Sam Adams’ Quest For Craft Beer Innovation Leads It To Snap Up Rival Dogfish Head

The Boston Beer Company gets even bigger by merging with rival Dogfish Head. (AP Photo/Charles Krupa)

The craft beer business isn’t the gentle marketplace that it used to be. More than 7,000 breweries are now fighting it out for a share of drinkers’ refrigerators, while supermarket shelves abound with colorful labels and quirky flavors.

That helps explain why two of the most notable names in craft beer decided to join forces this week.

On Thursday, the Boston Beer Company and Dogfish Head announced a $300 million merger that will see Dogfish founders Sam and Mariah Calagione become the largest stakeholders in Boston Beer.

Both companies will continue to operate as independent brewers, according to the Brewers Association. Meanwhile, Sam Calagione will get a seat on board at Boston Beer, founded by effervescent beer industry CEO Jim Koch in 1984.

“We believe we are creating the most dynamic and diverse American-owned platform for craft beer and beyond,” Koch said, in announcing the deal.

Added Calagione, “Mariah and I believe so much in the future of our combined companies that we’re all in” and will re-invest nearly all the proceeds of their shares into Boston Beer.

Boston Beer, best known for its Samuel Adams Boston Lager, has always been on the lookout for beer trends and the latest flavors.

Back when the company was founded in 1984, it was simpler to be a leader. But now, microbreweries have popped up in every corner of the United States.

Multiple cities, including Denver, Grand Rapids, Mich., and Portland, Oregon, market themselves as beer capitals.

And, some of the industry’s best-known independents have been snapped up by big global brewers. You can get a sense for who owns which from this craft beer chart.

In fact, Boston Beer has moved the “beyond beer” category, producing hard cider as well as spiked versions of seltzer and kombucha.

Given Sam Adams’ dominance in its home town of Boston, and Dogfish Head’s loyal customers in Delaware and the Philadelphia area, the pair have some grip on the East Coast market.

But, that doesn’t stop Boston Beer from continuing to look for ways to get beer drinkers’ attention.

Inside its innovation lab in the Jamaica Plain section of Boston, testers have 30 taps going at a time, concocting new flavors they hope can resonate with those bartenders and beer drinkers.

The taps involve everything from more-traditional beer styles to fruit flavors. Koch often stops by to sample and offer opinions on how a beer might be improved.

It takes the company about two months to decide whether to brew up a large batch of a new variety, but much longer to actually package it and convince bars and restaurants to stock it.

Now, with the Dogfish Head move, Boston Beer gets a line of beers that helped popularize the India Pale Ale, or IPA.

The company also gains a celebrity board member who won’t be shy about offering his opinions about where Boston Beer should go.