The Boston Beer Company, Inc.

The Boston Beer Company, Inc.

How would you say Boston Beer is doing? What are the sources of its competitive advantage? How sustainable is its competitive advantage?

Due to the fact that Boston Beer is in talks of having an IPO, I would say that they are doing great. Their growth has been over 50% year over year for the past four years and they have a sustained competitive advantage. They use only the highest quality of Bavarian hops that are imported from Germany. This gives them an ability to price their products higher than competitors, allowing them to have a higher gross margin. Additionally, they invest and contract to brew companies, thus reducing their startup costs. They are always releasing new seasonal brews, thus keeping consumer loyalty, even though there may be cannibalization. Due to their high cash flows, they are able to fund growth

Why has Boston Beer chosen a dual class share structure for its IPO? What are the implications for a dual-class structure for investors?

Dual class shares allow for a small portion of ownership but a majority of voting power. This would benefit the owners and founders of Boston Beer Company in the sense that they would be able to sell of a majority of ownership of the company but still be able to control its operations. This is important because the Boston Beer Company’s products need to have a specific brewing process, ingredients, and marketing plan to be successful in the craft beer industry. If they give up voting rights within the company, a majority stakeholder (hedge fund, wealthy investor, etc) could come in, change that process, and destroy the brand that the founders have built. It allows for sustained longevity, but it is somewhat unfair to some investors.

How does Boston Beer’s consumer subscription