My First Book Review For BeerNexus.com II love craft beer and definitely like to read many of the articles I see online, but there aren’t a lot of books about craft beer that really peak my interest. Recently a couple of my fiends…oh sorry friends had read “Quench Your Own Thirst” by Jim Koch and passed it on to me. I’m a big admirer of Jim as I know he had a lot to do with the growth and current craft beer scene today, so yea I’ll read it. I thought he probably wrote it many years ago since Sam Adams was formed back in the 80’s; yes the last century; and he should have had time to write it after 20 plus years but to my surprise this was published in 2016, so relatively recently. It was a quick read with many small chapters with a good flow and lots of observations, learning points, dos and don’ts and encouragement along the way. Jim was better prepared than many of today’s home brewers/entrepreneurs who want to venture into the land of being a commercial craft brewer, in that he was a Harvard grad and had an established and successful career in business consulting, helping other companies solve their problems. He was also lucky to grow up in a family with a great work ethic also involved in brewing; not to mention his great-great- grandfather’s recipe. It’s not just a book on how he started Sam Adams but for those who don’t want to take the path that others or society are suggesting; taking risks/following your own gut can be challenging and rewarding. He didn’t know he was going to start a brewery, he knew he wanted to be an entrepreneur and had to figure out in what. His first and primary lesson; every problem has a solution. His approach has always been to look at the issue you’re having and figure out how to address/fix it. It doesn’t mean the solution is easy or obvious and it may take time and some trial and error to find it, but there is a solution. And if you don’t have it maybe someone else may have the answer because their thought process, approach or basic knowledge or understanding is different. Think of the beer business back in the 80’s. Domestic beer was dominated by the major brewers bland lagers and regionals were beginning to have a harder time competing. And Americans were intrigued by the tradition and expected better quality of the foreign beers as they came marching in trying to capture a spot in our market. Fritz Maytag and his success at Anchor Steam were a major influence creating an outlier to the everyday established norm and was a major germination seed in what would be The Boston Beer Company. And think of the issues he faced that current craft breweries twenty or thirty years later - • One of the biggest questions he had to face; who is going to buy this? There was no discernable segment of beer drinkers who were clamoring for better tasting beer. • What to name a new entry into the beer world? Even Fritz didn’t have that problem since Anchor Steam was an existing beer. Today you can use any crazy name for the brewery and even crazier for the beer itself. • Think of how difficult it was to get investors for a craft beer company thirty five years ago, which is why it took a guy like Fritz Maytag and his money to make Anchor Steam the success it was. Compare that to today when craft breweries are approaching seven thousand; guess there’s a lot more available capital now than then. • What about the time and effort to sell a new beer to bars and restaurants compared to today. How many draft lines did bars have thirty years ago vs. today when they can have a couple of dozen or close to a hundred. • Also different for that period; spending time in bars educating consumers and servers. He could and did learn a lot talking face to face with the customers, understanding what their thoughts and hot buttons were. Just as discussions with the bar owners and personnel and retailers who’ve been in the business could bring insight on many different issues. Today’s craft beer clientele certainly has a much higher level of understanding but there is still room for more learning as we see with beer seminars, tastings and dinners as well as the BJCP constantly training certified beer judges. And there is Cicerone training and certification for servers to hone their craft. One major success approach; Quality is more important than price. That was a major premise in making Sam Adams Lager; that we Americans would pay a little more for a higher quality beer if we knew about it. That was certainly a big struggle early but look at craft beer now. There are many breweries making high quality beers and selling them for $13 to $20 for a four pack and we’re buying them because we love the taste. There are many who are still very happy with a 30 pack of Milwaukee’s Best or Icehouse or Natural Light, but they’re drinking without tasting much which may well be fine for them. And following along those lines, the best marketing in the world won’t sell a bad product. Marketing lets a good product speak for itself. Another major factor in his success was creating the right business culture. Creating a company’s core values and having them be more than just some words written somewhere but understood and followed by all. Looking for and hiring the right people; from his first partner who he worked with as an admin assistant, who was smart, liked people and bartended on the side; someone who fit in well and brought to the table many of the things to compliment his knowledge and skills. Hiring the MBA or PhD that walks in the door with a great resume is always enticing but the best person for the job may be the guy/girl who started at the bottom and worked their way up the ladder and knows more about the process and company than anyone else. Hiring one of the best consulting brewmasters he could find to work with him converting his last century recipe to modern day equipment and contracting with a brewery that was also willing to work with him to brew beer differently than the current approach. Sure sometimes finding the right person or place is part luck, but understanding what you need and not settling play a part also. And today their new employee orientation starts out with a tasting class by Jim. They need to understand and be able to talk about the beer and the brewery. Something I never would have guessed was also a major reason for success; Contract brewing. That was what allowed them to expand as quickly as they did. They never needed to go look for more capital to invest in more equipment and space, they could ramp up production by buying more raw materials and/or finding another contract brewer. I must say I have many times questioned a craft brewer who contract brews, but after really understanding how that can be both cost efficient and brew better beer, I’m changing my tune. I have seen many a small craft operation that isn’t all that sophisticated and it may well work for a startup, but ramping that up can be tough. Now for those who just want to start a craft brewery and use contract brewing to find a different style/taste then I’m not nearly as enamored by that type of effort, but if you’ve homebrewed and want to take it to the next step this can be a much smarter way. Their approach to expansion was also measured. They pursued “organic growth”, moving into new areas when they were getting calls to be there, rather than pushing to open new markets which may not be ready for them or they be ready to handle properly. Jim also developed what he calls, The String Theory. A small company with great culture and values can beat bigger companies flush with money and resources. It certainly sounds counterintuitive but it makes sense because the small company will better value and use their resources, because of the culture. Don’t be spending time and money on things you don’t need. Just hiring someone to get more work done doesn’t always work; new employees take time to train and also time from their manager. Can you do it another way quicker or reorganize the work to be more efficient. And looking at the supply side to see where the cost of goods and services you buy and use is another way to be more cost efficient. Highlights along the way - • 1985 GABF – huge publicity • Doubling in size every eighteen months in the 1980’s. • Exporting to Germany and challenging the foreign imports – They were sending inferior beer to us and obviously a much easier target than trying to go after the US mega brewers. • Adding freshness dating, not in a code, but a simple easy to read date, and doing buy backs on outdated beer. • 1995 IPO – actually selling to consumers by advertising in their six packs. • Surviving the 1996 A-B attack on contract brewing and their attempt to buy up most of the Hallertau hops depriving Boston Beer of an important ingredient. • 1997 – Buying one of their contract breweries, Hudepohl-Schoenling brewery in his hometown Cincinnati. • 1995-2003 – sticking with it and not giving up and selling out when all of a sudden you have virtually no growth. • Learning from failure to drive success across the craft beer segment but also with the introduction of Twisted Tea and Angry Orchid. • 2005- finally realizing that the best advertising was telling their story • 2007 - staying innovative introducing the Sam Adams Beer Glass • 2008 – understanding that giving back is an important part of success and setting up the Sam Adams Brewing The American Dream. Working with small entrepreneurs, not just brewers, with education, training, technical support and loans. Well I’ve probably told you too much already, but there’s more to be revealed. This is a book written for small business entrepreneurs not just craft brewers. If you’re a craft beer lover and want to learn about the very young history of our craft beer movement and maybe even pick up a few tips that could apply to you and your ventures maybe you’ll want to spend a little time, Quench”ing” Your Own Thirst. I think I need a Sam Octoberfest about now… Glenn DeLuca writes about beer and culture of drinking. He may be reached by writing thebigG@beernexus.com. *** *** *** |
Glenn DeLuca
Outtakes from a life of beer.
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