After a yearlong search, Boston Beer Company has named its next CEO.
On Wednesday night, the company revealed that Dave Burwick, the CEO of Peet’s Coffee & Tea, Inc., would depart the Bay Area-based specialty coffee maker for the producer of Samuel Adams — a pioneering U.S. craft beer brand that in recent years has struggled to grow as thousands of new offerings have flooded the market.
Burwick — who has served on Boston Beer’s board of directors since 2005 and is expected to supplant longtime CEO Martin Roper in the second quarter — helped Peet’s “more than double its sales and profits” during a five-year run with the coffee company, according to a press release.
“The search committee unanimously agreed that Dave Burwick has the business experience and skills to lead the company forward and will be a great culture fit, appreciating how unique and special Boston Beer is as an organization,” Boston Beer founder and chairman Jim Koch said via the announcement.
Speaking to Brewbound, Koch said Burwick was an early candidate for the position, given his familiarity with Boston Beer’s business.
“I spoke to him early in the process, and he wasn’t ready,” Koch said. “He still felt that he had work to do at Peet’s — he was building his team there and the time wasn’t really right — and he really wanted us to go through the search process.” Koch, along with executive recruiting firm Korn Ferry, interviewed approximately 40 potential replacements for Roper.
“He’s been part of not just our growth, but also the creation of our culture,” Koch said of Roper. “The guy is a hard act to follow. In terms of his character, integrity, and concern for people, you rarely get that in the same package with, probably, the smartest guy I’ve ever met.
“I knew that I was not going to get another Martin, but I would get someone with a different set of strengths and skills,” he added, noting that becoming the CEO of Boston Beer was Burwick’s “dream job.”
Asked why it took more than a year to settle on Burwick, Koch, citing a high failure rate of replacement CEOs, said he was “determined to not subject the company to that kind of risk.”
“If you do everything right, you might get your failure rate down to 40 percent,” he said. “But the failure rate for internal candidates is much smaller — especially for board members who have spent significant time with the company. It’s around 20 percent.”
At Boston Beer — which produces and sells the Samuel Adams, Angry Orchard, Twisted Tea and Truly Spiked & Sparkling offerings, as well as the Concrete Beach, Angel City, Coney Island and Traveler Beer labels — Burwick will be tasked with returning the sixth largest U.S. beer company to growth.
Boston Beer’s full results from last year will not be available until next week, but portfolio-wide shipments were down 6 percent through the first 39 weeks of 2017. The year prior, shipments also declined 6 percent, to about 4 million barrels.
The company’s last full year of growth was in 2015, when 4,225 craft breweries were operating in the U.S. by the end of the year, according to data from the Brewers Association. That same year, craft beer sales grew by double-digits (12 percent) for the sixth straight year.
Over the last two years, however, growth within the segment has slowed to single digits — 6 percent in 2016 and approximately 4 percent last year — while the number of operating breweries has swelled past 6,000 and sliced into Boston Beer’s market share.
It’s something that hasn’t been lost on Koch, who has repeatedly blamed slower growth in the beer and cider categories as well as increasing competition from “new, small and local” players for his company’s downward trends.
Investors have taken note, too. The company’s stock was trading at more than $313 per share in early 2015. It dipped to $130 midway through last year and, as of press time, was trading at more than $200 (up more than 4.5 percent since news of Burwick’s hiring crossed the wire).
And during the first four weeks of 2018, Boston Beer’s results have improved. According to market research IRI Worldwide, which analyzes scan data from large off-premise retailers, portfolio-wide sales are up over 9 percent.
So what does Burwick bring to the table?
While at Peet’s, Burwick is credited with doubling sales from $395 million to nearly $800 million, as the company opened more than 70 new cafes and launched a ready-to-drink (RTD) line distributed through its own cold-chain DSD network.
That experience opening retail outposts could come in handy at Boston Beer, which has been slow to react to a booming, direct-to-consumer taproom trend that has swept the nation and now accounts for nearly 10 percent of all craft beer sales.
Boston Beer is currently eyeing a vacant space in downtown Boston for a satellite taproom, and it recently renovated its research and development brewery in the Jamaica Plain neighborhood of Boston to include a larger taproom that sells full pints.
“Dave was able to find opportunities for growth, often outside of Peet’s traditional and narrowly defined business,” Koch told Brewbound. “He was able to look at the landscape and find suitable ways for Peet’s to grow, in ways that hadn’t in the past.”
Burwick’s tenure at Peet’s also saw the company expand its reach with the acquisition of two super-premium coffee brands — Intelligentsia and Stumptown in 2015. The company also made a $7.5 million investment in kombucha maker Revive last year.
“He’s been able to nurture innovation and entrepreneurship, and understands the downside of becoming corporate,” Koch said.
Prior to joining Peet’s, Burwick, originally from Worcester, Mass., worked in various roles at PepsiCo, followed by more than two years as North American president for Weight Watchers.
Koch, Roper, and Burwick all received MBAs from Harvard Business School.
A press release with additional information is included below.
Editor’s Note: BevNET assistant editor Martin Caballero contributed to this report.
Boston Beer Company Names Dave Burwick President and CEO; Beverage Industry Veteran to Lead Company Through Next Phase of Growth
BOSTON, Feb. 14, 2018 /PRNewswire/ — The Boston Beer Company, Inc. (NYSE: SAM) today announced that it has selected Dave Burwick to succeed Martin Roper as President and Chief Executive Officer. It is expected Burwick will assume the role during the second quarter. Jim Koch will continue in his role as Company Founder and Chairman.
Burwick has an established track record of innovation and business success in the beverage and consumer goods industries and has served on Boston Beer’s Board of Directors since 2005. In late 2012, Burwick was named President and CEO of Peet’s Coffee. Under Burwick’s leadership, Peet’s has more than doubled its sales and profits over the past five years. Prior to joining Peet’s, Burwick served as President of North America for Weight Watchers and in numerous leadership roles over 20 years at PepsiCo, including CMO of Pepsi-Cola North America.
“The search committee unanimously agreed that Dave Burwick has the business experience and skills to lead the company forward and will be a great culture fit, appreciating how unique and special Boston Beer is as an organization,” said Jim Koch. “We took our time to find the right person with the right intangibles – character, insights, personality and leadership skills.”
“I’m thrilled to join the Boston Beer team and continue the mission of brewing great beers and winning in the beer and cider categories,” said Dave Burwick. “As a Director for over 12 years, I have admired the accomplishments of Jim, Martin and the team, and I share their passion for brewing quality, and their commitment to drinkers, wholesalers and retailers that is demonstrated in everything the company does. I look forward to leading the team and believe the future is bright for Samuel Adams and all our other brands.”
Burwick’s appointment follows Martin Roper’s February 2017 announcement that he planned to step down in 2018 after leading the company for more than 17 years as President and CEO to explore other opportunities. Under Roper’s leadership, the company quadrupled, growing from scrappy up-and-comer to the most successful leader of the Craft beer revolution and a leading player in the hard cider and high-end beer categories. It is anticipated that Roper will resign as President and CEO, and as a Director when Burwick joins the company.
“I am grateful for Martin’s leadership of the company and his significant contribution to the incredible growth we’ve seen over the past two decades,” shared Jim Koch. “Under his leadership, we were able to maintain our entrepreneurial, innovative culture, while building a highly professional organization. Equally as important as our performance under Martin’s stewardship, I am grateful for his partnership and friendship, as we built Boston Beer from the ground up. No company could have had a better CEO than Martin Roper.”
“I am incredibly proud of everything that the employees of Boston Beer have accomplished over my 23-year tenure and I know that they and our leadership team are ready to work with Dave to continue to build on our current momentum,” said Martin Roper. “I am excited to see where Dave will lead the Company.”
Boston Beer’s board-appointed search committee, which included Jim Koch, worked closely with executive recruitment firm, Korn Ferry, to conduct the year-long, comprehensive search that included interviewing and evaluating a broad spectrum of quality candidates.
ABOUT THE BOSTON BEER COMPANY
The Boston Beer Company, Inc. (NYSE: SAM) began in 1984 and today brews more than 60 styles of Samuel Adams beer. Our portfolio of brands also includes Angry Orchard Hard Cider, Twisted Tea, Truly Spiked & Sparkling, as well as several other craft beer brands brewed by A&S Brewing, our craft beer incubator. For more information, please visit our investor relations website at www.bostonbeer.com, which includes links to all of our respective brand websites.