Balancing innovation, social conscience, and entrepreneurial spirit, the New Belgium brewing company is quickly growing to become a dominant regional brewing power in western and Midwestern markets.
The brewery's initial success can be tracked to a single product - Fat Tire Amber Ale. Stories abound of people coercing friends on business trips to bring back cases of the beer, and allegiances are regularly sworn by recent converts. New Belgium is the brewery that Fat Tire built.
But the story goes far beyond this elusive beer. New Belgium is a highly successful company that has achieved growth while maintaining its core beliefs. A few of the brewery's values include producing world-class beers, environmental stewardship, kindling social and cultural changes as a business role model, and succeeding as a business. New Belgium is the largest private consumer of wind power in America, and has won many awards for its dedication to conservation and the environment.
It's a spirit that shines through during a visit to the brewery, a place that boasts an equal assortment of character and characters. Loud music blasts throughout the brewhouse, while ratty, determined, deceivingly young people rush back and forth with buckets of hops, tugging at fermenter hoses, or checking for quality in the brewery's control lab. While the brewery is filled with many energetic spirits, there is one force keeping New Belgium's band of merry pranksters on course.
Kim Jordan, President of New Belgium, is one of the brewing industry's freshest and most interesting voices. Recently, I spoke with Ms. Jordan about New Belgium's impressive annual growth, recent expansion, and its dedication to social and environmental principles.
ANDY CROUCH How did New Belgium get its start?
KIM JORDAN We started in June of 1991, that's when we actually started production &endash; in the basement of our house. So it's kind of one of those classic, American entrepreneurial success stories. Sometimes its almost embarrassing on that front.
AC How big was the system at that time?
KJ Four and one-quarter barrels.
AC How often did you brew?
KJ We started out brewing less often, once a week or so. Our timing was tremendous. Our beers were good, our labels were interesting to people, and we pretty quickly had a fairly robust following. In our town, there was no one who was making packaged beer. There was a craft brewery, O'Dells &endash; which was doing draft beer only &endash; and there was a brewpub, but there was no way that you could buy beer in a liquor store to take home.
AC Was Fat Tire your first beer?
KJ Yes, pretty much. There were four beers that came out really closely together, but it was probably the first beer.
AC Fat Tire is one of those beers whose reputation has grown to almost mythic proportions, almost like Coors was before it was distributed on the East Coast.
KJ We hear that comparison a lot.
AC How did this all happen?
KJ I think for starters that Fat Tire is a very drinkable beer. It's well balanced, distinctive. It's something where someone who may not be a beer snob per se, will findit is very approachable. And yet it is still full-flavored enough that someone who is really educated in the intricacies of beer can also find it an enjoyable beer. Secondly, it has a great name and a great label. The beer was named actually, because my husband Jeff was on a mountain bike trip in Europe and a nickname for a mountain bike is a fat tire bike. So when he was a homebrewer, he tried to emulate some beers that he had had there, and one of them he named Fat Tire. That was the original recipe and not very far from what we currently make.
AC I'm met and spoken with your brewmaster, Peter Bouckaert, and he has said that he is not 100 percent satisfied with any of the beers he brews and that he is thinking about tweaking Fat Tire.
KJ I think it's my sense, even though this is the only brewery I have ever had a close relationship with, that beer is not that different from wine. This is an agricultural product and the malt changes slightly every year and the International Bittering Units on the hops change slightly batch by batch. So there is always tweaking to be done. Then you decide, well, this yeast strain isn't as robust as we would like so let's try and get a yeast strain with the same flavor component but that is maybe not so difficult to work with. It is my sense, that in most breweries, people are tweaking the recipe slightly because ultimately what you want to do is deliver the very best product to your customer consistently.
AC The craft beer industry grew at just around 1 percent last year while New Belgium grew at over 30 percent. How did a brewery born in a basement grow to become one of America's largest and fastest growing breweries?
KJ I think it's a few things. We are incredibly dedicated to excellence here. We have a staff of people that are dedicated to excellence, and they are also dedicated to great vibe and appreciative, positive outlook, a loving relationship. I know that maybe sounds weird, but we work really hard at being both very skilled and very loving, and I think that has been a fabulous combination for us.
AC Tell me a little more about your community of employees and how they fit into the company.
KJ We are 165 people now. When you talk to people at New Belgium about what wakes them up at night, one of the top two things is losing our sense of community. So everyone here is really clear that if you want community, you have to be purposeful about that. So on one hand you have people who are committed to extending themselves to one another. Years ago, Jeff and I figured out that if we were ever going to have a life &endash; a marriage &endash; we were really going to have to entrust in our co-workers to help us run this company. So we're an open-book management company, that means that all of our co-workers look at our books every month, they can get information regularly off of our financials, and they own 32 percent of the company. We work really hard at what we call "participative management", making sure that decisions are made in appropriate places, making sure that decision-making is as natural as breathing. That combination of love and excellence and knowledge and good intentions is magical. And I also think we are in great markets. We hear a lot of people say, "I buy your beers because they are always excellent and the beer I buy this time is like the beer I will buy next time. I'm not playing beer roulette." I also think we are working very hard at being good corporate citizens, and I think our customers want to participate in that.
AC How do you balance your core brands against some of the more experimental beers you produce?
KJ One of the things that is a strength of ours is that we have a breadth of portfolio. We have a fabulous flagship beer and we can get as esoteric as anyone out there. La Folie has won two gold medals at the Great American Beer Festival for instance. Experimentation serves a couple of functions. One of them certainly is to provide for people in R&D and production to be able to play at something different, more in the brewhouse and the cellar than in packaging for sure. Now that we're a little bigger and can afford to take the time to do it, there is that component of new product that is the life energy, the new blood. Maybe you don't end up making a beer, just the process of exploring it gives you new ideas for other things as well.
AC You recently announced a deal to brew a special kriek beer in conjunction with the Boon Brewery in Belgium. Tell me about this venture.
KJ We have known Frank (Boon) for a while, obviously Peter longer than Jeff or me, and we have wanted in our board and managing group for a while to work on a project with a Belgian brewer. Frank Boon is one of the classics in Belgian brewing, and makes what we think is the best made kriek lambics and guezes. When we we're looking for people with whom we'd be interested in developing a relationship, he was one of the first people we talked with. And he was interested too. It takes someone who is interested in stretching themselves some and do things slightly different to make things work.
AC What are some of the specifics of the venture?
KJ We don't have the technical specifications complete yet, but he will be blending a stronger strength cherry kriek lambic that he will send over in bulk sea containers. We will pick that up at the port and bring it here to blend with something we have worked out. Peter and Frank are working together to get the specifications for each side of the beer. We'll take his beer here and blend it with ours and we will market it. The plan is, at this point, that it will be out in four packs with a different kind of look to it than our regular portfolio.
AC Any anticipated release date on that?
KJ We're not close enough to give it a specific date yet.
AC How many markets are you in?
KJ We are in twelve states. Our thirteenth will be California in the first quarter of 2003.
AC What are your plans for managing growth &endash; and any prospects for future expansion?
KJ We are almost completely done with the (new) brewhouse. We are actually brewing in it now. Then, at some point we will match that ultimate capacity with a new packaging haul. We have a very solid infrastructure with out staff because of the decision-making that we use. So succession planning comes more naturally. But we are beginning to look at those typical mid-sized company issues and attributes to steer our way at keeping what has made us successful and intriguing, and not holding onto roadblocks just because we have done it that way forever.
AC How do you decide whether to enter a new market, such as California?
KJ There are a number of factors we look at. We look at the distribution climate, per capita beer consumption, the demographic and psychographics.
AC Tell me about the new additions at the facility. What is the size of the system?
KJ It's a 200-barrel system with a Merlin kettle, which I believe makes it the second Merlin in the United States.
AC What is the capacity following the expansion?
KJ That will put us at 750,000 barrels.
AC And the present barrelage?
KJ Our capacity right now is about 260,000. We anticipate about 255,000 barrels produced in 2002. We like to utilize those assets.
AC What will your level of growth this year compared to 2001?
KJ I think it's somewhere around 12 to 13 percent, maybe closer to 15 percent. It's been very planned growth this year. We've been in the process of building a new brewhouse and that takes a lot of focus, and preparing for California has taken a lot of focus.
AC You are the keynote speaker at next year's Craft Brewers' Conference. What do you think is the state of the industry and how do you think craft brewers can grow?
KJ I was at the Brewers Association of America conference last month and I was really excited. I talked to a lot of people who were adding capacity or more fermenters or building warehouse space. It was my sense that people were feeling pretty upbeat about their future. It kind of reminded me of the early nineties, which is pretty exciting. So I think the small brewing industry is continuing to gain legitimacy. We have passed the point where people wonder if we are just a fad. I think we have a lot of possibility to make a niche for ourselves as small, regional breweries that are being highly engaged in our communities, good corporate citizens, brewing interesting beers, fulfilling peoples' desires to want to buy something made locally that is more distinctive in taste.