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Why Beers Are Recession Proof

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    Boston Beer Co. Chairman James Koch on the company's strategy for long-term growth.

  • Duration 5:15
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Where -- timed to talk.

-- -- Miller and Anheuser-Busch.

Of course once large American -- now gobbled up by global -- sleeping.

Boston Beer company the maker of Sam Adams beer the leading independent.

American brewer and even though they are now it's hot dog Sam Adams is still looking out for the little guy joining us now Boston Beer company founder and -- Jim -- Jim great to see you.

All right you are -- beer industry expert and insider what your take on -- beer sales are recession proof.

Well you have -- to me it's almost like food and it certainly even -- craft beer like Sam Adams.

Is a very affordable luxury in might not be able to buy a great bottle -- wine -- you know really awesome.

Dinner but you can take home a six pack of one of the best peers in the world for you know eight box nine bucks seven bucks.

Are right get your first quarter 2011 earnings found a little bit off 2.3 million from the same quarter last your Boston Beer -- said spent money on advertising.

Promotions and selling expenses so well into the third quarter here would you say the strategy is paid off.

-- I think so but.

These are very long term investment I started Sam Adams in my kitchen 27 years ago so it gives you.

A little longer term perspective on the health of the company than just quarter to quarter.

You know variation.

I mean that's a fair point but there have been some headwinds right because we've seen higher cost commodities prices.

Have been soaring but really he's still have a consumer demand as I said it's largely.

Recession -- so what -- your thoughts here possibly.

On doing a deal you know we're talking about consolidation in the industry what are your future plans -- you are saying that this is a long term strategy.

Yeah as Sam Adams is certainly.

Prospered as an independent company and you know it today means -- Kind of an honor to be the largest.

American owned -- but.

We're still only 1% of the US beer market so.

We remain.

Quite as small brewer and that gives us a lot of opportunity to grow.

How are you gonna do that what your strategy for growth.

Well I think -- what we're seeing.

Is this long term.

Growth in americans'.

Understanding and appreciation.

Of good beer and the evidence for that is the entire craft beer category of which Sam Adams -- those been the leader.

Has been growing double digits even in this recession last year craft beer was up 11%.

At the same time that the beer category was pretty stable.

So against my earlier question to you did take a bit of an earnings hit I know was just on the quarter because he did increase spending.

On promotions and advertising so are you seeing that come back has it has it worked out for you are you.

Seeing sun are the analysts now suggesting that you'll see some upside -- that 1% market share.

I think so you know we did grow.

In the first quarter we're anticipating growth again in the second quarter and hopefully for the rest of the year because Americans.

Are -- beginning to adopt craft beer quality beer in the same way that they adopted.

Quality wine 25 years ago so I'm very optimistic about.

An ongoing cultural shift in Americans may be drinking a little less fear the drinking better beer when you're talking about drinking.

Better beer Sam Adams is the leading craft brewer in the United States and we've always grown with the category.

And we have some labels year and Sam Adams brands what's the most popular what are some of the hot the hot seasonal -- right now special fourth of July just behind us what was hot this weekend.

Sam Adams summer rail.

It's a great summer -- it's really.

You know summer in a glass it's kind of gold in hazy.

To me.

When I have a Sam Adams summer -- it's just captures the essence of us summer weekend like the fourth of July and and I -- remind myself if it weren't for Samuel Adams you know the the -- the patriot and the founding father we might not have a fourth of July we might have.

You know how I work yesterday and then watch cricket and sing god save the queen had.

-- that's that's true this was your holiday Sam Adams.

Wanna ask you about your program brewing the American dream basically you are.

-- right to smaller businesses food another -- Greece and creating jobs and it's really been a tremendous success you've been.

Successful on both of those fronts and given the small business problems.

In this broader economy do you think that -- is something a program like this brewing the American dream.

Could be applicable on a broader scale.

Oh definitely.

It was something that we started about.

Three years ago it's basically a micro lending.

Program and we've expanded it out of New England now to.

Ohio the Lehigh Valley Pennsylvania.

And New York City and for craft brewers nationwide and it continues.

OK yeah -- -- there aren't diet affect -- --

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