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Boston Beer's Pumpkin Smashing Bud, Coors

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Even when the MolsonCoors soaked up A-B InBev's 0.1% market share, it dropped production by 1.1 million barrels. Boston Beer, meanwhile, increased its production 29,000 barrels last year and has bloated its output by 35% in five years.

But can a pumpkin ale that took root as an employee favorite at Boston Beer's Halloween parties really grow an entire brand? Let's put it this way: Boston Beer's market share is 0.9%, leaving 99.1% of the market untapped ... as it were. It has three brewing facilities, none west of Ohio, and more than 20 varieties. That relative smallness (Boston Beer is still the second-largest craft brewer by volume behind Pennsylvania's Yuengling) and breadth of offerings is part of the reason Boston Beer's share price has more than tripled from $19 early last year to just above $70 today, and its market cap stands at just over $1 billion -- well below AB InBev's $100 billion but way above the $111 million cap of the Craft Brewers Alliance (HOOK), which makes Red Hook, Widmer, Goose Island and Kona and is partially owned by A-B InBev. It's growth that's being savored by drinkers, investors and brewers alike.

"I drink lager almost all the time, but there are times when I want a pumpkin ale and there are times you want anything else for that moment," says Bert Boyce, a brewer at Boston Beer's research facility in Boston. "I think it comes down to the fact that we're riding this wave -- and I love being on this wave, it's what gets me up in the morning -- of what can we do next."

Yes, Boston Beer's ingredients tend to be more expensive -- the pumpkin in Harvest Pumpkin Ale comes from a small puree maker in North Carolina. Sure, it and other craft brewers still face an enormous challenge from big brewers willing to flood the market with crafty clones such as Budweiser American Ale, Bud Light Golden Wheat, Shock Top and the entire Blue Moon line. But even the smallest brewers are experiencing big growth, with Dogfish Head growing from 30,000 barrels in 2005 to more than 97,000 today, California's Stone Brewing skipping from 34,000 barrels five years ago to 99,000 last year and Colorado-based New Belgium exploding from 370,000 barrels to 583,000 in just half a decade.

"The fact that we're releasing so many new beers says that the craft brew community is as tight as it's ever been and that craft brew drinkers are as demanding and also as happy and fulfilled as they've ever been," Boyce says. "We are in the business to provide the perfect beer for the perfect time."

Right now, it's time for a pumpkin ale.

-- Written by Jason Notte in Boston.



>To contact the writer of this article, click here: Jason Notte.

>To follow the writer on Twitter, go to http://twitter.com/notteham.

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Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.
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