Boston Beer Co., the makers of Samuel Adams beer, bought a brewery about ten years ago. It was a somewhat well-known one, the Hudepohl-Schoenling Brewery in Cincinnati, Ohio. They were a large regional player probably most famous for their Little Kings brand and the Christian Moerlein line. Like many breweries in the past two or so decades they also kept themselves afloat by doing contract work, most notably for Whitbread and Sam Adams. Then in 1997 Jim Koch, perhaps having grown tired of constantly being criticized for being a “just a contract” brewer and not owning a one, purchased it. After recently investing heavily in upgrades, the company expects to brew roughly two-thirds of Sam Adams beer there. ProBrewer reported today that they’re now considering building yet another brewery, this time from scratch with the ultimate goal of brewing all their own beer themselves.
From the ProBrewer report:
Boston Beer said in the report that it’s evaluating its long-term production strategy and could decide to make all of its own beer. Until it bought the Hudepohl-Schoenling brewery 10 years ago, almost all of its beer had been made under contract since the company’s founding in 1984.
Back then, there was idle brewing capacity in the industry from smaller regional breweries. In recent years, many of those regional breweries that had excess capacity have seen increased sales due to the popularity of the craft beer segment, and there’s less capacity available for contract brewing.
If Boston Beer decides to make all of its own beer and build a new brewery, it would likely require an investment of $70 million to $90 million and yield improved operating and freight costs, it said. Company officials told analysts during a conference call this week that the evaluation of its production strategy was ongoing and that they hadn’t developed full economic estimates yet.
CEO Martin Roper said freight costs, beer freshness, and quality control as some of the factors that they’re looking at.