Sam Adams founder shares his beer lessons
In craft beer’s earlier days, the parent company of Budweiser tried to quash the growing industry by taking aim at Samuel Adams brewer Jim Koch.
Anheuser-Busch chairman August Busch III launched an all-out assault on the upstart Boston brewer in 1995 for its practice of contracting with other facilities to brew its beer, which was controversial at the time but now widely accepted.
So, as Koch recalls in his new book, he called Pete Coors, CEO of Coors Brewing in Golden, for guidance.
“I had met him a couple of times and knew him as a genuinely nice guy,” Koch writes in “Quench Your Thirst: Business Lessons Learned Over a Beer or Two.” His advice to me was likewise to stay cool and take my licks. “‘Jim, what I’ve learned is that if you punch August in the nose, he’ll break every bone in your body.’ ”
As we all know now, it didn’t work. Boston Beer Company helped lead a craft beer revolution in America.
Before a recent book signing in Denver, Koch sat down for a wide-ranging talk about what he has learned about business and beer since founding the company in 1984.
Here are edited excerpts from the interview:
On the future of craft beer and its challenges:
I think it will continue to grow. I think there’s room for 10,000 craft breweries. (There are more than 4,000 craft breweries in America now.) But I think there’s some storm clouds that you see here (in Colorado) with Breckenridge Brewery selling to Anheuser-Busch.
That’s one of the issues that threatens the culture of craft breweries — when it becomes part of the big global brewers that have been so successful at generating financial returns. I think craft breweries succeeded because we’ve been motivated by passion for brewing and love for beer. And when it becomes a money game, that’s new territory.
On writing the book: I realized there were a lot of people out there that maybe I could help by sharing what I learned. I don’t have some great business truth. When people say what’s the single most important thing you learned? Well, there is no single most important thing.
Over the years I collected stories and lessons I learned from them. In this box were beer coasters, bar napkins and even matchbooks … I had about 80 of them and about half of them made it in the book.
A lot of what’s in “Quench Your Own Thirst” is very counterintuitive. You’re not going to find it in a normal business book. There’s a lot of failures, even some colossal screwups. And some of the stories are actually cleaned up to take the felonies out.
On a lesson learned from his father:
When I started Sam Adams, everybody thought the beer business was all marketing. The beer was the same, but you could be successful with awesome marketing. My dad told me something I never forgot, which is: “People don’t drink the marketing. They drink the beer.” So we were determined to focus on the beer. And Sam Adams is the result.
We’ve never been cool. We’ve never been hip and new. Yet for 30 years we’ve been the leading craft brewer in the United States. And I think now that (approach) has become a common thread among craft brewers, which is focusing on the beer.
On what it takes to make a good nitro IPA:
We found a way to make a nitro IPA that nobody’s doing. Taking the CO2 out and putting the nitrogen into the beer is transformative. You can’t take a regular IPA and nitro it. That’s what a lot of people have been trying to do on draft. It doesn’t work.
To get a really good hop flavor from nitro, you have to amp the hops up to way beyond what you think. So this needs to be 100 IBUs, and it drinks like 50. And this is just radically different from everything else. Even when you open it, it doesn’t sound like a regular can.
On what it takes to be successful in business:
If you are going to start a business, your product either has to be better than the alternative or cheaper than the alternative. It’s a very simple rule.
So you have to ask yourself, “What is it about my product — not my cute name, or even the fact that I’m local?” Local doesn’t really make me better. All these things at the end of the day are just gimmicks.
On whether the rules about local breweries are changing:
I think there is a business model now built around a taproom. You can be better in the sense that you are the nearest one. Now you are never going to be the next New Belgium or Sam Adams.
On the most important lesson in business:
When you are looking at a career or a business, ask yourself: “Is this going to make me happy?” Most people look at it and go, “Can I get rich?” And they try to build a business around what will make them a lot of money. And my counterpoint to that is: What would you rather be, happy or rich?
When I started Boston Beer Company, my original business plan — which is embarrassing now — was to take five years to grow to 5,000 barrels and level off. Nobody starts a craft brewery now with such modest expectations, but that was what I started with. I started a business that I thought would make me happy, and that’s my advice.
On why craft beer, now 12 percent of the total beer market, isn’t growing faster:
This got cut out of the book. But it was a lesson I learned from my girlfriend in high school. Back then, she reminded me, “Jim, nothing good happens fast.” And I hated to hear that when I was 16 from my girlfriend, but she was right. It does take time.
We are changing attitudes about beer. I was doing this when it wasn’t popular or seen as a way to make a lot of money. I was doing it at a time when you had to be crazy and passionate about beer to want to do it. So I’m OK that it’s taken us all these years.