Certain parts of the registrant’s definitive Proxy Statement for its 20212024 Annual Meeting to be held on May 20, 20217, 2024 are incorporated by reference into Part III of this report.

PART I.

Item 1. BusinessBusiness

General

General

The Boston Beer Company, Inc. (“Boston Beer” or theand certain subsidiaries (the “Company”) is a high-end alcoholic beverage company and one of the largest craft brewersare engaged in the business of selling alcohol beverages throughout the United States. In fiscal 2020,States and in selected international markets, under the trademarks “The Boston Beer sold approximately 7.4 million barrels of its proprietary productsCompany®”, “Twisted Tea Brewing Company®”, “Hard Seltzer Beverage Company”, “Angry Orchard® Cider Company”, “Dogfish Head® Craft Brewery”, “Dogfish Head Distilling Co.”, “Angel City® Brewing Company”, “Coney Island® Brewing Company”, "Green Rebel Brewing Co.", "Truly Distilling Co.", “American Fermentation Company”, “General Admission Brewing Co.”, “TeaPot Worldwide”, and “Sun Cruiser Beverage Co.". The Company’s brands include Truly Hard Seltzer^®, Twisted Tea^®, Samuel Adams^®, Angry Orchard^® Hard Cider and Dogfish Head^® Craft Brewery, as well as other local craft beer brands.

Boston Beer produces alcohol beverages, including flavored malt beverages, hard seltzer, malt beverages (“beers”),beer, and hard cider at Company-owned breweries and its cidery and under contract arrangements at other brewery locations. The four primary Company-owned breweries are focused on production and research and development, and includeincluding breweries located in Boston, Massachusetts (the “Boston Brewery”), Cincinnati, Ohio (the “Cincinnati Brewery”), Milton, Delaware (the “Milton Brewery”) and Breinigsville, Pennsylvania (the “Pennsylvania Brewery”). These breweries, with the exception of the Pennsylvania Brewery, have tap rooms for retail sales on site. The Company produces a small but growing amount of distilled spirits and spirits based ready to drink beverages (“spirits RTDs”) at the Milton Brewery.Brewery and other contract brewery locations.

The Company also owns fiveoperates three smaller local breweries that are mainly focused on brewing and packaging beers for retail sales on site at tap rooms and gift shops, restaurant activities, developing innovative and traditional beers and in some cases, supporting draft and package accounts in the respective local market areas. These local breweries are located in Boston, Massachusetts (the “Samuel Adams Boston Downtown Tap Room”), Rehoboth, Delaware (“Dogfish Head Brewings and Eats”), Los Angeles, California (the “Angel City Brewery”Brewery" and "Truly LA”), Brooklyn, New York (the “Coney Island Brewery”) and Miami, Florida (the “Miami Brewery”Cincinnati, Ohio ("Cincincatti Tap Room").

In addition, the Company owns an apple orchard and cidery located in Walden, New York (the “Orchard” and “Cidery”), a restaurant in Rehoboth, Delaware (“Chesapeake & Maine”) and a boutique inn in Lewes, Delaware (the “Dogfish Inn”).

The Company sells its beverages in various packages. Sleek cans, standard cans and bottles are sold primarily for off-premise retailers, which include grocery stores, club stores, convenience stores, liquor stores, and liquor stores.other traditional and e-commerce retail outlets. Kegs are sold primarily for on-premise retailers, which include bars, restaurants, stadiums and other venues.

The Company’s principal executive offices are located at One Design Center Place, Suite 850, Boston, Massachusetts 02210, and its telephone number is (617) 368-5000.

Industry Background

Most of the Company’s products are sold through off-premise retailers and the Company estimates the size of its markets using third-party metrics from measured off-premise channels, which is standard in the beer industry.

The Company was founded in 1984 as a craft brewery and continues to compete in the craft beer category primarily with its Samuel Adams and Dogfish Head brands. The Company has a strong history of innovation and has internally developed brands outside of the craft beer category that are among the leaders in their respective categories. These brands include Twisted Tea, a flavored malt beverage introduced in 2001, Angry Orchard, a hard cider introduced in 2009, and Truly Hard Seltzer, a hard seltzer introduced in 2016.

The Company’s flavored malt beverages, hard seltzers, beers, and hard ciders are primarily positioned in the market for High End beer occasions. The Company defines “High End” beers as including hard seltzer and flavored malt beverages, craft beers, domestic specialty beers, and most imported beer and hard cider that are called for by a High End beer drinker occasion. High End beers and beer occasions (the “High End category”) are determined by higher price, quality, image and taste, as compared with regular domestic beers.

This category has seen high single-digit compounded annual growth over the past ten years.  The Company believes that the High End category is positioned to increase market share, as drinkers continue to trade up in taste and quality. Boston Beer is one of the largest suppliers in the High End category in the United States.  The Company estimates that in 2020 the High End category percentage volume growth was approximately 25%, with the craft beer category volume growth approximately 13%, and total beer category volume growth approximately 10%.

 The Company believes that the High End category is now over 36% of the United States beer market and the Company has approximately a 9% market share of the High End category.

The domestic beer industry, excluding the High End category, has experienced a decline in shipment volume over the last twenty years. The Company believes that this decline is due to declining alcohol consumption per person in the population, drinkers trading up to drink high quality,high-quality, more flavorful beers, health and wellness trends and increased competition from wine and spirits companies. The Company estimates that the High End full year percentage volume changes in 2021, 2022 and 2023 were approximately 2%, (3%), and 1%, respectively. These trends are above the United States beer market volume changes in 2021, 2022 and 2023, of (5%), (5%), and (2%), respectively.

Before Prohibition, the United States beer industry consisted of hundreds of small breweries that brewed full-flavored beers. After the end of Prohibition, most domestic brewers shifted production to less flavorful, lighter beers, which use lower-cost ingredients, and can be mass-produced to take advantage of economies of scale in production. This shift towards mass-

producedmass-produced beers coincided with consolidation in the beer industry that by 2008 ultimately resulted in the two largest breweries, Anheuser-Busch InBev (“AB InBev”) and Molson Coors Beverage Company (“Molson Coors”), comprising over 90% of all United States domestic beer production, excluding imports. Duringproduction. At the last twentysame time, during recent years the number of breweries in the United States has increased significantly from approximately 1,500 in 2009 to over 8,00010,000 in 2020.2023. Most of these new breweries are craft (small and independent) brewers. The rise of craft breweries along with the growth of imported beers, flavored malt beverages, and hard seltzers has resulted in a significant decline in the volume of the two largest breweries who now comprise approximately 70%75% of all United States domestic beer production, excluding imports.

The Company and the alcohol industry, at large, is forecasting significant growth in a newly defined category named “Beyond Beer” that includes flavored malt beverages, hard seltzers, spirits RTDs, ciders, and other emerging beverages. The Company believes that the Beyond Beer category in dollars grew approximately 4% in 2022 and 6% in 2023 and is now approximately $9.6 billion at retail and 20% of the combined United States beer market and Beyond Beer category. The Company has approximately a 23% market share of the Beyond Beer category which is the second largest in the category.

Approximately 85% of the Company’s 2023 volume is in the Beyond Beer category. The Company believes that the Beyond Beer category is positioned to increase market share.

Description of the Company’s Business

The Company’s business goal is to become the leading supplier in the High End categoryand Beyond Beer categories by creating and offering high quality alcohol beverages. With the support of a large, well-trained sales organization and world-class brewers, the Company strives to achieve this goal by offering great hard seltzers, beers and hard ciders, andconsumer-responsive beverages, increasing brand availability and awareness through traditional media and digital advertising, point-of-sale, promotional programs, and drinker education.education and engagement.

The Company’s hard seltzers, beers and hard ciderbeverages are sold by the Company’s sales force to the same types of customers and drinkers in similar size quantities, at similar price points and through substantially the same channels of distribution. These beverages are manufactured using similar production processes, have comparable alcohol content and generally fall within the same regulatory environment.

The Company’s strategy is to create and offer a world-class variety of traditional and innovative alcohol beverages. The Company’s primary brands which include the Twisted Tea, Truly Hard Seltzer, Twisted Tea, Samuel Adams, Angry Orchard and Dogfish Head brands are all available nationally. The Twisted Tea brand family has grown each year since the product was first introduced in 2001 and has established a loyal drinker following and has become the largest selling flavored malt beverage brand. In 2016, the Company began national distribution of the Truly Hard Seltzer brand and it maintained its place as one of the leading brands in the hard seltzer category in 2020. The Twisted Tea brand family has grown each year since the product was first introduced in 2001 and has established a loyal drinker following.2023. The Samuel Adams brand began in 1984 and the brand is recognized as one of the largest and most respected craft beer brands with a particular focus on lagers and seasonal beers. The Angry Orchard brand was launched in 2011 and since 2013, Angry Orchard has been the largest selling hard cider in the United States. The Dogfish Head brand began in 1995 and is recognized as one of the most innovative and respected craft beer brandsand spirits brand with a particular focus on India Pale Ales (“IPAs”) and sour beers.spirits RTDs. In addition to its primary brands, the Company has threetwo local brewery brands, Angel City® and Coney Island®, that primarily focus on tap rooms and local and regional distribution, which include Angel City^®, Coney Island^® and Concrete Beach^®.distribution.

The Company sellsentered the market for spirits RTDs through its beveragesDogfish Head brand in various packages. Sleek cans, standard cans and bottles are sold primarily for off-premise retailers, which include grocery stores, club stores, convenience stores and liquor stores. Kegs are sold primarily for on-premise retailers, which include bars, restaurants, stadiums and other venues.

2021 followed by its Truly Hard Seltzer

The Company’s Truly Hard SeltzerVodka Soda brand generally competes within the hard seltzer category that has similar characteristics to the beer industry for reporting and regulatory purposes.  This category is growing rapidly in its early stages of development over the last 5 years and is highly competitive and includes large international and domestic competitors as well as many smaller national, regional and local craft breweries and hard seltzer companies.2022. The Company believes thatis planning to launch additional RTD brands during the hard seltzer category comprises approximately 7%first quarter of United States beer consumption and that the volume comprising the hard seltzer category grew approximately 160% in 2020.

The Company offers seventeen styles of hard seltzer in the Truly brand family, most of which are available nationally in the United States. The majority of the promotional and distribution efforts for the Truly brand family are focused on sleek can variety packages2024 which include Truly Lemonade Seltzer Mix Pack, Truly Berry Mix Pack, Truly Tropical Mix Pack, Truly Citrus Mix PackTequila Soda brand and TrulySun Cruiser, a new spirit-based hard tea brand made with vodka.

In 2021, the Company entered separate licensing agreements with PepsiCo, Inc. (“Pepsi”) and Jim Beam Brands Co. (“Jim Beam”) to develop, market and sell alcohol beverages. During 2022 and 2023, the Company sold products under the brand names ‘Hard Mountain Dew’ under the Pepsi agreements and ‘Sauza Agave Cocktails’ and ‘Jim Beam Kentucky Coolers’ under the Jim Beam agreements. Also, the Company collected royalties under the Jim Beam agreement on Jim Beam shipments of ‘Truly Vodka’ and ‘Twisted Tea Seltzer Mix Pack.Whiskey’. While the Company believes these agreements represent strategic opportunities to increase volume in the longer term, these combined brands represented approximately 2% of net revenue in 2023.

Twisted Tea

The Company’s Twisted Tea products generally competescompete within the flavored malt beverage (“FMB”) category of the beer industry (and the Company’s Twisted Tea products are included in generic references to the Company’s “beers” in this report).industry. The Company believes that the FMB category comprises approximately 5%7% of United States beer consumption and that the volume comprising the FMB category grew approximately 13%9% in 2020.2022 and 16% in 2023. This category is highly competitive due to, among other factors, the presence of large brewers and spirits companies in the category as well as many smaller national and regional competitors and a fast pace of product innovation.

The Company offers over ten styles of flavored malt beverages in the Twisted Tea brand family, most of which are available nationally in both the United States and Canada. The majority of the promotional and distribution efforts for the Twisted Tea brand family are focused on Twisted Tea Original, and Twisted Tea Half and Half and variety packs in various standard can packages. During 2023, the Company increased its promotional efforts related to Twisted Tea Light and the style grew over 115% off a relatively small base.

Truly Hard Seltzer

The Company’s Truly Hard Seltzer brand generally competes within the hard seltzer category that has similar characteristics to the beer industry for reporting and regulatory purposes. This category grew rapidly in the early stages of its development and is highly competitive and includes large international and domestic competitors as well as many smaller national, regional and local craft breweries and hard seltzer companies. Beginning in the latter half of 2021 and continuing into 2023, the category saw sharp declines in volume. The Company believes that the hard seltzer category comprises approximately 6% of United States beer consumption and that the volume comprising the hard seltzer category grew 13% in 2021 and then declined 15% in 2022 and 21% in 2023. This relatively sudden and sharp decline has had a significant impact on the Company's business.

The Company offers overthirty styles of hard seltzer in the Truly Hard Seltzer brand family, most of which are available nationally in the United States. The majority of the promotional and distribution efforts for the Truly brand family in 2023 were focused on sleek can variety packages which include, Truly Berry Mix Pack, Truly Tropical Mix Pack, Truly Citrus Mix Pack, Truly Lemonade Seltzer Mix Pack, Truly Fruit Punch Mix Pack, and Truly Margarita Style Pack.

In early 2024, the Company is launching a new 8% ABV “Truly Unruly” variety pack, which will replace its Truly Margarita Style Pack, and a new Truly Party Pack, which will replace its Truly Tropical Pack.

Samuel Adams and Dogfish Head Beers

The Company’s Samuel Adams and Dogfish Head beers generally compete within the craft beer and domestic specialty beer category. The Company believes that the category comprises approximately 8%5% of United States beer consumption and that the volume comprising the category grewdeclined approximately 13%9% in 2020.2022 and 3% in 2023. This category is highly competitive and includes large international and domestic competitors, as well as many smaller national, regional and local craft breweries.

The Company offers over twenty styles of beer in the Samuel Adams brand family and the brand is recognized for helping launch the craft beer industry. Samuel Adams Boston Lager®is the Company’s flagship beer that was first introduced in 1984.

The Samuel Adams Seasonal program of beers was originally introduced in the late 1980’s and early 1990’s.includes various limited availability seasonal beers and variety packs.

The majority of the promotional and distribution efforts for the Samuel Adams brand family are focused on Samuel Adams Boston Lager and the Samuel Adams Seasonal program as well as Samuel Adams Just the Haze, a non-alcoholic hazy IPA that was released in early 2021 and Samuel Adams Gold Rush, a non-alcoholic golden lager that was released in early 2023. The two Samuel Adams non-alcoholic beers combined grew over 80% in 2023 and represent over 5% of the brands total volume. Most Samuel Adams beers are available nationally in various bottle, standard can, and keg packages.

The Samuel Adams brand also releases a variety of specialty package and draft beers brewed in limited quantities at its Samuel Adams Downtown Boston Tap Room, Samuel Adams Boston Brewery Tap Room, and Samuel Adams Cincinnati Brewery Tap Room.

The Company offers over twenty-five styles of beer in the Dogfish Head brand family. The Dogfish Head brand began in 19931995 and it is recognized as an early leader in bringing culinary innovations to the U.S. craft beer market. The majority of the promotional and distribution efforts for the Dogfish Head brand family are focused on continually-hopped Dogfish Head 60 Minute and 90 Minute IPAs, along with Dogfish Head SeaQuench, an innovative session sour, and Dogfish Head Slightly Mighty, a low calorie IPA.seasonal variety packs. These four styles are offered in various can, bottle and keg packages. The Company also offers over 15 styles of distilled spirits under the Dogfish Head brand in small quantities and to limited markets. The Dogfish Head brand also releases a variety of specialty package and draft beers brewed in limited quantities at its Dogfish Head Brewings and Eats brewery.and Milton Brewery tasting room locations. The Company does not own distribution rights to the Dogfish Head beer and distilled spirits brands outside of the United States and Canada.

Angry Orchard Hard Cider

The Company’s Angry Orchard ciders compete within the hard cider category that has similar characteristics to the beer industry. The Company believes that the hard cider category comprises less than 1%approximately 0.6% of United States beer consumption and that the volume comprising the category grew 4%declined 10% in 2020.2022 and 3% in 2023. This category is small and highly competitive and includes large international and domestic competitors, as well asthe competition consists mostly of many small regional and local hard cider companies.

The Company offers over ten styles of hard cider in the Angry Orchard brand family, most of which are available nationally in the United States.States in various bottle, can, and keg packages. The majority of the promotional and distribution efforts for the Angry Orchard brand family are focused on Angry Orchard Crisp Apple, Angry Orchard Rosé and Angry Orchard Crisp Unfiltered in various bottle, can and keg packages.Apple. The Angry Orchard brand also releases a variety of specialty package and draft ciders fermented in limited quantities at isits Company-owned Orchard and Cidery in Walden, New York.

Dogfish Head Spirit RTDs, Truly Vodka Soda and Truly Tequila Soda

The Company’s Dogfish Head Distilling Canned Cocktails brand and Truly Vodka and Tequilla Soda brands compete in the spirits RTD category. The Company believes that the spirits RTD category comprises over 11% of the United States Beyond Beer market and that the dollar value comprising the category increased 78% and 54% in 2022 and 2023, respectively. This category is small and highly competitive and includes large international and domestic competitors, as well as many small regional and local craft distilling companies.

The Dogfish Head brand began distilling spirits in 2002 and is considered one of the original craft distilleries. The Company offers over 15 styles of distilled spirits under the Dogfish Head brand in small quantities that are sold in limited markets. In 2021, the Company entered the market for spirits RTDs through its Dogfish Head brand.

The Company currently offers seven styles of spirits RTDs under the Dogfish Head brand that are available nationally in sleek can and sleek can variety packages.

The Company currently offers eleven styles of spirits RTDs under the Truly Vodka Soda brand that are available nationally in sleek can and sleek can variety packages. In the second half of 2023, the Company introduced its Truly Tequila Soda variety pack to limited test markets. The Company is planning to launch the Truly Tequila Soda variety pack nationally during the first quarter of 2024.

The Company continually evaluates the performance of its various hard seltzer, beer and hard cider productsbeverages and the rationalization of its product linelines as a whole. Periodically, the Company discontinues certain styles and packages. For example, during the first half of 2023, the Company discontinued Truly Iced Tea Variety Pack and is planning to discontinue Truly Margarita Style Variety Pack and Truly Tropical Variety Pack during the first half of 2024. Certain styles or brands put on hiatus or discontinued in previous years may be produced for the Company’s variety packs or reintroduced.

The Company’s Dogfish Head Brewery Transaction

On May 8, 2019, the Company entered into definitive agreements to acquire Dogfish Head Brewery (“Dogfish Head”) and various related operations (the “Transaction”), through the acquisition of all of the equity interests held by certain private entities in Off-Centered Way LLC, the parent holding company of the Dogfish Head operations. In accordance with these agreements, the Company made a payment of $158.4 million, which was placed in escrow pending the satisfaction of certain closing conditions. The Transaction closed on July 3, 2019, for total consideration of $336.0 million consisting of $173.0 million in cash and 429,291 shares of restricted Class A Common Stock that had an aggregate market value as of

July 3, 2019 of $163.0 million, after taking into account a post-closing cash related adjustment. As required under the definitive agreements, 127,146 of the 429,291 shares of restricted Class A Stock were placed in escrow and will be released no later than July 3, 2029.Product Innovations

These shares had a market value on July 3, 2019 of $48.3 million. The timing of the release of these escrowed shares is primarily related to the continued employment with the Company of Samuel A. Calagione III, one of the two Dogfish Head founders. As part of the transaction, distribution rights to the Dogfish Head brand outside of the United States and Canada were retained by the Dogfish Head founders. The fair value of the Transaction is estimated at approximately $317.7 million.

The results of operations from Dogfish Head have been included in the Company’s consolidated statements of operations since the July 3, 2019 Transaction closing date.

Product Innovations

The Company has a proven track record of innovation and building new brands and is committed to maintaining its position as a leading innovator. To that end, the Company continually tests new hard seltzers, beers, hard ciders, distilled spirits and other alcohol beverages and may sell them under various brand labels for evaluation of drinker interest. The Boston Brewery, the Milton Brewery and the Orchard, along with its other larger breweries and brewery tap rooms spend significant time ideating, testing and developing alcohol beverages for the Company’s potential future commercial development and evaluating ingredients and process improvements for existing beverages.

The Company’s most significant innovationinnovations in 2020 was2023 were the nationallaunches of new styles of its Truly Vodka Soda brand and its launch in limited markets of Truly Tequila Soda and Slingers, a new flavored malt beverage brand. In the first quarter of 2024, the Company is planning to launch Truly Lemonade Hard Seltzer Variety Pack, an innovativeTequila Soda nationally and expand Slingers to more markets. Also, during the first quarter of 2024, the Company is planning to launch two new brands in limited markets. These two new brands are Sun Cruiser, a new vodka based hard seltzer withtea and General Admission, a robust flavor, 100 caloriesnew non-alcoholic beer. During the rest of 2024, the Company has plans to add new beverage styles and 1 gramreformulate existing styles of sugar which was among the top introductions in the Hard Seltzer Category during 2020.  beverages.

In May 2021, the Company has planned for several new product introductions,announced that it was establishing a subsidiary to serve as a dedicated research and innovation hub in the federally regulated market of whichCanada focused on non-alcoholic cannabis beverages. This subsidiary enables the most significant include Truly Iced Tea Hard Seltzer, Twisted Tea ‘Slightly Sweet’, Samuel Adams ‘Wicked Hazy’, Samuel Adams ‘Wicked Easy’, Samuel Adams ‘JustCompany to develop and pilot unique cannabis beverages, while cannabis regulations continue to evolve in the Haze’, Angry Orchard Hard Fruit CiderUnited States and Dogfish Head Scratch-Made Canned Cocktails.  Samuel Adams’ Just the Haze is the Company’s first non-alcoholic beer.worldwide. The Company isbegan selling limited quantities of cannabis beverage products in Canada under the TeaPot brand during the second half of 2022. The Company currently in the early stagesdoes not have plans to produce or sell any cannabis products outside of these introductions.Canada.

Sales, Distribution, and Marketing

As dictated by the legal and regulatory environment, most all of the Company’s sales are made to a network of over 400300 wholesalers in the United States and to a network of foreign wholesalers, importers or other agencies (collectively referred to as “Distributors”). These Distributors, in turn, sell the products to retailers, such as grocery stores, club stores, convenience stores, liquor stores, bars, restaurants, stadiums and other traditional and e-commerce retail outlets, where the products are sold to drinkers, and in some limited circumstances to parties who act as sub-distributors. The Company sells its products predominantly in the United States, but also has markets in Canada, Europe, Israel, Australia, New Zealand, the Caribbean, the Pacific Rim, Mexico, and Central and South America.

With few exceptions, the Company’s products are not the primary brands in its Distributors’ portfolios. Thus, the Company, in addition to competing with other hard seltzers, beers and hard cidersbeverages for a share of the drinker’s business, competes with other brewersbeverage companies for a share of the Distributor’s attention, time and selling efforts. During 2020,2023, the Company’s largest individual Distributor accounted for approximately 2%3% of the Company’s gross sales. The top three individual Distributors collectively accounted for approximately 5%7% of the Company’s gross sales. In some states and countries, the Company’s contracts with its Distributors may be affected by laws that restrict the enforcement of some contract terms, especially those related to the Company’s right to terminate the relationship.

Most

Historically, most of the Company’s products arewere shipped within days of packaging, resulting in limited finished goods at the Company’s breweries and third-party breweries.production facilities. The Company receivesreceived most of its orders from Distributors in the first week of a month for products to be shipped the following month. Historically, Distributors would carry three to five weeks of packaged inventory and three to four weeks of draft inventory and the Company has beenwas able to meet Distributor orders with limited out of stocks.

Beginning in 2019, primarily as a result of higher than anticipated demand for the Truly Hard Seltzer and Twisted Tea brands and supply chain constraints, the Company began to have out of stocks and at times haswas not been able to fully meet Distributor demand, particularly at seasonal peaks during the peak summer months. In response to these out of stocks, the Company began working with certain Distributors on plans to increase Distributor inventories of packaged inventory of Truly Hard Seltzer and Twisted Tea brands to ensure that drinker demand cancould be met. Beginning in the second half of 2021, as the hard seltzer category slowed significantly more than industry expectations, both Company inventory and Distributors inventory in terms of days on hand increased above historical levels. In 2021, this resulted in write-offs of excess inventory at the Company’s breweries and warehouses and lower orders as distributors aggressively reduced their inventory levels.

During 2022, the Company produced and sourced materials for Truly Hard seltzer and some of its newer brands at the upper end of its projections to avoid out of stocks at retail. This led to improved customer service levels and significantly fewer out of stocks but resulted in additional write-offs of excess inventory at the Company’s breweries and warehouses. During 2023,

the Company significantly improved its supply chain functions which led to reduced inventories internally and at distributors, while improving customer service levels and significantly reducing write-offs of excess inventory. The Company continues to work on its supply chain transformation initiatives to better manage inventory and further reduce write-offs of excess inventory.

The Company believes distributor inventory

as of December 26, 2020 averaged approximately 5 weeks on hand and30, 2023 was at an appropriate level based on supply chain capacity constraintsfor each of its brands and inventory requirements to support the forecasted growth. The Company expects wholesaler inventory levels in terms ofaveraged approximately four weeks on hand compared to be between 3 and 7five weeks for most of 2021.on hand at December 31, 2022.

Boston Beer has a sales force of approximately 515over 475 people, which the Company believes is one of the largest in the domestic beer industry. The Company’s sales organization is designed to develop and strengthen relations at the Distributor, retailer and drinker levels by providing educational and promotional programs. The Company’s sales force has a high level of product knowledge and is trained in the details of the brewing and selling processes. Sales representatives typically carry samples of the Company’s hard seltzers, beers and hard ciders, certain ingredients,beverages and other promotional materials to educate wholesale and retail buyers about the quality and taste of the Company’s products. The Company has developed strong relationships with its Distributors and retailers, many of which have benefited from the Company’s premium pricing strategy and growth.

The Company also engages in media campaigns, — including television, digital and social media, radio, billboards, and print. These media efforts are complemented by participation in sponsorships, which currently include the National Hockey League,United States Soccer Federation, the Boston Red Sox, and other professional sports teams, the Boston Marathon, local concert and festivals, and industry-related trade shows and promotional events at local establishments, to the extent permitted under local laws and regulations. The Company uses a wide array of point-of-sale items (banners, neon signs, umbrellas, glassware, display pieces, signs and menu stands) designed to stimulate impulse sales and continued awareness.

COVID-19

The Company began seeing the impact of the COVID-19 pandemic on its business in early March 2020.  The direct financial impact of the pandemic has primarily shown in significantly reduced keg demand from the on-premise channel and higher labor and safety-related costs at the Company’s breweries. In fiscal year 2020, shipments of kegs decreased to 3% of total shipment volume from 11% of shipments in 2019.  Also, in fiscal year 2020, the Company recorded COVID-19 related pre-tax reductions in net revenue and increases in other costs that total $16.0 million.  In addition to these direct financial impacts, COVID-19 related safety measures resulted in a reduction of brewery productivity. This has shifted more volume to third-party breweries, which increased production costs and negatively impacted gross margins.  Other impacts of COVID-19 on the Company’s business are discussed in “Packaging and Ingredients” below.

Packaging and Ingredients

Historically, the Company has been successful in obtaining sufficient quantities of the packaging materials and ingredients used in the production of its beverages. In the fourth quarter ofDuring 2020 and 2021, the Company experienced some can, cardboard wraps and glass shortagessupply chain constraints in packaging materials, primarily cans, that impacted the Company’s production schedules.schedules and increased can costs as a result of using a more expensive can supplier. The Company enters into limited-term supply agreements with certain vendors in order to receive preferential pricing. The Company maintains competitive sources for most all packaging materials and ingredients. In 2020,2023, certain flavorings, crowns and labels were each supplied by a single source; however, the Company believes that, given time to adjust, alternative suppliers are available. The most significant packaging and ingredients include:

Cans. Truly Hard Seltzer brand beverages are primarily packaged in sleek cans and Twisted Tea brand beverages are primarily packaged in standard cans. In 2020, over 74%2023, approximately 79% of the Company’s total volume was packaged in cans and the Company expects that percentage to increase further increase in 2021.2024. The demand for cans in the beverage industry has significantly increased during 2020 and 2021 and there has beenwas a shortage of capacity, as can manufacturers attempt to adjustadjusted their supply chains to keep up with the increased demand which has furtherhad accelerated duringbeginning in 2020 as the category grew household penetration and alcohol consumption shifted from on-premise to off-premise. In 2020,2021, as the Truly brand family and the Twisted brand families have grown significantly,grew, the Company has experienced supply shortages and in the fourth quarter of 2020, these supply shortages impacted the Company’s production schedules. The Company is working closely with its threeschedules and increased can suppliers to ensure there are no further supply disruptionscosts as a result of using a more expensive can supplier. During 2022 and 2023, the Company has an adequate supply. Thedid not have any significant disruptions in its can supply and the Company currently believes that it will have a sufficient supply of cans in 2021.2024.

Flavorings.

Flavorings and Fruit Juice. The Company’s hard seltzers, beers and hard cidersbeverages include many unique and proprietary flavors and combinations of flavors and some of these flavorings are single sourced. Truly Hard Seltzer and Twisted Tea brand beverages are particularly reliant on the use of flavorings and a variety of flavors as part of their appeal to drinkers. The Company is working closely with various flavoring and fruit juice suppliers to ensure it has an adequate supply and currently believes that it will have sufficient supply of flavorings and fruit juice in 2021.  2024.

Cardboard. 

Cardboard. The Company’s hard seltzers, beers and hard cidersbeverages are packaged primarily in cardboard wraps, carriers and cardboard shipping cases. During the fourth quarter of 2020, the Company hadexperienced a disruption to its supply of cardboard wraps which impacted its production schedules. The Company is working closely with its various cardboard suppliers to ensure that there are no further disruptions andSince 2020, the Company has an adequate supply. Thenot had any significant disruptions in its supply of cardboard and the Company currently believes that it will have a sufficient supply of cardboard wraps in 2021.2024.

Glass.Many Some of the Company’s beers and cidersbeverages are sold primarily in glass bottles. Due to the COVID -19COVID-19 pandemic during 2020 and 2021, the demand for glass bottles in the beverage industry has significantly increased and there has beenwas a shortage of capacity, as glass manufacturers attemptneeded to adjust their supply chains to keep up with the increased demand. DuringThe most recent disruption was during the fourth quarter of 2020, which impacted production schedules. Since 2020, the Company has not had a disruption toany

significant disruptions in its supply of glass bottles which impacted its production schedules. The Company is working closely with its two bottle suppliers to ensure there are no further supply disruptions and the Company has an adequate supply. The Company currently believes that it will have a sufficient supply of glass in 2021.2024.

Malt.

Malt. The two-row varieties of barley used in the Company’s malt are mainly grown in the United States and Canada. The 20202023 North American barley crop, which will support 20212024 malt needs, was generally consistent with historical long-term averages with regard to both quality and quantity. The Company purchased most of the malt used in the production of its beers from four suppliers during 2020. The Company currently has a multi-year contract with one of its suppliers and a one-year agreement with the other supplier.2023. The Company also believes that there are other malt suppliers available that are capable of supplying its needs.

Hops.

Hops. The Company uses Noble hop varieties from Europe for many of its Samuel Adams beers and also uses hops grown in the other areas of Europe, and in the United States, England and New Zealand. Noble hops are grown in several specific areas in Germany and the Czech Republic andthat are recognized for growing hops with superior taste and aroma properties. The Company uses hops in various formats including T-90 hop pellets, T-45 hop pellets and CO2 Extract. The Company stores its hops in multiple cold storage warehouses to minimize the impact of a catastrophe at a single site.

The Company enters into purchase commitments with nineseven primary hop dealers and attempts to maintain a one to two-year supply of essential hop varieties on-hand in order to limit the risk of an unexpected reduction in supply and procures hops needed for new beers, based on its best estimate of likely short-term demand. The Company classifies hops inventory in excess of two years of forecasted usage as other long term assets.

Variations to usage plans could result in hops shortages for specific beers or an excess of certain hops varieties.

Yeast.

Yeast. The Company uses multiple yeast strains for production of its beers, hard seltzers and hard ciders.beverages. While some strains are commercially available, other strains are proprietary. Since the proprietary strains cannot be replaced if destroyed, the Company protects these strains by storing multiple cultures of the same strain at different production locations and in several independent laboratories.

Apples.The Company uses special varieties and origins of apples in its hard ciders that it believes are important for their flavor profiles. In 2020,2023, these apples were sourced primarily from Europe and the United States and include bittersweet apples from France and culinary apples from Italy, Washington State and New York. Purchases and commitments are denominated in Euros for European apples and US Dollars for United StatesAmerican apples. There is limited availability of some of these apple varieties, and many outside factors, including weather conditions, growers rotating from apples to other crops, competitor demand, government regulation and legislation affecting agriculture could affect both price and supply.

Quality Assurance

As of December 26, 2020, the

The Company employed twentyemploys a quality assurance team and brewmasters to monitor the Company’s brewing operations and control the production of its hard seltzers, beers, and hard cidersbeverages both at Company-owned breweries and at the third-party breweriesproduction facilities at which the Company’s products are brewed, fermented or fermented.distilled. Extensive tests, tastings and evaluations are typically required to ensure that each batch of the Company’s hard seltzers, beers and hard cidersbeverages conforms to the Company’s standards. The Company has on-site quality control labs at each of the Company-owned breweries and supports the smaller tap rooms and local breweries with additional centralized lab services.

With the exception of certain specialty and distilled products, the Company includes a clearly legible “freshness” codedate on every bottle, can and keg of its hard seltzer, beers and hard ciders,beverages, in order to ensure that its drinkers enjoy only the freshest products. Boston Beer was the first American brewer to use this practice.

Production Strategy

The Company continues to pursue a production strategy that includes production at breweries owned by the Company and breweries and packaging facilities owned by others. During 2019 and 2020, the Company brewed, fermented and packaged approximately 74% and 65% of its volume at breweries owned by the Company, respectively. The Company made capital investments in 20202023 of approximately $140.0$63.9 million, most of which represented investments in the Company’sthese breweries. These investments were made to increase production, drive efficiencies and cost reductions and support product innovation and future growth.innovation. Based on its current estimates of future volumes and mix, the Company expects to invest between $300$90 million and $400$110 million in 20212024 to meet those estimates. Because actual capital investments are highly dependent on meeting demand, the actual amount spent may well be significantly different from the Company’s current expectations.

The Pennsylvania Brewery, the Cincinnati Brewery and the Milton Brewery produceproduced most of the Company’s shipment volume from breweries owned by the Company during 2020.2023. The Pennsylvania Brewery is the Company’s largest brewery.

Production and retail activities at the eightCompany's local breweries and tap rooms isare mainly for brewing and packaging beers for retail sales on site at tap rooms and gift shops, restaurant activities, developing innovative and traditional beers and in some cases supporting draft and package accounts in the respective local market areas.

The Cidery’s production is mainly for developing new types of innovative hard ciders and fermenting and packaging ciders for retail sales on site at the Cidery and supporting draft and package accounts in the local market area.

During the years ended December 30, 2023 and December 31, 2022, the Company brewed, fermented, and packaged approximately 71% and 65%, respectively, of its volume at Company-owned breweries. In the normal course of its business, the Company has historically entered into various production arrangements with other brewing companies. Pursuant to these arrangements, the Company generally supplies raw materials and packaging to those brewing companies and incurs conversion fees for labor at the time the liquid is produced and packaged. The Company has made up-front payments that were used for capital improvements at these third-party production facilities that it expenses over the period of the contracts.

The Company currently has a brewing and packaging services agreement with subsidiaries of City Brewing Company, LLC (“City Brewing”). During 20192023 and 2020,2022, City Brewing supplied approximately 23%22% and 33%26%, respectively, of the Company’s annual shipment volume, respectively. In accordance with the brewing and packaging services agreement, the Company has paid to City Brewing $71.5$113.4 million dollars for capital improvements at City Brewing facilities and other pre-payments. During 2022, the Company amended its agreement with City Brewing to ensure access to capacity at a new location and continued access at certain existing locations. The agreement includes a minimum capacity availability commitment by City Brewing and the Company is obligated to meet annual minimum volume commitments and is subject to contractual shortfall fees, if these annual minimum volume commitments are not met. The Company has the contractual right to extend its agreement with City Brewing beyond the December 31, 2024 termination date on an annual basis through December 31, 2035.

The Company currently has a production agreement with Rauch North America (“Rauch”). The agreement includes a minimum capacity availability commitment by Rauch and the Company is obligated to meet annual minimum volume commitments and is subject to contractual shortfall fees, if these annual minimum volume commitments are not met. Production under the Rauch agreement commenced in early 2022. The initial term of the agreement expires December 31, 2031 with provisions to extend.

At current production volume projections, the Company believes that it will continuefall short of its future annual volume commitments at certain third-party production facilities and will incur shortfall fees. The Company expenses the shortfall fees during the contractual period when such fees are incurred as a component of cost of goods sold. During 2023 and 2022, the Company recorded $9.5 million and $3.0 million, respectively, in shortfall fees. As of December 30, 2023, if volume for the remaining term of the production arrangements was zero, the contractual shortfall fees, with advance notice as specified in the related contractual agreements, would total approximately $106 million over the duration of the contracts which have expiration dates through December 31, 2031. At current volume projections and based on understandings reached with these third-party production facilities, the Company anticipates that it will recognize approximately $41 million of shortfall fees and expects to add production capacity at breweries and packaging facilities owned by others andrecord those expenses as follows:

The Company currently expects that the percentage of total production at breweries and packaging facilities owned by others will increasebe approximately 24% in 2021.2024. The Company carefully selects breweries and packaging facilities owned by others with:with one or more of: (i) sleek can packaging and automated variety packaging capability and capacity; (ii) first-rate quality control capabilities throughout the process; and (iii) the capability of utilizing traditional brewing, fermenting and finishing methods. Under its brewing and packaging arrangements with third parties, the Company is charged a service fee based on units produced at each of the facilities and bears the costs of raw materials, risk, excise taxes and deposits for pallets and kegs and specialized equipment required to produce and package the Company’s beverages.facilities.

The Company’s international business is supplied by breweries owned by the Company, under third-party brewingproduction and packaging agreements, and production under license at international locations.

While the Company believes that it has alternatives available to it, in the event that production at any of its current locations is interrupted, severe interruptions at the Pennsylvania Brewery, Cincinnati Brewery, or City Brewing facilities would be most problematic, especially in seasonal peak periods. In addition, the Company may not be able to maintain its current economics, if interruptions were to occur, and could face significant delays in starting up replacement production locations. Potential interruptions at breweries include labor issues, governmental actions, quality issues, contractual disputes, machinery failures, operational shutdowns, or natural or other unavoidable catastrophes. Also, as the brewing industry has consolidated and the Company has grown, the capacity and willingness of breweries owned by others where the Company could produce some of its hard seltzers, beers and hard ciders, if necessary, has become a more significant concern. The Company would work with available contract brewers to attempt to minimize any potential disruptions.

Competition

Competition

The High End category withinBeer industry in the United States is highly competitive due to large domestic and international brewers and the increasing number of craft brewers and craft distilleries in this category who distribute similar products that have similar pricing and target drinkers.

The two largest brewers in the United States, AB InBev and Molson Coors, participate actively in the High End category,and Beyond Beer categories, through numerous launches of newflavored malt beverages, hard seltzers, beers, and spirit RTDs from existing beer brands or new brands, importing and distributing import brands, and with their own domestic specialty beers, either by developing new brands or by acquiring, in whole or part, existing craft breweries.brands. In addition, AB InBev’s High End DivisionInBev and Molson Coors’ Tenth and Blake were formed asCoors have business units headquartered in the United States that are focused exclusively on competing in the High End category.and Beyond Beer categories. Imported beers, such as Corona^®Modelo Especial®, Heineken^®Corona®, Modelo Especial^®Heineken®, and Stella Artois^®Artois®, continue to compete aggressively in the United States and have gained market share over the last ten years. Heineken and Constellation Brands (owner of the United States Distribution rights to CoronaModelo Especial and Modelo Especial)Corona) and Heineken may have substantially greater financial resources, marketing strength and distribution networks than the Company.

More recently, beginning in 2021, large non-alcoholic beverage companies including The Coca-Cola Company (“Coke"), Pepsi, Monster Beverage Corporation (“Monster”), and Arizona Beverage Company (“Arizona") have begun to enter these markets directly or through licensing agreements with alcoholic beverage companies to develop alcohol versions of existing traditional non-alcohol brands. Coke has entered into agreements with Molson Coors to develop, market and sell Topo Chico brand Hard Seltzer, Simply Spiked Lemonade, and Peace Hard Tea. Coke also announced agreements with Constellation Brands to develop, market and sell FRESCA™ Mixed and with Brown Forman to develop, market and sell Jack Daniel's® Tennessee Whiskey and Coca-Cola®™ Ready-to-Drink Cocktail. As previously discussed, the Company has entered into an agreement with Pepsi to develop, market and sell Hard Mountain Dew, to take advantage of this trend. Pepsi also entered an agreement in late 2022 with FIFCO USA, a New York based brewery, to develop, market and sell Lipton Hard Iced Tea which launched during the first half of 2023. In addition, Monster acquired CaNarchy Craft Brewery Collective in early 2022 and launched the Beast Unleashed, a new brand of flavored malt beverages in early 2023 which includes Nasty Beast Hard Tea. Arizona, after earlier development and launch in 2020 in Canadian markets, launched Arizona Hard Tea in certain markets in the United States during 2023.

The Company’s Twisted Tea beverages compete generally within the FMB category of the beer industry. FMBs, such as Twisted Tea, Mike’s Hard Lemonade, Smirnoff Ice, Cayman Jack, Beast Unleashed, Bud Light Lime, Redd’s Apple Ale, Seagrams Escapes are typically priced competitively with High End beers. As Twisted Tea has grown, more hard teas have been introduced by competitors. Some of these hard tea competitors currently include Arizona Hard Tea, Arnold Palmer Spiked, Nasty Beast Hard Tea, VooDoo Ranger Hard Charged Tea, Hoop Hard Tea, 2Hoots Hard Tea and Peace Hard Tea. As noted earlier, the FMB category is highly competitive due to, among other factors, the presence of large brewers and spirits companies in the category, the advertising of malt-based spirits brands in channels not available to the parent brands and a fast pace of product innovation.

The Company’s Truly Hard Seltzer beverages compete primarily within the hard seltzer category.category of the beer industry. This category has been growinggrew quickly sincefrom 2016 to 2021 and then declined in 2022 and 2023. The hard seltzer category, is highly competitive and includes large international and domestic competitors. Hard seltzers are typically priced competitively with High End beers and may compete for drinkers with beer, wine, spirits, or FMBs. Some of these competitors include Mark Anthony Brands under the brand name “White Claw” "White Claw Surf" and "White Claw Surge."; ABInBev under “Bud Light Seltzer”, “Natural Lightand “Michelob Ultra Organic Seltzer”, and “Bon & Viv’s”; Diageo under “Smirnoff Spiked Sparkling Seltzer”; and MolsonCoorsMolson Coors under “Vizzy Hard Sparkling Water” and “Coors Seltzer”"Topo Chico".

The Company’s Truly brand, including Truly Hard Seltzer, Truly Vodka Soda, and Truly Tequila Soda also compete against a sub-category of Spirits RTDs that the Company expects numerous additional entrantsand the alcohol industry at large categorize as Spirit Seltzer and Soda. The Spirit Seltzer and Soda sub-category generally consists of lower calorie and lower alcohol Spirits RTDs that are similar in flavor and taste to the hard seltzer category during 2021 from both largebeverages but at a higher price. The leading brand in the Spirit Seltzer and smaller international and domestic competitors, as the category continues to develop distribution and drinker awareness. Most significantly, ABInbev introduced and launched nationally “Michelob Ultra Organic Seltzer” in January 2021 and Mark Anthony Brands has announced that “Mikes Hard Lemonade Seltzer” and “White Claw Hard Seltzer Iced Tea” will be introduced and launched nationally in Spring 2021.

The Company’s Twisted Tea beverages compete primarily within the FMB category of the beer industry.  FMBs, such as Twisted Tea, Mike’s Hard Lemonade®, Smirnoff Ice®, Bud Light Lime® Ritas, Redd’s® Apple Ale, Seagrams Escapes® and Arnold Palmer Spiked, are flavored malt beverages that are typically priced competitively with High End beers.  As noted earlier, thisSoda category is highly competitive due to, amongowned by E&J Gallo Winery under the brand name "High Noon” and other factors, the presence of large brewers and spirits companiescompetitors in the category the advertising of malt-based spirits brands in channels not available to the parent brandsinclude ABInBev under “Nutrl Vodka Seltzer”, Mark Anthony under "White Claw Vodka Soda" and a fast pace of product innovation."Rey Azul Tequila and Soda" and Molson Coors under "Topo Chico Spirited Can Cocktails".

The Company’s Samuel Adams and Dogfish Head beveragesbeers compete primarily within the craft beer and domestic specialty beer category of the beer industry. The Company expects competition and innovation among domestic craft brewers to remain strong, as the number of craft brewers continues to grow. The Company estimates there are over 8,00010,000 breweries in operation, up from approximately 1,500 operating breweries in 2009. Most of these new breweries are craft (small and independent) brewers. Also, some existing craft breweries are building more capacity, adding additional local tap rooms, expanding geographically and adding more SKUs and styles.

There

In recent years, there have been numerous announcements of acquisitions of or investments in craft brewers by larger breweries and private equity and other investors. In 2019, a unit of global brewer Kirin Holdings Co. announced the acquisition of New Belgium Brewing, the fourth largest craft brewer, for a reported amount of $350 to $400 million. Also in 2019, global brewer Mahou San Miguel increased its ownership of Founders Brewing Co. from 30% to 90% for a reported valuation of approximately $300 million. The most significant acquisitions in the last few years include Heineken’s acquisition of Lagunitas Brewing Company for approximately $1 billion and AB InBev’s and Molson Coors purchase of multiple smaller craft breweries including Elysian Brewing Company, Golden Road Brewing, Four Peaks Brewing Company, Breckenridge Brewing, Devils Backbone, Karbach, Wicked Weed, Platform Beer and Craft Brew Alliance, and Molson Coors’ purchase of multiple craft breweries, including Hop Valley Brewing, Saint Archer Brewery and Revolver Brewing..

The Company’s Angry Orchard product line competes within the hard cider category. As noted earlier, this category is small and highly competitive and includes large international and domesticthe competitors as well as manyinclude mostly small regional and local hard cider companies. Hard ciders are typically priced competitively with High End Beers and may compete for drinkers with beer, wine, spirits, or FMBs. Some of these competitors include C&C Group PLC"Bold Rock", "Ace" and "2 Towns".

The Company’s Dogfish Head Canned Cocktails compete in the spirits RTDs category. This category is small and highly competitive and includes large international and domestic competitors, as well as many small regional and local distilling companies. Spirits RTDs are typically priced above High End Beers and may compete for drinkers with beer, wine, spirits, or FMBs. As discussed above, spirits RTDs consist of the sub-category of Spirit Seltzer and Soda. Dogfish Head Canned Cocktails generally competes in the other sub-category of spirits RTDs named Spirits-based Canned Cocktails. Beverages in the Spirits-based Canned Cocktails sub-category generally have more flavor and higher alcohol than spirits RTDs in the sub-category of Spirit Seltzer and Soda. Some of these Spirits-based Canned Cocktails competitors include; ABInBev under the brand names ‘Woodchuck’, ‘Magners’name "Cutwater" and ‘Hornsby’s’; HeinekenDiageo under the brand names ‘Strongbow’; and AB InBev under ‘Stella Cidre’name "Crown Royal". In recent years, regional and local cideries, including ‘Bold Rock’ and ‘Austin East Ciders’, have built businesses that have gained share locally at the expense of the national brands.

The Company’s products also compete with other alcoholic beverages for drinker attention and consumption and the pace of innovation in the categories in which the Company competes is increasing. In recent years, wine and spirits have been competing more directly with beers. The Company monitors such activity and attempts to develop strategies which benefit from the drinker’s interest in trading up, in order to position its hard seltzers, beers and hard cidersbeverages competitively with wine and spirits.

The Company competes with other beer and alcoholic beverage companies within a three-tier distribution system. The Company competes for a share of the Distributor’s attention, time and selling efforts. InAt retail, establishments, the Company competes for traditional retail shelf, cold box and tap space.space, as well as e-commerce placement. From a drinker perspective, competition exists for brand acceptance and loyalty. The principal factors of competition in the market for High End beer and Beyond Beer occasions include product quality and taste, brand advertising and imagery, trade and drinker promotions, pricing, packaging and the development of innovative new products.

The Company distributes its products through independent Distributors who also distribute competitors’ products. Certain brewers have contracts with their Distributors that impose requirements on the Distributors that are intended to maximize the Distributors’ attention, time and selling efforts on that brewer’s products. These contracts generally result in increased competition among brewers as the contracts may affect the manner in which a Distributor allocates selling effort and investment to the brands included in its portfolio. The Company closely monitors these and other trends in its Distributor network and works to develop programs and tactics intended to best position its products in the market.

The Company has certain competitive advantages over the localother brewers and regional craft brewers,competitors, including a long history of awards for product quality, greater available resources and the ability to distribute and promote its products on a more cost-effective basis. Additionally, the Company believes it has competitive advantages over imported beers, including lower transportation costs, higher product quality, a lack of import charges and superior product freshness.

Regulation and Taxation

The alcoholic beverage industry is regulated by federal, state and local governments. These regulations govern the production, sale and distribution of alcoholic beverages, including permitting, licensing, marketing and advertising. To operate its production facilities, the Company must obtain and maintain numerous permits, licenses and approvals from various governmental agencies, including but not limited to, the Alcohol and Tobacco Tax and Trade Bureau (the “TTB”), the Food and Drug Administration, state alcohol regulatory agencies and state and federal environmental agencies.

Governmental entities may levy various taxes, license fees and other similar charges and may require bonds to ensure compliance with applicable laws and regulations. Beginning in 2018, as a result of the “Tax Cuts and Jobs Act”, the Company’s federal excise tax rate on hard seltzer and beer isdecreased from $18 to $16 per barrel on all barrels below 6 million barrels produced annually. The top tier rate on hard cider (with alcohol by volume of 8.5% or less) is $0.226 per gallon, on hard cider (with non-qualifying fermentable fruits) is $1.07 per gallon, and on artificially carbonated wine (hard cider with high CO2 levels) is $3.30 per gallon. Prior to 2018, the federal excise tax on beer and hard seltzer was $18 per barrel, on hard cider (with alcohol by volume of 8.5% or less) was $0.226 per gallon, on hard cider (with non-qualifying fermentable fruits) was $1.07 per gallon, and on artificially carbonated wine (hard cider with high CO2 levels) was $3.30distilled spirits is $13.50 per proof gallon. These lower rates for hard seltzer, beer and hard cider were made permanent at the end of 2020. States levy excise taxes at varying rates based on the type of beverage and alcohol content. Failure by the Company to comply with applicable federal, state or local laws and regulations could result in higher taxes, penalties, fees and suspension or revocation of permits, licenses or approvals. While there can be no assurance that any such regulatory action would not have a material adverse effect upon the Company or its operating results, the Company is not aware of any infraction affecting any of its licenses or permits that would materially impact its ability to continue its current operations.

Trademarks

Trademarks

The Company has obtained trademark registrations with the United States Patent and Trademark Office for over 400 trademarks, including Samuel Adams^®Adams®, Sam Adams^®, Samuel Adams Boston Lager^®, Samuel Adams Brewing the American Dream^®Adams®, Twisted Tea^®Tea®, Truly^®Truly®, Truly Hard Seltzer^®Seltzer®, Angry Orchard^®Orchard®, Dogfish Head^®Head®, Coney Island^®Island®, and Angel City Brewery® and Concrete Beach^®. It also has a number of common law trademarks. Several Company trademarks are also registered or have registrations pending in various foreign countries. The Company regards its trademarks as having substantial value and as being an important factor in the marketing of its products. The Company is not aware of any trademark infringements that could materially affect its current business or any prior claim to the trademarks that would prevent the Company from using such trademarks in its business. The Company’s policy is to pursue registration of its marks whenever appropriate and to oppose infringements of its marks through available enforcement options.

Environmental, Health, and Safety Regulations and Operating Considerations

The Company’s operations are subject to a variety of extensive and changing federal, state and local environmental and occupational health and safety laws, regulations and ordinances that govern activities or operations that may have adverse effects on human health or the environment. Environmental laws, regulations or ordinances may impose liability for the cost

of remediation of, and for certain damages resulting from, sites of past releases of hazardous materials. The Company believes that it currently conducts, and in the past has conducted, its activities and operations in substantial compliance with applicable environmental laws, and believes that any costs arising from existing environmental laws will not have a material adverse effect on the Company’s financial condition or results of operations.

As part of its efforts to be environmentally responsible, the Company has adopted a number of practices designed to improve recycling, waste reduction, and utilities consumption at its breweries.

The Company has adopted various policies and procedures intended to ensure that its facilities meet occupational health and safety requirements. The Company believes that it currently is in compliance with applicable requirements and will continue to endeavor to remain in compliance. There can be no assurances,In the future, however, that new and more restrictive requirements might notcould well be adopted, compliance with which might have a material, adverse financial effect on the Company and its operating results, orresults. There can be no assurances that such policies and procedures will be consistently followed and be sufficient to prevent serious accidents.

Among the Company’s key Environmental, Social, and Governance ("ESG") achievements in 2022 was the publication of its inaugural ESG Report entitled Setting the Course for the Future, which is available on the Company’s investor relations website at www.bostonbeer.com. While the Company is just starting its ESG journey, it has long believed in the importance of accurate and transparent reporting on the impact that the Company has on its people, the planet, and its communities. Going forward, the Company intends to share its progress regarding its ESG initiatives in its annual ESG Report, but the Company will continue to share select highlights in its 10-K and annual proxy statement.

Human Capital Resources

As of December 26, 2020,30, 2023, the Company had 2,423 employees,2,793 coworkers, of which 87169 were represented by unions or similar organizations. The Company’s Executive Leadership Team (“ELT”) is comprised of ourthe Company's CEO and seven of his six direct reports who collectively have management responsibility for ourthe Company's primary business areas, including but not limited to brewing, supply chain operations, sales, marketing, finance, legal, and people and culture. The Company’s Board of Directors and the ELT believe that succession planning, talent management, culture, and diversity, equity, and inclusion are critical to the Company’s continued success.

Succession Planning and Talent Management

The Company regularly reviews talent development and succession plans for each of its functional areas to identify and develop a pipeline of talent to maintain business operations. The Company understands the potential costs and risks of bringing in an outside executive officer in today’s environment, and that businesses are often – but not always – more successful in promoting internal candidates. Accordingly, the Board of Directors and the ELT make efforts to identify potential successors for those positions long in advance of any potential positional vacancies, perform skills gap analyses for those internal candidates, and provide training and exposure on those gap areas to those candidates in order to develop better potential successors. The Board of Directors is primarily responsible for succession planning for the CEO, but also participates in succession planning discussions for other executive officer positions. The Company believes that its culture, compensation structure, long-term equity program, and robust training and development program provide motivation for talented leaders to remain with the Company.

Culture

Culture

The ELT discusses culture with its employees and the Board of Directors on a regular basis. The Company is continuously focused on developing an inclusive and respectful work environment, where all employees at every level should feel empowered to honestly “discuss the undiscussables” with other employees at any level, all the way up to the Chairman and the CEO, without fear of retribution or retaliation. The Chairman teaches this philosophy during orientation to all new employees, and each company-wide meeting has time set aside to discuss the undiscussables. Additionally, each year the Board meets with a set of key senior managers, without the ELT present, so that the Board may seek direct feedback on the Company, its practices, culture, and employee benefits and programs.

The Company also fosters a culture of ongoing training and education. Some examples of trainings provided to employees include New EmployeeCo-Worker Orientation, Respectful and Effective Communications, Leading the Boston Beer Company Way, Selling Skills, Negotiations, and Building Brands. Over the past year, the Company has been particularly focused on delivering a Crucial Conversations class, designed to teach all employees refined skills for having “undiscussable” conversations. Employees also receive beer and cider education training during New EmployeeCo-Worker Orientation. Then, after having been with the Company for one year, employees are encouraged to participate in further beer and cider education courses where they can train to be certified as industry experts in those areas. The Company believes that it has the most beer industry experts, called “Certified Cicerones,” in the beer industry.

In October 2020, the Company rolled out a formal mentoring and leadership program to connect dozens of senior and junior employees across a range of backgrounds with the purpose of diversifying perspectives, building networks, developing capabilities, growing competencies, and cultivating leadership.

The Company also regularly conducts internal engagement surveys of its employee base to help ensure that it is maintaining its culture. In 2020,2023, over 72%83% of employees participated in the survey, which resulted in high scores in response to the

questions related to pride in working for the Company, believing inembodying the Company’s values, the Company’s concern for employee safety, confidence in the future of the Company,personal well-being, and pride in the Company’s handling of the COVID-19 pandemic.diversity, and creating a respectful work environment.

Diversity, Equity, and Inclusion

As anCore to the Company's "Our People" value is Diversity, Equity, and Inclusion (DE&I), which prioritizes building a diverse and fair-minded organization that recognizes and values differences. The Company committed to making Boston Beer a welcoming place to work for all employees, by fostering a culture where everyone feels heard, valued, and respected. These efforts reinforce a workplace that supports and uplifts coworkers to feel accepted, equal, opportunity employer,and involved, and to increase diverse representation across our organization. In 2023, the Company is committedset out to creatingaccomplish two objectives including hiring an inclusiveInclusion and diverse work environment that promotes equal opportunity, dignity,Belonging Program Manager dedicated to supporting the continued efforts in this space.

The following are a few accomplishments tied to these objectives:

To support DE&I efforts, the Company previously established a “Value 4 Council” (named for the Company's 4th value, ‘our differences make us stronger’). This council, comprised of leaders across all departments, continues to engage in leadership roles. The Company is focused on expanding the diverse perspectives of its employee base, which is critical to continued success. Over the past two years,efforts supporting inclusion. To date, the Company has taken numerous steps in furtherancehad two cohorts participate on the council and complete 15 hours of this goal:allyship training.

As of December 26, 2020, 2 ofTo promote an inclusive culture across the 9organization, the Company held six “Fearless Moments” discussion sessions. These sessions, featuring founders Jim Koch and Sam Calagione and facilitated by members of the BoardCompany's ELT and Value 4 Council, create a space for coworkers to reflect on the Company's values and their role in creating a community of Directorsbelonging.

To improve its ability to cultivate a more diverse workforce, the Company refreshed its employer brand, prominently updating its public-facing website, www.bostonbeer.com. In 2023, this led to a 9% increase in total job applicants. Within that overall growth, the Company saw an increase in diverse candidates in several demographics in 2023.

In 2022, the Company clearly established an ongoing commitment to pay transparency. Pay transparency is the commitment from Boston Beer to provide coworkers visibility into the BBC’s pay philosophy, how the Company administers pay, and finally the pay range for individual jobs. To deliver on pay ranges, over the course of 8 months the Company:

Following the successful roll-out of 9 self-identified as part of an underrepresented minority group; 3 of 11 Executive Officers were female and 1 of 11 self-identified as part of an underrepresented minority group. Acrosspay ranges for existing coworkers, in November 2023, the Company’s broader professional population, approximately 34.5% are female and 16.6% self-identified as part of an underrepresented minority group. In 2020, approximately 41.8% of new hires were female and 19.8% identified as an underrepresented minority group, both of which were improvements over 2019.Company began publicly disclosing salary ranges on job requisitions.

Corporate Social Responsibility

The Company’s core philanthropic initiative isSocial Impact Team works with external partners and internal stakeholders across the organization to bring Corporate Social Responsibility initiatives to life for our coworker communities and for its brands. In 2023, the Company invested nearly $3 million into cause-marketing, bringing the total dollars spent since 2016 to more than $23 million.

Boston Beer Benevolence Days are curated one day service projects during which coworkers work together to support non-profit partners in the communities they work and live in. In 2023, Boston Beer coworkers participated in 47 separate Benevolence Days totaling more than 1800 hours with 45 community partners. Some of the projects coworkers supported in 2023 included food & clothing pantry sorting/packing, home building, clearing invasive species from waterways, community beautification, and trail cleanup. In addition, the Social Impact Team hosted onsite Benevolence opportunities at our BeerFest meetings. In Boston, coworkers assembled hygiene kits for 2 New England veterans organizations and at the Delaware BeerFest gathering they penned Veterans Day cards for those staying at a local shelter.

The Samuel Adams Brewing the American Dream^®.Dream® program celebrated a milestone 15th year in 2023, surpassing more than $100 million in loans to support small business owners. In partnership with ACCION, one ofAccion Opportunity Fund, the nation’s largest non-profit micro-lenders,micro-lender, as well as other local non-profit partners, the programinitiative supports small business owners in the food, beverage, and

brewing industries through access to business capital, coaching, and new market opportunities. The goal is to help strengthen small businesses, create local jobs, and build vibrant communities. SinceBoston Beer coworkers provide one-on-one coaching for the inception ofentrepreneurs in subjects ranging from procurement, sales and marketing. At the Samuel Adams Boston Taproom we launched a series of Brewing theThe American Dream collaboration beers to bring visibility to small, local breweries.

In 2023, Dogfish Head’s Beer & Benevolence program in 2008, the Company and ACCION have worked together to loaninvested more than $64 million to more than 3,200 small business owners who have subsequently repaid these loans at a rate of more than 95%. The loan repayments received are reinvested$625,000 into the coastal Delaware community through organizations working to build community, amplify the arts and make positive environmental impact. Some of the 2023 Beer & Benevolence highlights included: 1,800 runners participating in the 2023 Dogfish Dash, raising $70,000 for the Delaware Center for the Inland Bays; our seafood restaurant Chesapeake & Maine contributing 135.5 bushels of shellfish shucks to the Don't Chuck Your Shucks program. Boston Beer employees, together with local business partners and community organizations, have provided coaching and mentoringThese shucks contributed to more than 12,000 business owners across the country. These efforts have helped to create or maintain more than 9,000 local jobs.2,700 oyster shell bags that help restore

shorelines and protect marsh edges; and providing support to the Developing Artist Collaboration which provides artists with career development, peer connection and physical spaces.

The Company kicked off a three-year partnership with the newly formed National Black Brewers Association ("NB2A") in 2023, pledging financial support for the organization. The company has coworkers serving on the Advisory Board and the Business Council for the NB2A, whose mission is dedicated to addressing under-representation of Black people in the brewing industry.

Through these actions and others, the BBC Social Impact Team is focused on empowering coworkers, brands and partners to impact the Company's communities through inclusive engagement to deepen connections and make a difference.

Other

The Company submitted the Section 12(a) CEO Certification to the New York Stock Exchange in accordance with the requirements of Section 303A of the NYSE Listed Company Manual. This Annual Report on Form 10-K contains at Exhibits 31.1 and 31.2 the certifications of the Chief Executive Officer and Chief Financial Officer, respectively, in accordance with the requirements of Section 302 of the Sarbanes-Oxley Act of 2002. The Company makes available free of charge copies of its Annual Report on Form 10-K, as well as other reports required to be filed by Section 13(a) or 15(d) of the Securities Exchange Act of 1934, on the Company’s investor relations website at www.bostonbeer.com, or upon written request to Investor Relations, The Boston Beer Company, Inc., One Design Center Place, Suite 850, Boston, Massachusetts 02210.

In addition to the other information in this Annual Report on Form 10-K, the risks described below should be carefully considered before deciding to invest in shares of the Company’s Class A Common Stock. These are risks and uncertainties that management believes are most likely to be material and therefore are most important for an investor to consider. The Company’s business operations and results may also be adversely affected by additional risks and uncertainties not presently known to it, or which it currently deems immaterial, or which are similar to those faced by other companies in its industry or business in general. If any of the following risks or uncertainties actually occurs, the Company’s business, financial condition, results of operations or cash flows would likely suffer. In that event, the market price of the Company’s Class A Common Stock could decline.

Risks Related to the COVID-19 Pandemic

The Global COVID-19 Pandemic Has Disrupted the Company’s Business and the Company’s Financial Condition and Operating Results Have Been and Are Expected To Continue to be Affected by the Outbreak and Its Effects.

The Company’s operations and business have been negatively affected and could continue to be materially and adversely affected by the COVID-19 pandemic and related weak, or weakening of, economic or other conditions, particularly in the United States where the Company derives most of its revenue and profit, but also in Europe, where some of the Company’s ingredient suppliers are located. National, state and local governments have responded to the COVID-19 pandemic in a variety of ways, including, without limitation, by declaring states of emergency, restricting people from gathering in groups or interacting within a certain physical distance (i.e., social distancing), and in certain cases, ordering businesses to close or limit operations or people to stay at home.  Although the Company has been permitted to continue to operate its breweries in all of the jurisdictions in which it operates, there is no assurance that the Company will be permitted to operate these facilities under every future government order or other restriction and in every location or that the third-party breweries on which the Company relies for production will similarly be permitted to continue to operate.  In particular, any limitations on, or closures of, the Company’s Pennsylvania, Cincinnati or Milton breweries or its third-party breweries, could have a material adverse impact on the Company’s ability to manufacture products and service customers and could have a material adverse impact on the Company’s business, financial condition and results of operations.

During the fifty-two weeks ended December 26, 2020, the principal impacts of the global COVID-19 pandemic were a significant reduction in keg demand from the on-premise channel and higher labor and safety related costs at Company-owned breweries.  The Company expects to continue to be impacted as the situation remains dynamic and subject to rapid and possibly material change.  Continued or additional disruptions to the Company’s business and potential associated impacts to the Company’s financial condition and results of operations include, but are not limited to:

These impacts could place limitations on the Company’s ability to operate effectively and could have a material and adverse effect on the Company’s operations, financial condition and operating results. The Company has implemented policies and procedures at its Company-owned breweries to address potential risks, including entrance screening and temperature checks, face mask requirements, reorganizing work to increase social distancing between and among shifts, and adding two hours of workspace cleaning per shift.  As the situation continues to evolve and more information and guidance becomes available, the Company may adjust its current policies and procedures, so as to address the rapidly changing variables related to the pandemic. Additional impacts may arise, of which the Company is not currently aware. The nature and extent of such impacts will depend on future developments, which are highly uncertain and cannot be predicted.

Risks Associated with Our Industry

The Company Faces Substantial Competition.faces substantial competition.

The market for High End beer occasionsand Beyond Beer categories within the United States isare highly competitive due to the introductionparticipation of large domestic and expansion of hard seltzer brands,international brewers in the categories and the increasing number of domesticregional and international beverage companies withlocal competitors, who distribute similar products that have similar pricing and target drinkers, gainsdrinkers.

The two largest brewers in market share achieved bythe United States, AB InBev and Molson Coors, participate actively in the High End and Beyond Beer categories, through numerous launches of new hard seltzers, flavored malt beverages and spirit RTDs from existing brands or new brands, importing and distributing import brands, and with their own domestic specialty beers, and imported beers, the acquisition of craft brewerseither by larger brewers. Some of the largest of these competitors include AB InBev, Molson Coors, Constellation, Heineken and Mark Anthony Brands as they introducedeveloping new hard seltzers and expand their efforts behindbrands or by acquiring, in whole or part, existing brands and acquire craft brewers.brands. Imported beers, such as Corona^®Modelo Especial®, Heineken^®Corona®, Modelo Especial^®Heineken®, and Stella Artois^®Artois®, also continue to compete aggressively in the United States beer market.and have gained market share over the last ten years. Constellation Brands (owner of the United States distribution rights to Modelo Especial and Corona) and Heineken may have substantially greater financial resources, marketing strength and distribution networks than the Company. The Company anticipates competition among domestic craft brewers will remain strong as some existing breweriesbeverage companies are building more capacity, expanding geographically and adding more SKUs and styles. The continuedpotential for growth in the sales of flavored malt beverages, hard seltzers, craft-brewed domestic beers, and imported beers and spirits RTDs is expected to increase the competition in the market for High End beer and Beyond Beer occasions within the United States and, as a result, pricesthe Company may well face competitive pricing pressures and the demand for and market share of the Company’s products may fluctuate and possibly decline.

The Company’s products compete generally with other alcoholic beverages. The Company competes with other beer and beverage companies not only for drinker acceptance and loyalty, but also for traditional retail shelf, cold box and tap space, in retail establishmentsas well as e-commerce placement and for marketing focus by the Company’s Distributors and their customers, all of which also distribute and sell other hard seltzers, beers and other alcoholic beverage products. Many of the Company’s competitors, including AB InBev, Molson Coors, Constellation, Heineken and Mark Anthony Brands, have substantially greater financial resources, marketing strength and distribution networks than the Company. Moreover, the introduction of new products by competitors

that compete directly with the Company’s products or that diminish the importance of the Company’s products to retailers or Distributors may have a material adverse effect on the Company’s business and financial results.

Further,

Beginning in 2021, large non-alcoholic beverage companies including Coca-Cola Company (“Coke"), Pepsi, Monster Beverage Corporation (“Monster”) and Arizona Beverage Company ("Arizona") have begun to enter these markets directly or through licensing agreements with alcoholic beverage companies to develop alcohol versions of existing traditional non-alcohol brands. Coke has entered into agreements with Molson Coors to develop, market and sell Topo Chico brand Hard Seltzer, Simply Spiked Lemonade and Peace Hard Tea. Coke also announced agreements with Constellation to develop, market and sell FRESCA™ Mixed, a line of spirits RTDs and with Brown Forman to develop, market and sell Jack Daniel’s® Tennessee Whiskey and Coca-Cola®™ Ready-to-Drink Cocktail. As previously discussed, the beer industryCompany has seen continued consolidation among brewers in orderentered into an agreement with Pepsi to develop, market and sell alcohol beverages which include Hard Mountain Dew, to take advantage of cost savings opportunities for supplies, distributionthis trend. In addition, Monster acquired CANarchy Craft Brewery Collective in early 2022 and operations. Illustrativelaunched the Beast Unleashed, a new brand of this consolidation is AB InBev’s $107 billion purchase of SAB Millerflavored malt beverages in early 2023 which includes Nasty Beast Hard Tea. Arizona, after earlier development and the related sale by SAB Miller to Molson Coors of its 58% share of the MillerCoors joint venture with Molson Coors, as well as Heineken’s acquisition of Lagunitas Brewing Company for approximately $1 billion. Also,launch in 2020 in Canadian markets, launched Arizona Hard Tea in certain markets in the last several years, both AB InBev and Molson Coors have introduced numerous new hard seltzers and purchased multiple regional craft breweries with the intention to expand the capacity and distribution of these breweries. United States during 2023.

Due to the increased leverage that these combined operations willlarger companies have in distribution and sales and marketing expenses, the costs to the Company of competing could increase. The potential also exists for these large competitors to increase their influence with their Distributors, making it difficult for smaller brewersbeverage companies to maintain their market presence or enter new markets. The continuingAlso, consolidation in the industry could also reduce the contract brewing capacity that is available to the Company. These potential increases in the number and availability of competing brands, the costs to compete, reductions in contract brewing capacity and decreases in distribution support and opportunities may have a material adverse effect on the Company’s business and financial results.

Changes in Public Attitudespublic attitudes and Drinker Tastes Could Harmdrinker tastes could harm the Company’s Business.business. Regulatory Changeschanges in Responseresponse to Public Attitudes Could Adversely Affectpublic attitudes could adversely affect the Company’s Business.business.

The alcoholic beverage industry has been the subject of considerable societal and political attention for several years, due to public concern over alcohol-related social problems, including driving under the influence, underage drinking and health consequences from the misuse of alcohol, including alcoholism. As an outgrowth of these concerns, the possibility exists that advertising by beer producers could be restricted, that additional cautionary labeling or packaging requirements might be imposed, that further restrictions on the sale of alcohol might be imposed or that there may be renewed efforts to impose increased excise or other taxes on beer sold in the United States.

The domestic beer industry, other than the market for High End beer occasions and Beyond Beer occasions, has experienced a decline in shipments over the last ten years. The Company believes that this decline is due to declining alcohol consumption per person in the population, drinkers trading up to drink high quality, more flavorful FMBs, hard seltzers, beers, and beers,spirts RTDs, health and wellness trends and increased competition from wine and spirits companies. If consumption of the Company’s products in general were to come into disfavor among domestic drinkers, or if the domestic beeralcohol beverage industry were subjected to significant additional societal pressure or governmental regulations, the Company’s business could be materially adversely affected.

Certain

Additionally, certain states are considering or have passed laws and regulations that allow the sale and distribution of marijuana. Currently it is not possible to predict the impact of this on sales of alcohol, but it is possible that legal marijuana usage could adversely impact the demand for the Company’s products.

The Company Is Dependentis dependent on Its Distributors.its distributors.

In the United States, where approximately 96%95% of its beer isbeverages are sold, the Company sells most of its alcohol beverages to independent beer Distributors for distribution to retailers and, ultimately, to drinkers. Although the Company currently has arrangements with over 400300 Distributors, sustained growth will require it to maintain such relationships and possibly enter into agreements with additional Distributors. Changes in control or ownership within the current distribution network could lead to less support of the Company’s products.

Contributing to distribution risk is the fact that the Company’s distribution agreements are generally terminable by the Distributor on relatively short notice. While these distribution agreements contain provisions giving the Company enforcement and termination rights, some state laws prohibit the Company from exercising these contractual rights. The Company’s ability to maintain its existing distribution arrangements may be adversely affected by the fact that many of its Distributors are reliant on one of the major beer producers for a large percentage of their revenue and, therefore, they may be influenced by such producers. If the Company’s existing distribution agreements are terminated, it may not be able to enter into new distribution agreements on substantially similar terms, which may result in an increase in the costs of distribution.

No assurance can be given that the Company will be able to maintain its current distribution network or secure additional Distributors on terms not less favorable to the Company than its current arrangements.

Risks Related to Ourthe Company's Business and Operations

There Is No Assurance of Continued Growthis no assurance that the Company will grow its business in the future or that the Company Can Adaptcan adapt to the Challengeschallenges of the Changing Competitive Environment.changing competitive environment.

From 2015 to 2017, the Company experienced a decline in the demand for its products, as craft beer growth rates slowed and the hard cider category declined. From 2018 to 2020,2021, the Company experienced increases in demand for its products, driven by growth in its Truly and Twisted Tea brands, and grew 13%, 22%, 37% and 37%22% in depletion volume for 2018, 2019, 2020 and 2020,2021, respectively. Beginning in the second half of 2021, the market for hard seltzer products experienced decelerating growth trends, which resulted in a depletion volume decline of 5% in 2022 and 6% in 2023 (5% decline on a 52-week comparable basis). The slowdown in growth trends greatly impacted the Company's volume of production and shipments, as well as its volume projections for the future. The volume reduction also resulted in increased supply chain related costs. These costs include the destruction of excess inventory, provisions for excess and obsolete inventories, property, plant and equipment impairments, write-offs of third-party production prepayments and provisions for costs associated with the termination of various third-party production contracts.

The Company is targeting shipmenta percentage change in shipments and depletion volume growth of between 35% and 45% in 2021.down single digits to up single digits. The Company’s ability to sustain double digit growth trendsmeet these targets may be affected by an increasing number of competing beverages. The development of new products by the Company to meet these challenges may lead to reduced sales of the Company’s existing brands and there is no guarantee that these new product initiatives will generate stable long term volume. Additionally, changes in the use of media and technology are changingimpacting the economics of how to market brands are marketed to drinkers and may be diminishing the traditional competitive advantage the Company may have had in buying national media relative to smaller brands. While the Company believes that a combination of innovation, new brand messaging and exploration of new media, and increased investment andin sales execution can lead to increased demand, there is no guarantee that the Company’s actions will be successful in maintaining the Company’s historical levels of profitability. Reduced sales, among other factors, could lead to lower brewery utilization, lower funds available to invest in brand support and reduced profitability, and these challenges may require a different mix and level of marketing investments to stabilize and grow volumes. A lower growth environment or periods of sales declines will present challenges for the Company to motivate and retain employees, and to maintain the current levels of distributor and retailer support of its brands, it’sand fund its current brand investment levels, and current returns to shareholders, and could potentially require a review of long term organization and brewery needs. Currently, the Company believes it can continuemeet its volume targets in 2024 and return to grow in 2021 andvolume growth in future years, but there is no guarantee itits efforts will be successful.successful or profitable.

The Company May Not Be AbleCompany’s inability to Increase Supplyreact to Meetchanges in demand could have a material adverse effect on the Increased Demand for Its Products.Company’s operations or financial results.

SinceDespite the depletion volume declines in 2023 of 6% (5% decline on a 52-week comparable basis), since 2017 demand for the Company’s products has grown significantly and the Company currently estimates depletion growth in 2021 to be between 35% and 45%. These estimated increases would result in 2021its 2023 depletion volume atwas over 2.5two times 2017 volumes. During 2021, the market for hard seltzer products experienced decelerating growth trends which resulted in the annual volume growth rate declining from an increase of 158% in 2020 to 13% in 2021 and then a decrease of 15% in 2022 and 21% in 2023.

The changes in growth trends in the Company’s business, particularly for the Truly Hard Seltzer Brand, as well as added product complexity, heighten the management challenges that the Company faces. In recent years, the Company has had periods of excess capacity that were nevertheless accompanied by product shortages and service issues. As demand for its products has grown,grew from 2017 through the first half of 2021, the Company has faced increasing challenges in meeting that demand. The challenges have beenwere both production constraints, primarily resulting from canning and variety pack capacity limitations, and can supply constraints. During this period, the Company experienced increased inventory obsolescence, operational, and freight costs, as it reacted. In response to these issues, the Company significantly increased its packaging capabilities and tank capacity and added personnel to address these challenges.

With a decline in volume over the second half of 2021 through 2023, the Company then incurred additional supply chain related costs associated with downsizing its production model to adjust to reduced demand. In recent periods, the Company has been able to better match its supply chain to meet demand, but a sudden increase could result in a recurrence of challenges in meeting demand and a sudden decrease could result in other incremental costs. There can be no assurance that the Company will effectively address changing consumer demand or manage increasing product complexity, without experiencing similar issues in the future. Planning failures, operating inefficiencies, insufficient employee training, control

deficiencies, or other similar issues could well have a material adverse effect on the Company’s business and financial results. Growth or decline in the Company’s revenues, changes in operating procedures, and increased complexity have required significant capital investment. The Company on an overall basis has also become moreyet to see any operating cost leverage from these investments and there is no guarantee that it will.

The Company remains reliant on third party-owned breweries, particularly City Brewing Company, LLC, to meet demand asand the percentage of its volume produced at Company owned breweries has decreased from over 90% in 2017 to approximately 65%71% in 2020, with a further decrease anticipated2023. The Company currently expects that the percentage of total production at Company owned breweries in 2021.2024 will be over 75%. The Company’sCompany expects its reliance on production at City Brewing Company, LLC to meet demand has growndecline from 23%approximately 22% of the Company’s total production volume in 20192023 to 33%approximately 20% of production in 2020. 2024.

The Company’s ability to grow and continue to meet potentially increasing consumer demand will be affected byby:

The Company’s Advertisingadvertising and Promotional Investments May Affectpromotional investments may affect the Company’s Financial Resultsfinancial results but Not Be Effective.not be effective.

The Company has made and expects to continue to make, significant advertising and promotional expenditures to enhance its existing brands and promote new brands. These expenditures may adversely affect the Company’s results of operations in a particular quarter or even for the full year, and may not result in increased sales. Variations in the levels of advertising and promotional expenditures have in the past caused, and are expected in the future to continue to cause, variability in the Company’s quarterly results of

operations. While the Company attempts to invest only in effective advertising and promotional activities, it is difficult to correlate such investments with sales results, and there is no guarantee that the Company’s expenditures will be effective in building brand equity or growing long term sales.

The Company is Dependentdependent on Key Packaging Supplierskey packaging suppliers and an Increaseincrease in Packaging Costs Could Harmpackaging costs could harm the Company’s Financial Resultsfinancial results.

The demand for packaging materials in the beverage industry has significantly increased and during 2020 and 2021 there has beenwas a shortage of capacity, as manufacturers attempt to adjustadjusted their supply chains to keep up with the increased demand, which has further increased due tocaused by the COVID-19 pandemic. Truly Hard Seltzer brand beverages are primarily packaged in sleek cans and Twisted Tea brand beverages are primarily packaged in standard cans. In 2020 and 2021, as the Truly brand family and the Twisted brand families have growngrew significantly and overall demand for cans increased, the Company has experienced supply constraints for cans. In the fourth quarter of 2020, the Company experienced some can, cardboard wrap and glass shortages thatThese supply constraints impacted the Company’s production schedules.  The Company is working closely with its suppliersschedules and increased can cost by having to ensure there are no further supply disruptionsuse a more expensive supplier. These pressures were reduced during 2022 and 2023 and the Company has adequatecurrently believes it will have a sufficient supply of packaging materials.  In addition, the Company is working to increase packaging capacity to accommodate its expected needsmaterials for 2021 and currently expects to have sufficient supply and capacity to meet those needs.2024.

The Company maintains competitive sources for the supply of packaging materials, such as cans, glass, cardboard wraps and shipping cases. The Company enters into limited-term supply agreements with certain vendors in order to receive preferential pricing. In 2020,2023, certain flavorings, crowns, and labels were each supplied by single sources. Although the Company believes that alternative suppliers are available, the loss of any of the Company’s packaging materials suppliers could, in the short-term, adversely affect the Company’s results of operations, cash flows and financial position until alternative supply arrangements were secured. Additionally, there has been acquisition, change in control and consolidation activity in several of the packaging supplier networks which could potentially lead to further disruption in supply and changes in economics. If packaging costs continue to increase, there is no guarantee that such costs can be fully passed along through increased prices.

The Company has entered into long-term supply agreements for certain packaging materials that have shielded it from some cost increases. These contracts have varying lengths and terms and there is no guarantee that the economics of these contracts can be replicated when renewed. The Company’s inability to preserve the current economics on renewal could expose the Company to significant cost increases in future years. Some of these contracts require the Company to make commitments on minimum volume of purchases based on Company forecasts. If the Company's needs differdecline significantly from its forecasts, the Company would likely incur storage costs for excess production or contractual penalties that might be significant to Companyand could have a material adverse impact on the Company's financial results.

ImpactThe Company is dependent on key ingredient suppliers, including foreign sources; its dependence on foreign sources creates foreign currency exposure for the Company; the Company’s use of Reliancenatural ingredients creates weather and crop reliability and excess/shortage inventory exposure for the Company.

The Company purchases a substantial portion of the ingredients used in its beverages, including its flavorings, fruit juice, malt, hops, apples, and other ingredients, from a limited number of domestic and foreign suppliers. The Company has historically not experienced material difficulties in obtaining timely delivery from its ingredient suppliers and currently believes that it will have sufficient supply of ingredients in 2024. The Company believes that there are alternative sources available for some of the ingredients, but there can be no assurance that the Company would be able to acquire such ingredients from substitute sources on Company-Owned Production Facilities, Reduced Availability of Breweries Owned by Others, and Inability to Leverage Investmenta timely or cost-effective basis, if current suppliers could not adequately fulfill orders. The loss or significant reduction in the Company-Owned Breweries Could Havecapability of a Material Adverse Effectsupplier to support the Company’s requirements could, in the short-term, adversely affect the Company’s business and financial results, until alternative supply arrangements were secured.

The Company’s beverages include many unique and proprietary flavors and combinations of flavors and some of these flavorings are single sourced. Truly Hard Seltzer and Twisted Tea brand beverages are particularly reliant on the use of flavorings and variety of flavors as part of their appeal to drinkers.

The Company purchased most of the malt used in the production of its beer from four suppliers during 2023. Nevertheless, the Company believes that there are other malt vendors available that are capable of supplying part of its needs. 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.

The Company uses Noble hop varieties from Europe for many of its Samuel Adams beers and also uses hops grown in other areas of Europe, the United States, and New Zealand. Noble hops are grown in several specific areas in Germany and the Czech Republic that are recognized for growing hops with superior taste and aroma properties. The Company stores its hops in multiple cold storage warehouses to minimize the impact of a catastrophe at a single site. The performance and availability of the hops, as with any agricultural product, may be materially adversely affected by factors such as adverse weather or pests and there is no guarantee the contracts will be fulfilled completely. The Company has purchase commitments with seven primary hop dealers and attempts to maintain a one to two-year supply of essential hop varieties on-hand in order to limit the risk of an unexpected reduction in supply and procures hops needed for new beers, based on its best estimate of likely short-term demand. The failure of management’s assumptions regarding future sales growth, product mix and hops market conditions to prove accurate could result in future material losses.

The Company uses special varieties of apples in its ciders that it believes are important for the ciders’ flavor profile. These apples are sourced primarily from European and United States suppliers and include bittersweet apples from France and culinary apples from Italy and Washington state. There is limited availability of these apples and many outside factors, including weather conditions, farmers rotating from apples to other crops, government regulations and legislation affecting agriculture, could affect both price and supply.

The 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.

The Company’s contracts for certain hops and apples are payable in Euros, Pounds Sterling and New Zealand dollars, and therefore, the Company is subject to the risk that the Euro, Pound or New Zealand dollar may fluctuate adversely against the U.S. dollar. The Company has, as a practice, not hedged this exposure, although this practice is regularly reviewed. The cost of hops has increased in recent years due to the rising market price of hops and exchange rate changes. The continuation of these trends will impact the Company’s product cost and potentially the Company’s ability to meet the demand for its beers. The Company buys some other ingredients and capital equipment from foreign suppliers for which the Company also carries

exposure to foreign exchange rate changes. Significant adverse fluctuations in foreign currency exchange rates may have a material adverse effect on the Company’s Operationsbusiness and financial results.

The Company’s reliance on breweries 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.financial results.

During 2020,2023, the Company brewed, fermented and packagedproduced approximately 65%71% of its volume at breweries owned by the Company.  ThisCompany and, as noted above, anticipates producing 75% of its volume at breweries owned by the Company in 2024. While, on balance, the Company views greater reliance on its own breweries favorably, this reliance on its own breweries exposes the Company to capacity constraints and risk of disruption of supply, as these breweries are operating at or close to current capacity in peak months. Management believes that it has alternatives available to it, in the event that production at any of its brewing locations is temporarily interrupted, although as volumes at the Pennsylvania Brewery increase, severe interruptions there would be problematic, particularly during peak seasons. In addition, if interruptions were to occur, the Company might not be able to maintain its current economics and could face significant delays in starting replacement brewing locations. Potential interruptions at breweries include labor issues, governmental action, quality issues, contractual disputes, machinery failures, operational shutdowns, pandemic-related or other staffing shortages, or natural or unavoidable catastrophes.

The growth in the Company’s business and product complexity heighten the management challenges thatIf interruptions were to occur, the Company faces. In recent years, the Company has had product shortagescould face significant delays in starting replacement brewing locations and service issues.  The Company’s supply chain struggled under the increased volume and experienced increased operational and freight, costs as it reacted.  In response to these issues, the Company has significantly increased its packaging capabilities and tank capacity and added personnel to address these challenges.  There canoperating results could be no assurance that the Company will effectively manage such increasing complexity without experiencing future planning failures, operating inefficiencies, insufficient employee training, control deficiencies or other issues that could have a material adverse effect on the Company’s business and financial results. The growth of the Company, changes in operating procedures and increased complexity have required significant capital investment. In the future, the Company on an overall basis may not see operating cost leverage from these investments and there is no guarantee that it will.materially adversely affected.

The Company continues to avail itself of capacity at third-party breweries. During 2020,production facilities. Also as noted above, during 2023, approximately 33%22% of the Company’s annual shipment volume was brewed and/or packaged under service agreements with City Brewing Company, LLC. In selecting third party breweries for brewing services arrangements, the Company carefully weighs a brewery’s sleek can packaging and automated variety packaging capability and capacity, its quality control capabilities throughout the production process and its ability to utilize traditional brewing, fermenting and finishing methods. To the extent that the Company needs to avail itself of a third-party brewingproduction services arrangement, it exposes itself to higher than planned costs of operating under such contract arrangements than would apply at the Company-owned breweries, potential lower service levels and reliability than internal production, and potential unexpected declines in the brewing capacity available to it, any of which could have a material adverse effect on the Company’s business and financial results. The use of such third party facilities also creates higher logistical costs and uncertainty in the ability to deliver product to the Company’s customers efficiently and on time.

As the beer industry continues to consolidate and the Company has grown, the capacity and willingness of breweries owned by others where the Company could brew, ferment or package some of its products, if necessary, has become a more significant concern and, thus, there is no guarantee that the Company’s needs will be uniformly met. The Company continues to work at its Company-owned breweries and with its third-party brewersproduction partners to attempt to minimize any potential disruptions. Nevertheless, should an interruption occur, the Company could experience temporary shortfalls in production and/or increased production and/or distribution costs and be required to make significant capital investments to secure alternative capacity for certain brands and packages, the combination of which could have a material adverse effect on the Company’s business and financial results. A production interruption caused by an acquisition or change of control of City Brewing or a simultaneous interruption at several of the Company’s other production locations would likely cause significant disruption, increased costs and, potentially, lost sales.

The Company’s emphasis on owning production facilities requires it to continue to make a significant level of capital expenditure to maintain and improve these facilities and to incur significant fixed operating costs to support them. In an uncertain volume environment, the Company faces the risk of not being able to support the owned brewery operating costs, if volumes were to decline. At the same time, despite making these expenditures and incurring these costs, if demand were to further increase above current volume estimates, the Company could still face the risk of not being able to meet the increased demand.

The Company attempts to mitigate production and distribution risks through a combination of owned breweries and access to third-party contract facilities, but there is no guarantee that this strategy is optimal,will be successful, and it might result in short term costs and inefficiencies.inefficiencies which could adversely impact our business and financial results.

Turnover in Company Leadershipleadership or Other Key Positions May Leadother key positions may lead to Lossloss of Key Knowledgekey knowledge or Capabilitycapability and Adversely Impactadversely impact Company Performance.performance.

The Company has an experienced leadership team with an established track record of business success and innovation in the beverage and consumer goods industries.  Dave Burwick joined as President and Chief Executive Officer in 2018.  Prior to commencing that role, Mr. Burwick had served on Boston Beer’s Board of Directors since 2005.  His most recent role was Chief Executive Officer of Peet’s Coffee and prior to joining Peet’s, Mr. Burwick served as President of North America for Weight Watchers and in numerous leadership roles over 20 years at PepsiCo, including Chief Marketing Officer of Pepsi-Cola North America.  

The Company may wellhas and is likely to experience changes in key leadership or key positions in the future.regularly. The departure of key leadership personnel especially a Chief Executive Officer, can take from the Company significant knowledge and experience. This loss of knowledge and

experience can be mitigated through successful succession planning or external hiring and transition, but there can be no assurance that the Company will be successful in such efforts. Attracting, retaining, integrating and developing high performance individuals in key roles is a core component of the Company’s strategy for addressing its business opportunities. Attracting and retaining qualified senior leadership may be more challenging under adverse business conditions, such as the current declining growth environment that faced the Company in prior years.is facing. Failure to attract and retain the right talent, or to manage the transition of responsibilities resulting from such turnover smoothly, would affect the Company's ability to meet its challenges and may cause the Company to miss performance objectives or financial targets.

The Company has Significantly Increasedsignificantly increased its Product Offeringsproduct offerings and Distribution Footprint,distribution footprint, which Increases Complexityincreases complexity and Could Adversely Affectcould adversely affect the Company’s Performanceperformance and Financial Results.financial results.

The Company has significantly increased the number of commercially available flavored malt beverages, hard seltzers, beers, and hard ciders, and spirits RTDs that it produces. In the last five years, the Company has developed, introduced and reformulated many new hard seltzers, beers, and hard cidersexisting beverage styles under the Twisted Tea, Truly Hard Seltzer, Twisted Tea, Samuel Adams and Angry Orchard brands. InThe Dogfish Head brand, acquired in July 2019, the addition of the Dogfish Head brand

addedcurrently has over 25 styles of beer, 15 styles of distilled spirits, 7 spirits RTDs, two brewery tap rooms, a restaurant, and a boutique Inn.  inn. In January 2020, the Company opened the Samuel Adams Tap Room and small brewery in downtown Boston. The Company currently operates 108 retail locations, including eightseven brewery tap rooms, a cidery tasting room and a restaurant, where its beers, hard seltzers, hard ciders and distilled spiritsbeverages are sold and consumed on-premise. The Company’s most significant innovations in 2023 were the launches of new styles of its Truly Vodka Soda brand and its launch in limited markets of Truly Tequila Soda and Slingers, a new flavored malt beverage brand. In the first quarter of 2024, the Company is planning to launch Truly Tequila Soda nationally and expand Slingers to more markets. Also, during 2024, the Company has plans to add new beverage styles and reformulate existing styles of beverages. During the first quarter of 2024, the Company is launching two new brands in limited markets. These two new brands are Sun Cruiser, a new vodka based hard tea brand and General Admission, a new non-alcoholic beer brand.

These additional brands, styles, reformulations and locations, along with the increases in demand for certain existing brands, have added to the complexity of the Company’s product development process, as well as its brewing, fermenting, distilling, packaging, marketing and selling processes, and retail operations. There can be no assurance that the Company will effectively manage such increased complexity, without experiencing coordination issues, operating inefficiencies, supply shortages or control deficiencies. Such inefficiencies or deficiencies could have a material adverse effect on the Company’s business and financial results.

The Company’s Acquisition of Dogfish Head Involves a Number of Risks, the Occurrence of Which Could Adversely Affect Its Business, Financial Condition, and Operating Results.

On July 3, 2019, the Company completed its acquisition of Dogfish Head Brewery and various related operations, through the acquisition of all of the equity interests held by certain private entities in Off-Centered Way LLC, the parent holding company of the Dogfish Head Brewery operations. This transaction continues to involve certain risks, the occurrence of which could materially and adversely affect the Company’s business, liquidity, financial condition, and operating results, including:

The Company cannot assure that it will realize the expected benefits of the Dogfish Head transaction. The Company’s failure to adequately manage the risks associated with the transaction could have a material adverse effect on its business, liquidity, financial condition or results of operations.

Changes in Drinker Attitudesdrinker attitudes on Brand Equitybrand equity and Reliancereliance on the Company’s Foundersfounders in the Samuel Adams and Dogfish Head Brand Communications May Adversely Affect Demandbrand communications may adversely affect demand for the Company’s Productionproduction and Resultsresults of Operations.operations.

The success of ourthe Company's brands depends upon the positive image that drinkers have of those brands and maintaining a good reputation is critical to selling our branded products. Our reputation could be impacted negatively by public perception, adverse publicity, negative comments in social media, or our responses to negative publicity or comments.comments, either by members of the Company or those who may be affiliated with it. There is also no guarantee that the brand equities that the Company has built in its brands will continue to appeal to drinkers. Changes in drinker attitudes or demands, or competitor activity and promotion, could adversely affect the strength of the Company’s brands and the revenue that is generated from that strength. It is possible that the Company could react to such changes and reposition its brands, but there is no certainty that the Company would be able to maintain volumes, pricing power and profitability. It is also possible that marketing messages or other actions taken by the Company could damage its brand equities, as opposed to building them. If such damage were to occur, it would likely have a negative effect on the financial condition of the Company.

In addition to these inherent brand risks, C. James Koch, the founder and Chairman of the Company, as well as the founders of Dogfish Head brand, Samuel Calagione, Founder and Brewer, Dogfish Head Brewery and Mariah Calagione, Founder and Communitarian, Dogfish Head Brewery, are an integral part of the Company’s history, brand equity and current and potential future brand messaging and the Company relies on the positive public perception of these founders. The role of these founders as founders, brewers and leaders of the Company is emphasized as part of the Company’s brand communication and has appeal to some drinkers. If these founders were not available to the Company to continue their active roles, their absence could

negatively affect the strength of the Company’s messaging and, accordingly, the Company’s growth prospects. The Company and its brands may also be impacted if drinkers’ perceptions of these founders, including their social or political views, were to change negatively. If any negative changes were to occur, the Company might need to adapt its strategy for communicating its key messages regarding its history, equity, and current and potential future brand messaging. Any such change in the Company’s messaging strategy might have a detrimental impact on the future growth of the Company.

The Company’s Use of Natural Ingredients Creates Weather and Crop Reliability and Excess/Shortage Inventory Exposure for the Company.

The Company purchases a substantial portion of the ingredients used in its hard seltzers, beers and hard ciders, including its flavorings, malt, hops, apples and other ingredients, from a limited number of foreign and domestic suppliers. The Company has historically not experienced material difficulties in obtaining timely delivery from its ingredient suppliers and currently believesoperations are subject to certain operating hazards that it will have sufficient supply of ingredients in 2021.  The Company believes that there are alternative sources available for some of the ingredients, but there can be no assurance that the Company would be able to acquire such ingredients from substitute sources on a timely or cost-effective basis, in the event that current suppliers could not adequately fulfill orders. The loss or significant reduction in the capability of a supplier to support the Company’s requirements could, in the short-term, adversely affect the Company’s business and financial results, until alternative supply arrangements were secured.

The Companies hard seltzers, beers and hard ciders include many unique and proprietary flavors and combinations of flavors and some of these flavorings are single sourced.  Truly Hard Seltzer and Twisted Tea brand beverages are particularly reliant on the use of flavorings and variety of flavors as part of their appeal to drinkers.  

The Company purchased most of the malt used in the production of its beer from four suppliers during 2020. Nevertheless, the Company believes that there are other malt vendors available that are capable of supplying part of its needs. 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.

The Company uses Noble hop varieties from Europe for many of its Samuel Adams beers and also uses hops grown in the other areas of Europe, and in the United States, England and New Zealand. Noble hops are grown in several specific areas in Germany and the Czech Republic and are recognized for growing hops with superior taste and aroma properties. The Company stores its hops in multiple cold storage warehouses to minimize the impact of a catastrophe at a single site. The performance and availability of the hops, as with any agricultural product, may be materially adversely affected by factors such as adverse weather or pests and there is no guarantee the contracts will be fulfilled completely. The Company enters into purchase commitments with nine primary hop dealers and attempts to maintain a one to two-year supply of essential hop varieties on-hand in order to limit the risk of an unexpected reduction in supply and procures hops needed for new beers, based on its best estimate of likely short-term demand.  Variations in management’s assumptions regarding future sales growth, product mix and hops market conditions could result in future material losses.

The Company uses special varieties of apples in its cidersunexpected costs or product recalls that it believes are important for the ciders’ flavor profile. These apples are sourced primarily from European and United States suppliers and include bittersweet apples from France and culinary apples from Italy and Washington state. There is limited availability of these apples and many outside factors, including weather conditions, farmers rotating from apples to other crops, government regulations and legislation affecting agriculture, could affect both price and supply.

The Company’s new product development can also be constrained by any limited availability of certain 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.

The Company’s contracts for certain hops and apples are payable in Euros, Pounds Sterling and New Zealand dollars, and therefore, the Company is subject to the risk that the Euro, Pound or New Zealand dollar may fluctuate adversely against the U.S. dollar. The Company has, as a practice, not hedged this exposure, although this practice is regularly reviewed. Significant adverse fluctuations in foreign currency exchange rates may have a material adverse effect onharm the Company’s business and financial results. The cost of hops has increased in recent years due to the rising market price of hops and exchange rate changes. The continuation of these trends will impact the Company’s product cost and potentially the Company’s ability to meet the demand for its beers. The Company buys some other ingredients and capital equipment from foreign suppliers for which the Company also carries exposure to foreign exchange rate changes.

The Company’s Operations are Subject to Certain Operating Hazards Which Could Result in Unexpected Costs or Product Recalls That Could Harm the Company’s Business.business.

The Company’s operations are subject to certain hazards and liability risks faced by all brewers,beverage companies, such as potential contamination of ingredients or products by bacteria or other external agents that may be wrongfully or accidentally introduced into products or packaging, or defective packaging and handling. Such occurrences may create bad tasting hard seltzer, beer or hard ciders,beverages, or pose health risk to the consumer or risk to the integrity and safety of the packaging. These could result in unexpected costs to the Company and, in the case of a costly product recall, potentially serious damage to the Company’s reputation for product quality, as well as product liability claims.

The Company Relies Upon Complex Information Systemsrelies upon complex information systems and Vulnerabilitiesvulnerabilities or Disruptionsdisruptions of These Systems Could Expose Usthese systems could expose us to Liabilityliability and Harm Our Businessharm our business and Operations.operations.

The Company depends on information technology to be able to operate efficiently and interface with customers and suppliers, as well as maintain financial and accounting reporting accuracy to ensure compliance with all applicable laws. If the Company does not allocate and effectively manage the resources necessary to build and sustain the proper technology infrastructure, the Company could be subject to transaction errors, processing inefficiencies, the loss of customers, business disruptions, or the loss of or damage to intellectual property through security breach.breaches. The Company recognizes that many groups on a world-wide basis have experienced increases in security breaches, cyber-attacks, and other hacking activities such as denial of service, malware and ransomware. The Company has dedicated internal and external resources to review and address such threats. However, as with all large information technology systems, the Company’s systems could be penetrated by outside parties intent on extracting confidential or proprietary information, corrupting information, disrupting business processes, or engaging in the unauthorized use of strategic information. Such unauthorized access could disrupt business operations and could result in the loss of assets or revenues, remediation costs or damage to the Company’s reputation, as well as litigation against the Company by third parties adversely affected by the unauthorized access. Such events could have a material adverse effect on the Company’s business and financial results. The Company also relies on third parties for supply of software, software and data hosting and telecommunications and networking, and is reliant on those third parties for the quality and integrity of these complex services. Failure by a third partythird-party supplier could have material adverse effects on the Company’s ability to operate.

An Increaseincrease in Energy Costs Could Harmenergy costs could harm the Company’s Financial Results.financial results.

In the last five years, the Company has experienced significant variation in direct and indirect energy costs, and energy costs could change unpredictably. Increased energy costs would result in higher transportation, freight and other operating costs, including increases in the cost of ingredients and supplies. The Company’s future operating expenses and margins could be dependent on its ability to manage the impact of such cost increases. If energy costs increase, there is no guarantee that such costs can be fully passed along through increased prices.

The Class B Shareholder Has Significant Controlshareholder has significant control over the CompanyCompany.

The Company’s Class A Common Stock is not entitled to any voting rights except for the right as a class to (1) approve certain mergers, charter amendments and by-law amendments and (2) elect a minority of the directors of the Company. Although not as a matter of right, the Class A stockholders have also been afforded the opportunity to vote on an advisory basis on executive compensation. Consequently, the election of a majority of the Company’s directors and all other matters requiring stockholder approval are currently decided by C. James Koch, who is the founder and Chairman of the Company, as the holder of 100% of the voting rights to the outstanding shares of the Company’s Class B Common Stock. As a result, Mr. Koch is able to exercise substantial influence over all matters requiring stockholder approval, including the composition of the board of directors, approval of equity-based and other executive compensation and other significant corporate and governance matters, such as approval of the Company’s independent registered public accounting firm. This could have the effect of delaying or preventing a change in control of the Company and makes most material transactions difficult or impossible to accomplish without the support of Mr. Koch. While Mr. Koch is currently the 100% holder of the Company’s Class B Common Stock, there is nothing that prevents Mr. Koch or his heirs from transferring some or all shares of the Class B Common Stock to others.

The Company’s acquisition of Dogfish Head included intangible assets that are marked to fair value on an annual basis, which have resulted and could in the future further result in impairment charges that have an adverse impact on the Company’s operating results.

On July 3, 2019, the Company completed its acquisition of Dogfish Head Brewery and various related operations, through the acquisition of all of the equity interests held by certain private entities in Off-Centered Way LLC, the parent holding company of the Dogfish Head Brewery operations. During 2022 and 2023, the Company recorded $27.1 million and $15.8 million, respectively, in non-cash impairment charges for the Dogfish Head brand, as a result of the Company’s annual impairment analysis. The impairment determination was primarily based on the latest forecasts of brand performance which have been below the Company’s projections made on the acquisition date. As of December 30, 2023, the Dogfish Head brand intangible asset was valued at $55.6 million on the Company’s statement of financial position. The Company cannot assure that there will not be further non-cash impairment charges recognized on the Company’s Dogfish Head brand intangible assets that would have a material adverse effect on the Company’s results of operations.

Risks Related to Law and Regulations

Changes in Tax, Environmentaltax, environmental and Other Regulations, Government Shutdownsother regulations, government shutdowns or Failurefailure to Complycomply with Existing Licensing, Tradeexisting licensing, trade or Other Regulations Could Haveother regulations could have a Material Adverse Effectmaterial adverse effect on the Company’s Financial Condition.financial condition.

The Company’s business is highly regulated by federal, state and local laws and regulations regarding such matters as licensing requirements, trade and pricing practices, labeling, advertising, promotion and marketing practices, relationships with Distributors, environmental impact of operations and other matters. These laws and regulations are subject to frequent reevaluation, varying interpretations and political debate, and inquiries from governmental regulators charged with their enforcement. In addition, any delays in federal or state government required approvals caused by federal or state government shutdowns, similar to the January 2019 federal government shutdown, could prevent new brands or innovations from getting to market on time or at all. Failure to comply with existing laws and regulations to which the Company’s operations are subject or any revisions to such laws and regulations or the failure to pay taxes or other fees imposed on the Company’s operations and results could result in the loss, revocation or suspension of the Company’s licenses, permits or approvals, and could have a material adverse effect on the Company’s business, financial condition and results of operations. Changes in federal and other tax rates could have a significant effect on the Company’s financial results.

There Is No Guaranteeis no guarantee that the Company Will Not Face Litigationwill not face litigation that Could Harmcould harm the Company’s Business.business.

While the Company has from time to time in the past been involved in material litigation, it is not currently a party to any pending or threatened litigation, the outcome of which would be expected to have a material adverse effect on itsthe Company’s financial condition or the results of its operations. In general, while the Company believes it conducts its business appropriately in accordance with laws, regulations and industry guidelines, claims, whether or not meritorious, could be asserted against the Company that might adversely impact the Company’s results. See Item 3 - Legal Proceedings below below..

Risks Related to General Economic Conditions

The Company’s Operating Resultsoperating results and Cash Flow May Be Adversely Affectedcash flow may be adversely affected by Unfavorable Economic, Financialunfavorable economic, financial and Societal Market Conditions.societal market conditions.

Volatility, uncertainty, and uncertaintyinflation in the financial markets and economic conditions generally may directly or indirectly affect the Company’s performance and operating results in a variety of ways, including: (a) prices for energy, labor, packaging, ingredients, and agricultural products may rise faster than current estimates, including increases resulting from currency fluctuations; (b) the Company’s key suppliers may not be able to fund their capital requirements, resulting in disruption in the supplies of the Company’s raw and packaging materials; (c) the credit risks of the Company’s Distributors may increase; (d) the impact of currency fluctuations on amounts owed to the Company by distributors that pay in foreign currencies; (e) the Company’s credit facility, or portion thereof, may become unavailable at a time when needed by the Company to meet critical needs; (f) overall beer consumption may decline; or (g) drinkers of the Company’s products may change their purchase preferences and frequency, which might result in sales declines.

The Company has not received any written comments from the staff of the Securities and Exchange Commission (the “SEC”) regarding the Company’s periodic or current reports that (1) the Company believes are material, (2) were issued not less than 180 days before the end of the Company’s 20202023 fiscal year, and (3) remain unresolved.

Item 1C. Cybersecurity

The Company maintains its principal corporate offices in approximately 54,200 square feet of leased space located in Boston, Massachusetts, the term of which is set to expire in 2031.

The Company owns approximately 76 acres of land in Breinigsville, Pennsylvania, consisting of the two parcels on which the Company’s Pennsylvania Brewery is located. The buildings on this property consist of approximately 1 million square feet of brewery and warehouse space.

The Company owns approximately 57 acres of land in Milton, Delaware, consisting of the two parcels on which the Company’s Milton Brewery is located. The buildings on this property consist of approximately 240,000 square feet of brewery and warehouse space.

The Company owns approximately 10 acres of land in Cincinnati, Ohio, on which the Company’s Cincinnati Brewery is located, and leases, with an option to purchase, approximately 1 acre of land from the City of Cincinnati which abuts its property. The buildings on this property consist of approximately 128,500 square feet of brewery and warehouse space.

The Company owns approximately 62 acres of land in Walden, New York, consisting of an apple orchard and certain buildings, including a small cidery, gift shop, and tour center. The small cidery, gift shop, and tour center on this property consist of approximately 15,000 square feet of space.

The Company owns approximately 1 acre of land in Lewes, Delaware, on which the Company’s Dogfish Head Inn is located. The buildings on this property consists of approximately 8,400 square feet of space.

The Company leases approximately 43,000 square feet of space in Boston, Massachusetts, on which it maintains a Samuel Adams brand tap room and tour center. The current term of the lease for this facility will expire in 2034, although it has an option to extend the term for an additional fifteen years in five-year increments.

The Company leases approximately 6,666 square feet of space in Boston, Massachusetts, on which it maintains a research and development site. The current term of the lease for this facility will expire in 2026, although it has an option to extend the term for an additional three years in one-year increments.

The Company leases approximately 48,650 square feet of space in Los Angeles, California, on which it maintains an Angel City and Truly brand tap room, small brewery, and tour center. The current term of the lease for this facility will expire in 2021.2026.

The Company leases approximately 11,365 square feet of space in Miami, Florida, on which it maintains a tap room, small brewery and tour center. The current term of the lease for this facility will expire in 2023.

The Company leases approximately 9,000 square feet of space in Boston, Massachusetts, on which it maintains a Samuel Adams brand tap room and small brewery. The current term of the lease for this facility will expire in 2028, although it has two options to extend the term for an additional 5 years.

The Company leases approximately 8,900 square feet of space in Cincinnati, Ohio, on which it maintains a Samuel Adams brand tap room and small brewery. The current term of the lease for this facility will expire in 2028.

The Company leases approximately 7,100 square feet of space within the retail section of MCU Park in Brooklyn, New York on which it maintainspreviously maintained a Coney Island brand tap room and small brewery. The current term of the lease for this facility will expire in 2025.

The Company leases approximately 4,490 square feet of space in Rehoboth, DE, on which it maintains Dogfish Head Brewings and Eats, a tap room, small brewery, and the Chesapeake & Maine restaurant. The current term of the lease for this facility will expire in 2029.

The Company, under a development agreement, has access to approximately 900 square feet of space in Windsor, Ontario, on which it maintains a cannabis research and development facility. The current term of the agreement for this facility will expire in 2026.

The Company also leases small offices in Burlington, Vermont, Cincinnati, Vermont andOhio, Montreal, Quebec, and Toronto, Ontario as well as various warehousing facilities across the United States and Canada.

The Company believes that its facilities are adequate for its current needs and that suitable additional space will be available on commercially acceptable terms as required.

The Company is currently not a party to any pendinglegal proceedings and claims, including class action claims, where significant damages are asserted against it. Given the inherent uncertainty of litigation, it is possible that the Company could incur liabilities as a consequence of these claims, which may or threatened litigation, the outcome of which would be expected tomay not have a material adverse effect on itsthe Company’s financial condition or the results of its operations. The Company accrues loss contingencies if, in the opinion of management and its legal counsel, the risk of loss is probable and able to be estimated. Material pending legal proceedings are discussed below.

Not Applicable

PART II.

The graph set forth below shows the value of an investment of $100 on January 1, 20162019 in each of the Company’s stock (“The Boston Beer Company, Inc.”), the Standard & Poor’s 500 Index (“S&P 500 Index”) and the Standard & Poor’s 500 Beverage Index, which consists of producers of alcoholic and non-alcoholic beverages (“S&P 500 Beverages Index”) for the five years ending December 26, 2020.30, 2023.

Total Return Toto Shareholders

(Includes reinvestment of dividends)

The Company’s Class A Common Stock is listed for trading on the New York Stock Exchange under the symbol SAM.

There were 7,8596,875 holders of record of the Company’s Class A Common Stock as of February 12, 2021.23, 2024. Excluded from the number of stockholders of record are stockholders who hold shares in “nominee” or “street” name. The closing price per share of the Company’s Class A Common Stock as of February 12, 2021,23, 2024, as reported under the New York Stock Exchange-Composite Transaction Reporting System, was $1,167.13.$354.43.

Class A Common Stock

At December 26, 2020,30, 2023, the Company had 22,700,000 authorized shares of Class A Common Stock with a par value of $.01,$0.01, of which 10,070,64910,057,950 were issued and outstanding, which includes 65,96824,647 shares that have trading restrictions. The Class A Common Stock has no voting rights, except (1) as required by law, (2) for the election of Class A Directors, and (3) that the approval of the holders of the Class A Common Stock is required for (a) future authorizations or issuances of additional securities which have rights senior to Class A Common Stock, (b) alterations of rights or terms of the Class A or Class B Common Stock as set forth in the Articles of Organization of the Company, (c) certain other amendments of the Articles of Organization of the Company, (d) certain mergers or consolidations with, or acquisitions of, other entities, and (e) sales or dispositions of any significant portion of the Company’s assets.

Class B Common Stock

At December 26, 2020,30, 2023, the Company had 4,200,000 authorized shares of Class B Common Stock with a par value of $.01,$0.01, of which 2,177,9832,068,000 shares were issued and outstanding. The Class B Common Stock has full voting rights, including the right to (1) elect a majority of the members of the Company’s Board of Directors and (2) approve all (a) amendments to the Company’s Articles of Organization, (b) mergers or consolidations with, or acquisitions of, other entities, (c) sales or dispositions of any significant portion of the Company’s assets and, (d) equity-based and other executive compensation, and other significant corporate matters, such as approval of the Company’s independent registered public accounting firm. The Company’s Class B Common Stock is not listed for trading. Each share of Class B Common Stock is freely convertible into one share of Class A Common Stock, upon request of any Class B holder.

As of February 12, 2021,23, 2024, C. James Koch, the Company’s Chairman, was the direct holder of record of all of the Company’s issued and outstanding Class B Common Stock.

The holders of the Class A and Class B Common Stock are entitled to dividends, on a share-for-share basis, only if and when declared by the Board of Directors of the Company out of funds legally available for payment thereof. Since its inception, the Company has not paid dividends and does not currently anticipate paying dividends on its Class A or Class B Common Stock in the foreseeable future.

Repurchases of the Registrants Class A Common Stock

In 1998, the Company began a share repurchase program. Under this program, the Company's Board of Directors has authorized the repurchase of the Company's Class A Stock. On May 18, 2023, the Board of Directors authorized management to implement aan increase in the aggregate expenditure limit for the Company’s stock repurchase program withby $269.0 million, increasing the limit from $931.0 million to $1.2 billion. The Board of Directors did not specify a limit of $931.0 million.date upon which the total authorization would expire and, in the future, can further increase the authorized amount. As of December 26, 2020,30, 2023, the Company hashad repurchased a cumulative total of approximately 13.814.1 million shares of its Class A Common Stock for an aggregate purchase price of approximately $840.7 million.$933.5 million and had approximately $266.5 million remaining on the $1.2 billion stock repurchase expenditure limit set by the Board of Directors.

During the twelve months ended December 26, 2020,fiscal year 2023, the Company repurchased 480and subsequently retired 276,045 shares of its Class A Common Stock as illustrated infor an aggregate purchase price of $92.9 million. Additionally, the table below:Company repurchased 1,891 shares of its Class A Common

All shares that were purchased during the period representStock for repurchases of unvested investment shares issued under the Investment Share Program of the Company’s Employee Equity Incentive Plan.Plan, as illustrated in the table below:

Item 6. [Reserved]