sour, and imperialized beers. They invented the extreme beer genre in the 1990s with Triple Bock and have continued to push boundaries with Utopias. By the standard of innovation, Sam Adams is clearly craft.

The BA also says of craft brewers that they “tend to be very involved in their communities through philanthropy, product donations, volunteerism, and sponsorship of events.” How does Sam Adams stack up? They sponsor the Brewing the American Dream program to provide lower income entrepreneurs with support and advice in getting fledgling business off the ground. They sponsor the annual Longshot Competition that gives homebrewers a chance to have their creations produced and sold commercially by Sam Adams. Then there is the famous story of them selling hops at cost to struggling small breweries during the recent worldwide hop shortage. Other efforts listed on the Sam Adams website include work with the Leary Firefighters Foundation, the Hands on Network, the Sean McDonough Foundation, and the Neely Foundation. I would say this shows significant community involvement. Does this make Sam Adams craft?

Perhaps the most important part of the BA definition of craft brewer is integrity. The website states that craft brewers “maintain integrity in what they brew.” Despite their size, and despite brewing in multiple locations, Sam Adams brews to high standards.  Boston Lager is the same flavorful beer it was when it was a groundbreaker in the microbrew revolution during the 1980s. With some hits and misses, their beers stand up in terms of flavor and quality to most other craft breweries, though some will dispute this. Sam Adams has been slammed by some for selling-out with Sam Adams Light, but even this beer, when tasted side-by-side with the light products of the behemoth brewers, is brewed with greater care and character. And as a publicly owned company they do have an obligation to shareholders to maintain and grow the bottom line. Does providing for shareholders rob Sam Adams of too much integrity for them to remain craft? If so shouldn’t we hold the entirety of our publicly owned corporations to the same standards?

All of this leads me to one thought. As the craft beer industry grows, our beloved small breweries will unavoidably grow with it. It’s already happening. Once tiny businesses like Sam Adams and New Belgium have expanded to become regional and even national powerhouses. Stone Brewing is actively seeking a location in Europe, making them perhaps the first multinational American craft brewer. In the face of this growth how will craft beer drinkers respond? Will be embrace and encourage it? Will we rejoice in the success of our favorite brewers and commend them for spreading great beer to ever wider audiences? Or will our desire to retain the boutique mystique of the small lead us to reject them for becoming “like the macros”, an argument that I have already heard levied against Sam Adams and New Belgium.

How do we want to define “craft?” Is it a matter of numbers of barrels produced in a year? Or does it have more to do with the quality of the product. When the macro brewers start making good beer, which they are already doing, are these well-crafted beers somehow less craft than those made by smaller brewers? In short, does size matter?

2 thoughts on “Does Size Matter – Contemplating the Growth of Sam Adams

  1. The BA definition of craft is, ultimately, based on taxation limitations, so it’s a hard one to go by. There are a lot of small brewers that don’t qualify as craft: Ommegang, Goose Island, Widmer, etc., Defining beer by its quality is next to impossible because of the subjectivity of the definition.

    Like pornography: I know it when I see it.

    Interestingly, I wrote my own article about this about Sam Adams a year ago.

    And here’s some more food for thought about the definition of craft.

  2. Pingback: Macro Alternate Reality | Brews and Books

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