On May 9th Sam Calagione, founder of Dogfish Head brewery, announced on the company blog that Dogfish Head and the Boston Beer company would be merging, believing it would create a stronger advocate for the independent craft beer industry. The Boston Beer Co. shared a photo of Sam Calagione and Boston Beer founder Jim Koch with their Twitter followers, tweeting they were “thrilled to announce” joining forces.
“We believe we are creating the most dynamic and diverse American-owned platform for craft beer and beyond.” – Jim Koch
Things are brewing between us & our friends at Boston Beer! To all of you who have reached out w/ a hardy cheers, we thank you! We also understand that many of you may have questions. Check out https://t.co/Tl8gwDlvwG for words from our co-founders Sam & Mariah! @SamuelAdamsBeer pic.twitter.com/954VXNafBY
— Dogfish Head Brewery (@dogfishbeer) May 10, 2019
Both Jim Koch and Sam Calagione made a joint announcement with Beeradvocate that further explained the goal of the merger of these two historic craft beer breweries. Both breweries have been involved in the growth of the craft beer industry in the US, helping define what craft beer is and promoting the success of independent brewers. They explained the goal of the merger was to create an advocate for craft beer that would produce “the strongest portfolio of high-end craft and beyond beer brands in the industry.”
According to Brewbound, the merger is valued at $300 million. Dogfish Head cofounders Sam and Mariah Calagione get 406,000 shares of Boston Beer stock ($314.60 per share), and beginning in 2020 Sam will take a seat on Boston Beer’s board of directors. Dogfish shareholders will get $173 Million in cash.
The announcement was met with mixed reactions from the craft beer community. Many Dogfish fans were shocked at the merger announcement. To fans, Dogfish has always represented the passionate and independent spirit of craft beer. Dogfish’s Tweet left many disappointed at the news of the merger.
Hope this is a joke. A collaboration would be cool not a merger
— Jesse Van Meter (@joeykookamyer) May 9, 2019
Checking my calendar to see if this is April Fools’ Day. Nope.
— Jack Reid (@jereid27) May 9, 2019
Others were more hopeful, believing it was a plus for Dogfish distribution. Dogfish will keep its name and continue to operate as a craft brewery.
Buncha dummies in this thread. They’re retaining their name and their beers. For DHB is move for distribution/supply chain power. For BBC, they add to their portfolio. Got it? Now relax and go have a beer, jeesh
— G. Gordon Litty (@Box_of_Joe) May 9, 2019
There are a number of craft beer breweries that have had success with mergers. In 2015 Duvel Moortgat and Firestone Walker breweries combined their US operations. Both were successful breweries with signature craft beers but felt a merger would strengthen distribution.
Even then, mergers in the craft beer industry made craft beer drinkers nervous, especially when macro brewers like Anheuser-Bush and MillerCoors had been buying craft breweries for several years. However, supporters believe that for the industry to grow, partnerships like these are inevitable. It is much better to have mergers and partnerships within the independent craft beer community than for AB and MillerCoors to continue to buy up breweries.
Mergers are done to bring in directly complimentary products, not cannibalize them. This combines distribution power and integrates supply chains. They stick with their word and operate as essentially two spearate business units, this will be fine.
— Michael Bailey (@mjb34500) May 10, 2019
At the end of the day, we hope for the best. Which is a stronger, growing craft beer industry that maintains the core values and culture craft beer drinkers know and love. Cheers!