Boston Beer (SAM) risk factors, FY2024 10-K

Other

1. 01The Company faces substantial competition
2. 02The Beyond beer and Traditional beer markets within the United States (“US Beer Market”) is highly competitive due to the participation of large domestic and international brewers and the large number of regional and local competitors, who distribute similar products that have similar pricing and target drinkers
3. 03Changes in public attitudes and drinker tastes could harm the Company’s business. Regulatory changes in response to public attitudes could adversely affect the Company’s business
4. 04The Company is dependent on its distributors

Risks Related to the Company's Business and Operations

1. 05There is no assurance that the Company will grow its business in the future or that the Company can adapt to the challenges of the changing competitive environment
2. 06The Company’s inability to react to changes in demand could have a material adverse effect on the Company’s operations or financial results
3. 07its ability to reduce risk of both over and under supply by improving and automating manual internal processes for demand and production planning
4. 08The Company’s advertising and promotional investments may affect the Company’s financial results but not be effective
5. 09In 2020 and 2021, as the Truly and the Twisted brand families grew significantly and overall demand for cans increased, the Company experienced supply constraints for cans. These supply constraints impacted the Company’s production schedules and increased can cost by having to use a more expensive supplier
6. 10The Company is dependent on key ingredient suppliers, including foreign sources; its dependence on foreign sources creates foreign currency and tariff exposure for the Company; the Company’s use of natural ingredients creates weather and crop reliability and excess/shortage inventory exposure for the Company
7. 11The Company purchased most of the malt used in the production of its beer from four suppliers during 2024. The Company is exposed to the quality of the barley crop each year, and significant failure of a crop would adversely affect the Company’s costs
8. 12The Company’s new product development can also be constrained by any limited availability of the desired ingredients. Growth rates higher than planned or the introduction of new products requiring special ingredients could create demand for ingredients greater than the Company can source
9. 13The Company’s reliance on production facilities owned by others and an inability to leverage investment in the Company-owned breweries could have a material adverse effect on the Company’s operations or financial results
10. 14The Company has an experienced leadership team with an established track record of business success and innovation in the beverage and consumer goods industries
11. 15The Company has significantly increased its product offerings and distribution footprint, which increases complexity and could adversely affect the Company’s performance and financial results
12. 16Changes in drinker attitudes on brand equity and reliance on the Company’s founders in the Samuel Adams and Dogfish Head brand communications may adversely affect demand for the Company’s production and results of operations
13. 17The Company’s operations are subject to certain operating hazards that could result in unexpected costs or product recalls that could harm the Company’s business
14. 18The Company relies upon complex information systems and vulnerabilities or disruptions of these systems could expose us to liability and harm our business and operations
15. 19We use AI in our business, and challenges with properly managing its use could result in harm to our brands, reputation, business or customers
16. 20An increase in energy costs could harm the Company’s financial results
17. 21The Class B shareholder has significant control over the Company

Risks Related to Law and Regulations

1. 22Changes in tax, environmental and other regulations, government shutdowns or failure to comply with existing licensing, trade or other regulations could have a material adverse effect on the Company’s financial condition
2. 23There is no guarantee that the Company will not face litigation that could harm the Company’s business

Risks Related to General Economic Conditions

1. 24The Company’s operating results and cash flow may be adversely affected by unfavorable economic, financial and societal market conditions