There is a fabulous story in this month’s Boston magazine that details a recent dinner held at Row 34, one of the best bars in the US city, by entrepreneurial brewing legend Jim Koch. It was Koch who launched Samuel Adams lager, named after a famous American revolutionary, in 1984 and in doing so created brewing history.
Thirty years ago, the American beer market was held in a boring, oligopolistic stranglehold between three players: Miller, Budweiser and Coors. Koch used both savvy marketing and his own brewing lineage to come up with a genuine craft beer alternative. If, like me, you enjoyed a decent pint and spent considerable time in the US, Sam Adams was the brand you looked for to rescue you from the homogenous amber hell of generic American beer.
But times change and Koch is finding it increasingly difficult to retain Sam Adams’ reputation and distribution in the craft beer market. On the night of the dinner, it was reported that he complained about the quality of ale, which, despite or perhaps because of Row 34’s vaunted craft beer credentials, refuses to stock Sam Adams.
Koch is no dummy. His $3bn brewery will survive without the sales of a small venue like Row 34. His anger is marketing-related, not sales-oriented. As more premier beer distributors turn their back on Sam Adams, his brand becomes increasingly associated with the mainstream mass market that he once fought against. Sam Adams’ changing fortunes can be traced to two distinct factors.
First, the brand is 30 years old and times inevitably change. Consumers push back against the brands of their predecessors, cultures shift, segments change, competitors rise, and fall. Shit basically happens and middle-aged brands must navigate these changes carefully. Often, the very things that made a brand successful in the past are the reasons for their present struggles.
For Sam Adams, the problem is that the competitive context has changed. Thirty years ago, the US was the worst place in the world to go for a good beer. Today, thanks to a revolution that has seen more than 3,000 small, independent breweries emerge, it has the most vibrant and impressive array of beer drinking on the planet. Where once Sam Adams was the new upstart taking on big, mass-produced uniformity, it now finds itself to be a billion-dollar corporation with thousands of smaller rivals positioning against it.
The second problem for Sam Adams is authenticity. Superficially at least, the story of Sam Adams has genuine appeal for beer drinkers. Koch is a 6th generation brewer who stumbled upon the idea for his beer when he found a 19th century recipe developed by his great-great-grandfather Louis Koch. The beer’s home town of Boston, the home of the American Revolution, only added to its distinctive and authentic appeal.
Drink a little deeper and much of this founding story, while ostensibly true, goes a bit flat. Koch came from brewing stock but graduated from Harvard with an MBA and spent his early years not bent over a barrel but at the Boston Consulting Group. The recipe for Sam Adams might have originated with his ancestor, but it was ‘refined’ by industrial beer scientist Joseph Owades. And while Boston might have been the marketing home for the brand, it was not originally brewed there but mass-produced under license in places as far flung as Pittsburgh and Cincinnati. Only more recently has the company set up a small R&D brewery in the Boston area.
In 1984, that story was authentic enough to stand apart from monolithic corporate brands and their empty, aspirational marketing. Thirty years on, it looks like confection when compared with the tiny, founder-driven breweries from real locations with niche appeal.
The question for Jim Koch is whether he is ready to accept that his giant-slayer has become a giant or whether he attempts a foolhardy quest to convince a new generation of beer drinkers that his billion-dollar corporation is as cool and crafty as anyone. He was widely and correctly seen as a marketing genius for his launch strategy for Sam Adams. Is he smart enough to do it again, this time with a revitalisation plan that will ensure the brand’s next 30 years are as successful as the last?