Is Boston Beer Doomed?

Old-timey.

I've got my nose deep into a long-form piece today, and so I'm outsourcing content to The Motley Fool, which paints a grim picture of the country's largest craft brewery.

The bulk of Boston Beer's sales come from the Samuel Adams line of beer, and those have been declining. The company's Angry Orchard cider and Traveler beer brands were also down in the quarter, only partially offset by sales increases in Twisted Tea, Coney Island beer, and Truly Spiked and Sparkling....

Still clinging to its craft tradition, the company has chosen to primarily develop new offerings in-house through its Science and Alchemy division. Its most recent launch was a spiked sparkling water-flavored beverage. Sam Adams also recently released its Rebel IPA and Nitro projects, but none has been enough to restore the company to growth....

The company's internal efforts to generate growth aren't keeping up. I can understand the desire to stay true to the craft roots, but the company opted to play the perpetual growth game and went public. Shareholders demand profitable growth. It might be time to purchase a small rival brewer or two and plug them into the existing Sam Adams family.

Of all the larger craft breweries, Boston Beer seems to be in the weakest position. A decade ago and more it was lauded for innovation, but that era has long passed. Crappy, brand-eroding flavored malt beverages have distracted the company from its core competency (beer), and owner Jim Koch's commitment to amber lager in an IPA era does not inspire confidence that it will be relevant again anytime soon. I disagree with the Motley Fool on the direction it should take, though. Boston Beer doesn't have the money to compete in the acquisitions game with ABI and MillerCoors. It needs to rehabilitate and extend its own brand and figure out a way to freshen up Boston Lager. And it should definitely quit trying to come up with crappy side products.

Boston Beer looked like a titan as recently as a couple years ago, but it's in real trouble now. It never developed a strategy to compete against smaller, boutique breweries in terms of innovation and quality, nor does it appear prepared to battle the new wave of ABI- and MillerCoors-owned "craft" brands, which are going to be making extremely aggressive efforts to establish their national presence. If I were on team Sam Adams, I'd be hitting the panic button, stat.

Hagiographies and Game Theory

I have two random little bits here that don't amount to posts by themselves--but with a bit of baling wire and a squint we can make them appear to demonstrate some larger point. Bear with me. (Don't you always?)

The first random bit comes from The Atlantic, in a post about elections and game theory by Andrew McGill. He uses the following example to describe the way delegates may behave in the GOP convention, but that's immaterial for our purposes. He writes:

In 1936, the economist John Maynard Keynes invented a beauty contest. In examining why stock prices fluctuate, he suggested the metaphor of a newspaper pageant, where readers select the six prettiest faces from 100 photographs. But only people who picked the most popular choices would win.

“It is not a case of choosing which, to the best of one’s judgment, are really the prettiest, nor even those which average opinion genuinely thinks are the prettiest,” he wrote. “We have reached the third degree where we devote our intelligences to anticipating what average opinion expects the average opinion to be.”

This got me thinking about my rumination on what makes a "great brewery." Whenever we're examining something largely subjective--the best Texas swing band, which color to paint the bedroom, breweries--we're always looking over our shoulder at what the gal next to us thinks. In matters of aesthetics the currency is taste, and nothing is ever so negotiable as that. So, like Keynes' pageant models, we tend to add the opinion of the masses into our calculation. In arenas like wine appreciation and art collecting, it's hard to see much driving prices except the view of the masses. We like to associate ourselves with admired things to burnish our own prestige, so it's easy to see how certain beers and breweries seem to enjoy a reputation not entirely consistent with their actual production.

Which brings me to the following video clip, which is "journalism" in its most fawning. The object of this piece is Jim Koch and Boston Beer, and I'm guessing the folks in Boston Cincinnati and Breinigsville are tickled to death. [Stan Hieronymus tells me, "Since Schaefer built it in 1972 - and when Stroh owned it and then Diageo - it has always been referred to as the Fogelsville plant," not Breinigsville.] They could hardly have produced a more hagy hagiography if they'd put this together themselves.

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And how does this clip relate to Keynes' beauty contest? Because breweries are spending increasingly more time trying to convince you that they are the Van Goghs and Cote de Nuits of the beer world. They know that to convince you they make the best beer is only a part of the battle; they also want you to think that's what everybody else believes. And getting CBS to do pieces like this is really, really valuable in that regard.

Sam is Dead in PDX

Good luck trying to find some Sam Adams Boston Lager in Portland. It's been a long time since I've bothered to look for any--I need it for symbolic purposes for a little party that begins this afternoon--and I had no idea what a rarity it has become.  The five sixers that constitute the usual stock at my local Fred Meyer* were long raided, and shoppers could not bring themselves to snag that last sixer of Sam Adams Light.  There were a few Rebel IPAs left--but as symbolism goes, "west-coast style IPA" doesn't really get it done.

Great beer selection; no Boston Lager. (source)

So off I went to Plaid Pantry**.  Apparently they don't stock it at all.  (Thirty brands of local beer, a few mass markets, but nothing from Boston Cincinnati. Then to Zupan's***.  Nyet.  Finally a hail Mary to Belmont Station, one of Portland's best bottle shops--and success!  Ordering maven Chris Ormand had the good sense to make sure some Boston Lager was on the shelves for just such an occasion.  I think there's something instructive in this story, but I'm not entirely sure what it is.  Just that, I suppose, a beer I thought was absolutely ubiquitous turns out not to be.  Good thing Jim Koch has that cider thing to fall back on.  Had I wanted a sixer of Angry Orchard, I could have gotten that anywhere.

_________________
*Fred Meyer ("Freddy's" to locals) is an old local supermarket chain.  It's owned by Kroger, but Fred Meyer was beloved to locals, and the home office--also in Cincinnati--made the wise decision to leave the name.  The stores are giant and have hundreds of beers and ciders for sale.

**Plaid Pantry is a local convenience-store chain

***Zupan's is a local high-end food market chain.  Also a huge selection of beer.  That we have so many weird local businesses is probably also instructive, but we'll leave that rumination for later.

Sam Adams Domain Transfer Party and Other Notes

As a denoument to the great Sam Adams Incident of 2007, KEX will be hosting a "domain transfer party" at the Pilsner Room on Tuesday, from 6:30 to 8. Something called "special Mark and Dave ale" will be served.

In addition, KEX writes:

• The infamous "LETTER" sold on E-Bay for $1475.90! (Jim Hopkins of Accent Verticals bought the now historic letter, and lunch with Commissioner Adams and Mark & Dave.) That's not all: Then the KEX General Manager Robert Dove matched it! Total: $2951.80! Wow! Every penny going to the KEX Kids Fund to buy hearing aids and glasses for needy children. Thank you for your support!
• Sam Adams will accept the new domains. Special Mark & Dave Ale will be served (proceeds to the Kid's Fund). Harborside serves Sam Adams Beer...Mmmm, should we pour it? You tell us, answer the poll below.

Finally, that poll mentioned in the second bullet about whether the Pilsner Room should be pouring Sam Adams beer: in a show of how good-hearted Portlanders are, 43% think it should.

Fake Content 'cause I'm Lame

Too busy to get to a real post today, so instead, I go back to the well and draw up the dregs of the Sam Adams story. Turns out the might Boston Beer company has issued a clarification. Hat tip to Michael at Witigonen for transcribing the .pdf (available here), and a hat tip to Brookston for finding the clarification in the first place:

The Boston Beer Company, brewer of Samuel Adams Boston Lager, wishes Portland City Commissioner Sam Adams the best of luck in his pursuit of higher office. And guess what – Samuel Adams Beer has in no way ever suggested that Sam Adams the candidate cannot use his own name. But, according to recent stories in the media, it sure hasn’t looked that way.

A little history: last week The Boston Beer Company learned that an individual named Dave Anderson of Portland, Oregon had registered two domain names that featured the name Sam Adams. Not knowing his intent, we sent him a letter asking him not to use these sites. Next thing we knew, we had a call from the legal department at broadcasting conglomerate, Clear Channel, at which point we learned that Dave Anderson is a DJ at Clear Channel’s KEX radio and that a man named Sam Adams was indeed running for Mayor of Portland. We wish we had learned a little more about Portland’s race for mayor before sending out that initial letter, and for that we apologize.

Why did we ask Clear Channel and Dave Anderson not to use those domain names? In the past we have experienced times when individuals and organizations have tried to use our brand name for commercial purposes or to disparage our good name. We have learned that, as a small company, we need to protect our identity. At the least we wanted to prevent a situation where people looking for our Web site end up linked to a radio station promotional site.

On the other hand, there have been occasions over the years when individuals actually named “Sam Adams” have registered domain names that included the words Sam Adams, and we have had no quarrel with that.

Similarly, we believe that Sam Adams, the mayoral candidate, has every bit as much right to use his name as we do. Our namesake, the patriot Samuel Adams, stood for public service and free speech, and we do too. We hope these URLs will, in fact, be transferred to candidate Sam Adams where they rightfully belong.

Candidate Sam Adams – shout your name from the rooftops and your Web site!

Well Beervanians, are you convinced?

Sam Adams Trademark Dispute: The Last Roundup

Hey, when something like this comes along, you gotta ride it as long as you can. (For those who are now long disinterested, I have a Green Dragon review in the hopper for later today.) So, where do we stand now?

It looks like Boston Beer has realized what a blunder it was sending out the letter (the original of which is now available on eBay.) The company's current line:

A spokeswoman for Boston Beer called the Law Blog and said they never had an issue with the mayoral candidate using his name but they do have an issue with the radio station using Sam Adams for its own business purposes.

A reader of Jack Bogdanski's blog actually got a reply from the company after shooting off an email. The company repeated the line above, but added (with appropriately increasing humility):

While we understand that kicking up a controversy makes good radio, I hope you'll understand that it was never our intent to thwart the efforts of Councilor Sam Adams in his run for Mayor. We have no issue with him using his own name. A more extensive Google search on our part for “Sam Adams Mayor” was in order and might have turned up information about the race for Mayor in Portland before we sent off that letter.

Google search--there's an idea. Jack adds: "People who brand their companies with a very, very, very common name have to live with the consequences. Letting supporters of a real politician named Sam Adams express their support for him with an appropriately named web domain or two is just something that Boston Beer is going to have to live with."

Meanwhile, an anemic internet petition is underway, unneccesarily.

From a more beery perspective, I've been interested to see that Bostonians aren't backing the home company. In fact, it looks like most Bostonians don't even regard Boston Beer as a native product--at least as far as blog commenters go, Sam Adams is a national beer they drink only when Harpoon's not available. It's not exactly a parallel, but Widmer suffers this perception locally, too. Interesting how a national profile hurts you among locals. Anyway, check out the commentary at Universal Hub, Bostonist (where the blogger described Sam Adams the candidate as "kinda dreamy"), Boston Herald (check the photo), and Boston Daily.

Finally, the Beer Advocate also has a discussion thread that gives you a sense of what the level of blowback is likely to be.

I'll only return to the story if something substantive actually happens.

The Sam Adams Cease and Desist Letter

A local radio station has posted the cease-and-desist letter sent to Portland mayoral candidate Sam Adams on his alleged "trademark infringement" in registering website addresses using his own name. It's a remarkable enough letter that I'm reposting it here, retyped verbatim, including the mispelling in the salutation. Thanks to 1190 KEX.

Mr. Andeson [sic],

We are the owners of the famous trademarks SAM ADAMS® and SAMUEL ADAMS®, and we write to you about a matter of serious concern arising from your registration of the domain names www.mayorsamadams.com and www.samadamsformayor.com.

Boston Beer has used the trademarks SAM ADAMS® and SAMUEL ADAMS® since 1984 and is the owner of a number of federal registrations for the marks in connection with a variety of goods and services, including beer, other alcoholic beverages and related merchandise. These trademarks have become uniquely identified with Boston Beer and they and their accompanying goodwill represent a substantial asset of Boston Beer's business.

We recently became aware that you have registered the domain names www.mayorsamadams.com and www.samadamsformayor.com. We believe that the sale of any services or products under this name will cause confusion as to the source, sponsorship or affiliation of such services or products and/or dilute the distinctiveness of our famous trademarks and trade name. Such infringement and dilution may subject you to liability under Sections § 43 and 32(1) of the Lanham Act, including the Anticybersquatting Consumer Protection Act.

We trust that you do not wish to impair the intellectual property rights of another company or cause confusion as to the source or sponsorship of your services and products. Therefore, we hereby notify you that Boston Beer will take all appropriate action to protect its valuable trademarks and request that you immediately cease and desist use of the domain names www.mayorsamadams.com and www.samadamsformayor.com. Please respond to this letter confirming our request by October 29, 2007.

Very truly yours,
Helen Bornemann
Intellectual Property Manager

There are two remarkable facts about this: 1) that the brewery didn't bother to do a Google search to see if there was a Sam Adams running for mayor ("Sam Adams Mayor" resolves the question with the first result); and 2) that, having appropriated the name of a historical figure, the brewery now protects its mark against private citizens. It has all the makings of a huge PR blunder.

Sam Adams Threatens Sam Adams

There is a very nice fellow on the Portland City Council. He was the chief of staff to long-time mayor Vera Katz before running for the Council; and now that one-term mayor Tom Potter has decided to pack it in, this nice fellow has decided to run for mayor himself. As things currently stand, he is very likely to win. His name is Sam Adams and here is his picture.

If that name rings any bells, it may be because there was a much earlier public figure with that name. This man did not hold office, but was also a political figure and was partly responsible for bringing about the American revolution. Here is his picture.


Now, it's possible that the name rings a bell for an entirely different reason. You may be more familiar with the name Sam Adams because it is associated with a tasty beer you enjoy when, say, you're watching the New England Patriots on television. And herein lies the rub. That tasty beer is owned by a company that is a little tetchy about the name it appropriated from an American patriot and now appears to be threatening our future mayor with trademark infringement:

Everything was swell until last week, when Anderson got a letter from The Boston Beer Co.

"Boston Beer has used the trademarks SAM ADAMS\STRIP and SAMUEL ADAMS\STRIP since 1984," said the letter, which asked Anderson to give up the Web sites.

Portland's Sam Adams is amused and a bit concerned: His campaign staff consulted lawyers Tuesday. The slogan "Sam Adams for Portland Mayor" is already on his Web site (www.samforpdx.com) and soon may grace yard signs and bumper stickers.

"They say they've been using this trademark since 1984," Adams said. "I've been using it since 1963."

Boston Beer's Helen Bornemann said she didn't know there was a real Sam Adams running for mayor when she sent the letter. The brewery has previously run "Sam Adams for President" marketing campaigns, she said, and feared someone was ripping them off. Bornemann said she's willing to discuss Adams' use of the Web sites "probably for the length of the time the election is being held."

It will perhaps not surprise anyone that this isn't playing well in the non-New England Portland. Early appraisals:

Here's a nice little response: f*** you, Boston Beer Company.

I, for one, am one hundred percent behind Mark and Dave. I hereby boycott all Boston Beer Company products. Since they only make Sam Adams beer, and since I never drank that swill anyway, that will be easy enough.

and

The trademark flap between Samuel Adams (the beer) and certain fans of Sam Adams (the next mayor of Portland) is quickly shaping up into a consumer boycott. Don't drink Sam Adams! And tell the corporate intellectual property bullies what you think of their harassment, here.

and

Personally, I don't often drink it. Not that it's swill. It's okay. But it's just not in my wheelhouse.

But I won't be drinking it again, due to the idiocy of their corporation.

Another wrinkle that makes this especially amusing: but for a coin flip, Portland would now be known (confusingly) as Boston, Oregon. Which would really bring the thing full-circle--Sam Adams, running for mayor of Boston.

I don't know, I think the whole thing calls for a nice, frothy pint of Oregon beer. Cheers!

[Update: a jpeg of the letter is here; further coverage on blogo-protests here.]

Autumn Beers - Sam Adams Oktoberfest

The next autumn beer to appear on the shelves is one that commenter DF recommended in last week's review of Widmer Okto: Sam Adams. Since I rattled on about the style and history in that review, I'll commence directly to the tasting notes of Boston's finest.

Tasting Notes
The beer looks great--a rich amber with a dense tan head that dissipated a mite quicker than I'd have liked. Not quite as deep red/orange as the Widmer, but attractive. The nose is limited to a spice and a very slight candied orange scent.

Sam Adams has gone for a lighter interpretation--the body is thinner and the mouthfeel less creamy. There's is a drier version. It is, if anything, more peppery than the Widmer--suggestive of autumnal spices like clove and nutmeg, and perhaps a little ginger. There's not a lot of residual sugars in this beer, so the sweetness is just suggested, again with a candied fruit essence. The finish is very dry and crisp. I expect it would complement somewhat lighter foods or serve as a nice apperitif.

It would be interesting to try Widmer Okto and Sam Adams side by side to see how they compared and contrasted. I suspect selecting the "better" of the two would be a fool's errand, but fool that I am, I'd choose Widmer. (On purely personal, subjective ground, admittedly.)

Stats
Malts: Pale, Munich 10, caramel 60, Moravian
Hops: Tettnanger, Hallertau-Mittelfruh
Alcohol by volume: 5.4%
Original Gravity: 13.6° Plato, 1.048
Bitterness Units: N/A
Other: Brewery uses a decoction mash and secondary fermentation.
Available: Throughout the Northwest; in stores now (Sept 14, '06).

Rating
Good, tending toward excellent.