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Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
Samuel Adams %281%29
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Samuel Adams %281%29

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  • Recent acquisition of Anheuser Busch by Inbev and the joint venture of Miller Brewing Company and Coors Brewing Company to create Miller Coors LLCMiller Coors Sells: Miller Lite Coors Light, BLUE MOON, Killian Irish Red Milwaukee's Best, Foster’s, KeystoneBoston Beer sells its product mainly in the US, but also markets them in Canada, Europe, Israel, Pacific Rim, Mexico and the Caribbean.99% of revenue comes from US but, but also markets them in Canada, Europe, Israel, Pacific Rim, Mexico and the Caribbean.Further, these two major brewers have entered the Better Beer category recently, either by developing their own beers, acquiring, in whole or part, existing craft brewers, or by importing and distributing foreign brewers’ brands. On January 11, 2010, Heineken N.V. (“Heineken”) announced its acquisition of the beer operations of FomentoEconomicoMexicano, SAB de CV (“FEMSA Cerveza”) which will make Heineken the number two brewer internationally by revenue and significantly increase Heineken’s ownership position in the Better Beer Market with the addition of FEMSA Cerveza brands, including Dos Equis ®, Sol® and Tecate®.
  • “Determined by higher price, quality, image and taste, as compared with regular domestic beers”(10-k)Better Bear includes most imports and specialty beersPrimarily but not entirely within the Better Beer CategoryIn the Better bear category only behind Corona and Heineken Further, these two major brewers have entered the Better Beer category recently, either by developing their own beers, acquiring, in whole or part, existing craft brewers, or by importing and distributing foreign brewers’ brands. Heineken N.V. (“Heineken”) announced its acquisition of the beer operations of FomentoEconomicoMexicano, SAB de CV (“FEMSA Cerveza”) which will make Heineken the number two brewer internationally by revenue and significantly increase Heineken’s ownership position in the Better Beer Market with the addition of FEMSA Cerveza brands, including Dos Equis ®, Sol® and Tecate®.
  • Beer Category was flat but Craft Beer rose 12%
  •  -SAM is heavily dependent on about 400 wholesale distributors sell to retailers (pubs, restaurants, grocery chains) -These distributors are the same distributors used by AB InBev and SABMiller and are often influenced by these larger companies. -SAM holds this same distribution advantage over smaller regional breweries. -Distributors can terminate service on very short notice and there is no guarantee SAM could find other distributors offering comparable prices. Beer is produced at breweriesThe second tier is distribution. Producers will often provide exclusive rights to a certain company to distribute its product to different retailers, and the post-prohibition landscape usually makes distributors powerful entities within each individual state. This reduces competition and can raise prices, since fewer distributors mean less incentive to reduce prices. Some states also have regulations further defining the relationship between the brewer and a distributor, even going as to legally bind a brewer to a distributor. This can create a headache for consumers since disputes between brewers and distributors can result in certain beers becoming unavailable in an area.The third tier is retail. This is the point at which the general consumer can purchase the product, whether that be a grocery store, bar or state-regulated vendor. As with many things, there is an exception: brewpubs - restaurants or pubs that produce beer on site for sale on site.
  • Percentage numbers emphasis
  • Blue boxes – too strong
  • Transcript

    • 1. Boston Beer Company
      Group 4
      Jose Aleman
      Andrew Fulham
      Scott Sorensen
      Stephanie Soybel
      Taylor Williams
      1
    • 2. Recommendation
      We value Boston Beer Company (NYSE: SAM) at $63.38 per share, and recommend that investors hold these securities.
      Current Market Price of $65.21
      Increased competition will hinder revenue growth and company expansion
      Market Growth within Industry Stagnation
      2
    • 3. Agenda
      Overview
      Financials
      Strategy
      Valuation
      3
    • 4. Boston Beer Company History
      1984
      • Jim Koch founds Boston Beer
      1995
      • IPO at $20 per share
      2001
      • Twisted Tea launched
      2002
      • Sam Adams Light launched
      2007
      • Purchase of PA brewery
      2008
      • Product recall in April
      Overview
      Financials
      Strategy
      Valuation
      4
    • 5. Boston Beer FeelsCompetition from All Sides
      Imports
      Wine & Spirits
      Craft Beers
      Industry Leaders
      Overview
      Financials
      Strategy
      Valuation
      5
    • 6. Consolidation ofDomestic Beer Production
      Source: www.ibisworld.com
      Overview
      Financials
      Strategy
      Valuation
      6
    • 7. Domestic Beer Production is Decreasing
      Source: www.ibisworld.com
      Overview
      Financials
      Strategy
      Valuation
      7
    • 8. Boston Beer operates within the “Better Beer” category
      Craft, Import, and Specialty Beer
      20% of Domestic Beer Market
      Category profitability realized by Major Brewers
      Samuel Adams is the largest domestic brewer and 3rd largest Brewer in the Better Beer Category
      Overview
      Financials
      Strategy
      Valuation
      8
    • 9. Craft Beer: Growth within Stagnation
      Craft Beer experienced 12% growth in 2009
      6th Straight year this category has outperformed the Beer Industry
      Major Craft Beers:
      Craft Beer drinkers are loyal to the Craft Beer Industry
      Overview
      Financials
      Strategy
      Valuation
      9
    • 12. Boston Beer sells 2 of the top 3 Craft Beers
      Top Selling US Craft Beers in 2009
      1) Sierra Nevada Pale Ale
      2) Samuel Adams Boston Lager
      3) Sam Adams Seasonal
      4) New Belgium Fat Tire Amber Ale
      5) Shiner Bock
      6) WidmerHefeweizen
      7) Sam Adams Variety Pack
      8) Sam Adams Lite
      Source: Beverage Industry Magazine
      Overview
      Financials
      Strategy
      Valuation
      10
    • 13. 3 Tier Distribution System
      Brewery
      Wholesalers
      Retailers
      Overview
      Financials
      Strategy
      Valuation
      11
    • 14. Diverse Product Portfolio
      Boston Beer Co. (SAM)
      8 Flavored
      Malt Beverages (13%)
      1 Hard Cider (0.06%)
      20 Unique Beers (87%)
      Overview
      Financials
      Strategy
      Valuation
      12
    • 15. Current Market Analysis
      Overview
      Financials
      Strategy
      Valuation
      13
    • 16. Market Opportunities and Risk
      Overview
      Financials
      Strategy
      Valuation
      14
    • 17. Overview
      Financials
      Strategy
      Valuation
      15
    • 18. Historical Revenue Growth
      Overview
      Financials
      Strategy
      Valuation
      16
    • 19. Projected Revenue
      Overview
      Financials
      Strategy
      Valuation
      17
    • 20. Cost of Goods Sold
      Overview
      Financials
      Strategy
      Valuation
      18
    • 21. Financial Analysis
      Financial Analysis
      Net profit margin of 7.5% in 2009
      Boston Beer has no short or long term debt
      • Can finance its own capital expenditures
      • 22. ABInbev:12.55%
      • 23. SABMiller:10.6%
      Source: Global Business Browser
      Overview
      Financials
      Strategy
      Valuation
      19
    • 24. Overview
      Financials
      Strategy
      Valuation
      20
    • 25. Competitive Strengths
      Leadership built on scale, quality and branding
      Consumer preferences are shifting towards premium beer
      Agreements with suppliers and distributors yield stability and predictability.
      Overview
      Financials
      Strategy
      Valuation
    • 26. Threats
      Increasingly competitive segment
      Low switching costs among consumers
      Intensified efforts from industry leaders to penetrate the market
      Low barriers to entry at the microbrewer level
      Need to increase differentiation from premium products in wine and spirits industry
      Overview
      Financials
      Strategy
      Valuation
    • 27. Opportunities
      Geographic expansion
      Domestic
      International – Emerging markets
      Risks
      Direct competition with regional brewers
      Competition with major industry leaders
      Product diversification
      23
      Overview
      Financials
      Strategy
      Valuation
    • 28. Overview
      Financials
      Strategy
      Valuation
      24
    • 29. Discounted Cashflow Analysis
      Overview
      Financials
      Strategy
      Valuation
      25
    • 30. Best and Worst Cases
      Overview
      Financials
      Strategy
      Valuation
      26
    • 31. Sensitivity Analysis
      Overview
      Financials
      Strategy
      Valuation
      27
    • 32. Sensitivity Analysis
      Overview
      Financials
      Strategy
      Valuation
      28
    • 33. Recommendation
      We value Boston Beer Company (NYSE: SAM) at $63.38 per share, and recommend that investors hold these securities.
      Current Market Price of $65.21
      Increased competition will hinder company expansion
      Market Growth within Industry Stagnation
      29
    • 34. Appendices
      30
    • 35. Five Forces Summary
      31
    • 36. Larger Competition
      AB Inbev
      Shock Top
      Colorado Native
      Redhook
      MillerCoors produces several craft beers
      Blue Moon
      Henry Weinhard
      Leinenkugel
      32
    • 37. Assumptions
      33
    • 38. Income Statement 2005-2014
      Source: Global Business Browser / Reuters
      34
    • 39. Balance Sheet 2005-2009
      Source: Global Business Browser / Reuters
      35
    • 40. Key Employees
      36
    • 41. SWOT
      • Strengths
      • 42. Strong recent financial performance
      • 43. Robust network of breweries for local distribution
      • 44. Diversified in products and geographical distribution
      • 45. Strong market position
      • 46. Expanding market share
      • 47. Strong growth prospects
      • 48. Weaknesses
      • 49. Much smaller player than most competitors
      • 50. Declining profitability
      • 51. Limited liquidity position
      • 52. Low return on equity
      • 53. Product recalls
      • 54. Opportunities
      • 55. Focused strategy on reducing
      • 56. Dependencies on other brewers
      • 57. Production expansion
      • 58. Growing craft beer market
      • 59. Threats
      • 60. Changing consumer preferences
      • 61. Limitations on advertising
      • 62. Stringent governmental regulations
      • 63. Consolidation in beer industry
      37
    • 64. Financial Ratios
      Source: Global Business Browser
      38
    • 65. Final Notes
      A large amount of information in this presentation was taken from the Boston Beer Company 2009 10k
      39
    • 66. Sensitivity Analysis
      40

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