Boston Beer Company, Inc.

Author:Robert Schnakenberg

Page 199

75 Arlington St.

Boston, Massachusetts 02216


Telephone: (617) 368-5000

Fax: (617) 368-5500

Web site:


In August 1998, after a two-month review, the Boston Beer Company, Inc. replaced its longtime ad agency, Carmichael Lynch, with Interpublic Group's McCann-Erickson. The New York-based agency's first work for the Samuel Adams Boston Lager brand retained the aspirational thrust of the final campaign from Carmichael Lynch but adopted a more straightforward approach that defined both the beer and its consumers. The resulting campaign, "It's What's Inside," was introduced later in the year and included both television and radio spots. Cofounder and CEO James Koch expressed confidence in the new tag line, which appeared to be borne out by the brand's performance in 1998.


Koch, who owned 27 percent of the Boston Beer Company, emerged from a long family line of brewers. His great-great-grandfather Louis once owned a brewery in St. Louis that operated in the shadow of Anheuser-Busch. His father, Charles Joseph, Jr., worked as a brew-master at several breweries in Cincinnati. Koch himself gave up a promising career in business to pursue the family dream of owning and operating his own brewery. At the time, in the early 1980s, Americans' taste in mass-marketed beers had drifted toward light, pale brews like Budweiser. Koch proposed to buck the tide by marketing a more full-bodied lager made of choice ingredients, a connoisseur's beer brewed in the Old World tradition.

Koch founded the Boston Beer Company in 1984, raising $400,000 from friends and business associates and exhausting his personal savings of $100,000. For his recipe Koch retrieved his great-great-grandfather's old beer formula from his father's attic in Cincinnati. For the label of his flagship brand, Koch chose to honor Samuel Adams, the American Revolutionary hero who had once worked as a soaker and drier of barley (not a "brewer," as stated on the label).

The early days of the Boston Beer Company were difficult ones. Many Boston-area distributors doubted that consumers would pay $6 per six-pack for an American beer. And so Koch and his "sales staff" (consisting in its entirety of Koch's former secretary Rhonda Kallman), traveled from tavern to tavern hawking Samuel Adams in person. Koch also entered his beer in the Great American Beer Festival and won the consumer preference poll. He built his early advertising campaign around the award, saturating newspapers and radio waves with the tag line "The Best Beer in America." The ads stressed the idea that Samuel Adams beer was brewed in small batches by Yankee craftsmen. "I'd had no idea whether we'd find 100 customers or a million," Koch declared.

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HISTORICAL CONTEXT © Dave Bartruff/Corbis. "I hoped to sell 5,000 barrels in five years, but we got to that goal in four months."

Once the company had posted those kinds of numbers, larger distributors began to show an interest. Samuel Adams beer became one of the first American specialty brews in decades to become a nationally distributed product. Annual sales of the Boston Beer Company grew at a 57 percent clip a year in the early 1990s. In 1996, 12 years after its launch, the company made $8.3 million in profits on sales of $214 million.

It was thus that the Boston Beer Company rose from obscurity to become one of America's...

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