News this week that Rehoboth, Delaware, brewer Dogfish Head would be acquired by Sam Adams maker Boston Beer raised some eyebrows about another big beer company buying up a local craft brewer.
Boston Beer had 2018 sales of close to $1 billion and its beers can be found in bars and retailers in just about every city across the country, but it is still technically considered a craft brewer.
Dogfish Head, now based in Milton, Delaware, just outside of Rehoboth, defends the deal when asked about criticism that the definition of craft beer has become too broad.
“I think the consumer would be better served by redefining what they think is small,” Dogfish Head founder Sam Calagione told WTOP.
“All 7,500 American-owned breweries have less than 14% in a world where four international conglomerates control over 80% of our country’s beer market. I am hopeful that when consumers are presented with those facts, they’ll want to prioritize buying from the true indie-craft breweries,” he said.
Dogfish stakeholders will get $300 million in cash and stock.
Calagione and his family will take their share in Boston Beer stock, and he prefers to call the deal a merger that will give him the resources to continue growing his Delaware brewing company.
Boston Beer ranks No. 2 on the Brewers Association’s annual list of largest craft brewers by sales volume (Yuengling & Son is No. 1 and Sierra Nevada is No.3), and Boston Beer is big enough to rank No. 9 on the list of top overall brewing companies, a list led by Anheuser-Busch, MillerCoors and Constellation.
Dogfish Head, ranked as the 13th-largest craft brewer, has grown so large that it now ranks at No. 22 on the list of 50 largest overall brewing companies in the U.S.
The Brewers Association defines a craft brewer as one that produces 6 million barrels of beer or less annually (Boston Beer produced about 4 million barrels last year), and is less than 25% owned by another beer company that is not itself a craft brewer.
In 2016, Lexington, Virginia-based Devils Backbone was acquired by Anheuser-Busch InBev.
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