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What will the glass chips found in Samuel Adams bottles mean for Boston Beer Company?
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Industry:
Food and Beverage
Summary:
The Company is engaged in the business of producing and selling low alcohol beverages in the domestic market and to a lesser
Primary executive:
Martin F. Roper,
Industry:
Consumer Goods
Summary:
The Company is a manufacturer of glass containers in Europe, North America, Asia Pacific and South America. Its principal
Primary executive:
Albert P. L. Stroucken,
On April 7, when most American brewers were celebrating the 75th anniversary of the legalization of beer after Prohibition,
Boston Beer Company had to turn off its taps.
Inspections at the company’s Cincinnati brewery revealed small bits of glass inside some of its bottles, and Boston Beer issued a voluntary recall of an array of 12-ounce beers.
“It was discovered in a pre-filling quality-control process called candling,” said Boston Beer spokesperson Michelle Sullivan. “You fill the first 100 bottles of a new lot of glass with water, and then look at them in front of a big light box.” The first bottles showed small flakes of glass in the bottom, “almost like grains of sand,” said Sullivan.
Beer recalls are pretty rare, and this is the first in Boston Beer’s history. But things like this have happened. Last November, Harpoon Brewery, which is also based in Boston, recalled its limited-edition 100-Barrel Series Pêche, because some bottles were breaking under the pressure of the twice-fermented beer. The Delaware-based Dogfish Head Brewery once had to recall some corked bottles that had a tendency to shatter.
The problem was bigger for Boston Beer, which had an estimated volume of more than 47 million gallons last year. It quickly did checks at all five of its contract plants and turned up the same bottle defects. The lot, embossed on the bottom rim with the code N35 O-I, came from the Auburn, New York, plant of Boston Beer’s single glass supplier,
Owens-Illinois. “It’s a defect in the bottles, not our bottling lines,” said Sullivan, adding that Owens-Illinois had confirmed that statement.
All of Boston Beer’s bottles come from Owens-Illinois, and about 25 percent of that from the Auburn plant. “Significantly less than 1 percent of those bottles had defects,” Sullivan said. “But of course, the standard is zero percent.” Owens-Illinois supplies glass to other craft brewers as well, but there have been no other reports of defects.
The best strategy in any industry recall is to get the word out quickly and completely, take responsibility for the problem, and offer a solution. After a day, Boston Beer has two parts of that well in hand. Wholesalers and retailers knew within hours, in part because Boston Beer sent emails to major beer-enthusiast websites. Boston Beer’s stock dipped yesterday afternoon following news of the recall but recovered by this morning, presumably because of the company’s fast response.
But retailers were concerned about responsibility. Dennis Jenkins, owner of Centre Beer in Newtown, Pennsylvania, said he had 60 cases of Samuel Adams beer. All but the cases of Cherry Wheat had at least some bottles with the N35 O-I code. “I’m not selling any Samuel Adams beer until I get solid information on what’s going on,” he said. “If I do, and something happens to the customer, where do I stand?”
The third step in the recovery strategy—a solution—is more complicated. Boston Beer is having wholesalers and retailers pull the beer from shelves and urging consumers to dispose of the defective bottles. It’s issuing full refunds on potentially affected products.
Still, the root cause of the defect is unknown, and Owens-Illinois has not yet released a statement. There have been glass-bottle shortages in Europe and the U.S. during the past year, stemming from high energy costs and demand from Asia. But Sullivan dismissed the idea that Boston Beer may have had to source bottles from other suppliers. “This was not a problem of supply,” she said.
Inspections at the company’s Cincinnati brewery revealed small bits of glass inside some of its bottles, and Boston Beer issued a voluntary recall of an array of 12-ounce beers.
“It was discovered in a pre-filling quality-control process called candling,” said Boston Beer spokesperson Michelle Sullivan. “You fill the first 100 bottles of a new lot of glass with water, and then look at them in front of a big light box.” The first bottles showed small flakes of glass in the bottom, “almost like grains of sand,” said Sullivan.
Beer recalls are pretty rare, and this is the first in Boston Beer’s history. But things like this have happened. Last November, Harpoon Brewery, which is also based in Boston, recalled its limited-edition 100-Barrel Series Pêche, because some bottles were breaking under the pressure of the twice-fermented beer. The Delaware-based Dogfish Head Brewery once had to recall some corked bottles that had a tendency to shatter.
The problem was bigger for Boston Beer, which had an estimated volume of more than 47 million gallons last year. It quickly did checks at all five of its contract plants and turned up the same bottle defects. The lot, embossed on the bottom rim with the code N35 O-I, came from the Auburn, New York, plant of Boston Beer’s single glass supplier,
All of Boston Beer’s bottles come from Owens-Illinois, and about 25 percent of that from the Auburn plant. “Significantly less than 1 percent of those bottles had defects,” Sullivan said. “But of course, the standard is zero percent.” Owens-Illinois supplies glass to other craft brewers as well, but there have been no other reports of defects.
The best strategy in any industry recall is to get the word out quickly and completely, take responsibility for the problem, and offer a solution. After a day, Boston Beer has two parts of that well in hand. Wholesalers and retailers knew within hours, in part because Boston Beer sent emails to major beer-enthusiast websites. Boston Beer’s stock dipped yesterday afternoon following news of the recall but recovered by this morning, presumably because of the company’s fast response.
But retailers were concerned about responsibility. Dennis Jenkins, owner of Centre Beer in Newtown, Pennsylvania, said he had 60 cases of Samuel Adams beer. All but the cases of Cherry Wheat had at least some bottles with the N35 O-I code. “I’m not selling any Samuel Adams beer until I get solid information on what’s going on,” he said. “If I do, and something happens to the customer, where do I stand?”
The third step in the recovery strategy—a solution—is more complicated. Boston Beer is having wholesalers and retailers pull the beer from shelves and urging consumers to dispose of the defective bottles. It’s issuing full refunds on potentially affected products.
Still, the root cause of the defect is unknown, and Owens-Illinois has not yet released a statement. There have been glass-bottle shortages in Europe and the U.S. during the past year, stemming from high energy costs and demand from Asia. But Sullivan dismissed the idea that Boston Beer may have had to source bottles from other suppliers. “This was not a problem of supply,” she said.




