The Motley Fool’s readers have spoken, and I have heeded your cries. After months of pointing out CEO gaffes and faux pas, I’ve decided to make it a weekly tradition to also point out corporate leaders who are putting the interests of shareholders and the public first and are generally deserving of praise from investors. For reference, here’s my previous selection.
This week, we’re going to turn our attention to some tasty brews and highlight why Martin Roper, CEO of Boston Beer Co Inc (NYSE:SAM), is one incredible leader.
Kudos to you, Mr. Roper
If you go out on a Friday night to your local pub, chances are very good you’ll see a packed house. For us lifetime investors out there, we’re always on the lookout for the next sustainable and revolutionary idea. Even as a beer connoisseur myself, I’m not sure I’d go so far as to call the brewing process revolutionary, but I’d have figured with some certainty that the price inelasticity and brand-name popularity of the alcohol business would provide gains in time of growth and recession. Unfortunately, for many beer and spirit producers, that’s just not the case.
Many mass-produced beer companies, such as Anheuser-Busch InBev NV (ADR) (NYSE:BUD) and Molson Coors Brewing Company (NYSE:TAP), have struggled in domestic markets since the recession as consumers have opted for even cheaper beers, or have decided to pay a premium for craft beers and made the move toward Boston Beer Co Inc (NYSE:SAM) or other small craft brewers. In 2010, for example, sales of Budweiser dropped 7.3% while Miller High Life saw sales dip 4%. This same year saw Sam Adams tack on a gain of 1.7%! This doesn’t even take into account the fact that domestic competition has spiked, with the number of brewers in the U.S. jumping from just 89 in the late 1970s to more than 2,400 by the end of 2012, according to the Brewers Association.
Despite this massive increase in competition and more challenging spending habits from consumers, Boston Beer — maker of the Sam Adams line of beers — has flourished. Founded in 1984 and working its way from the ground up, Boston Beer has relied on its small-guy image to lay claim to 1% of the domestic beer market, or about 3 million barrels of beer each year. For the entirety of 2012, Boston Beer Co Inc (NYSE:SAM) witnessed shipment volume growth of 10% and a robust gross margin of 54.3%.
One of the keys to success for Boston Beer has to do with its chairman and founder, Jim Koch, and its current CEO, Martin Roper, working so closely to grow the brand. In the 29 years since its founding, Boston Beer has had just two CEOs, which is honestly incredible given the revolving door that the CEO position has become over the past decade in nearly all industries. With two long-tenured individuals leading Boston Beer, the leaders and board remain focused and investors spend little time worrying about what’s been solid corporate governance up to this point.
Understanding that its customer base demands a wide variety of options is another way that Boston Beer has excelled. There are more than 50 different varieties of Sam Adams sold throughout the world that cater to the many different palates and diets that exist. With essentially a beer for everyone, Sam Adams has encompassed a global audience without sacrificing the individuality that makes it the largest craft brewer.
A step above his peers
In addition to delivering fantastic top- and bottom-line results, Boston Beer Co Inc (NYSE:SAM) has been known to do right by its investors, its employees, and in the community.