Samuel Adams founder Jim Koch gives an insight into his career, the evolution of the American beer industry, and how he approaches leadership and management.
What role do you think Sam Adams played in the growing popularity of craft beers?
I can’t tell you it happened quickly. It really took 20-something years. When I started, even the term “craft beer” didn’t exist. We were called micros, and it was this radical idea.
It was a long, slow process for the education of a consumer. I had been in thousands of bars, doing wait-staff education, where I’d come in with the ingredients in beer and show them the malt and the hops. I’d show them the hops extract and explain that this is the shortcut that a lot of imported beers use. These are real hops. This is malt.
Beer was sold on the advertising and the marketing of a brand, not the ingredients, brewing process, and the passion of a brewer.
Once people start drinking Sam Adams — or, now, all the craft beers out there — you can’t go back.
Now that you’ve achieved your goal of creating a world where Americans appreciate beer, how do you deal with your place in a growing craft-beer market?
To me, this is a lot better world than when I started. Because it was lonely. And now I’ve got a lot of company. There’s no sense trying to start a revolution if nobody wants to follow. We’ve always tried to be a leader, and leadership doesn’t work if there’s no followers.
For example, after Boston Lager, I started making seasonal beers. Nobody was doing this. And now that’s kind of one of the mainstays of craft brewing. And in the early ’90s, we became the first brewer to age beer in bourbon barrels.
We’ve had increasing competition for 25 years, with more and more people coming into craft brewing. And that just makes us better. That pushes me to continue to raise the quality level and to continue to innovate and make new beers.
What are some new things you’re developing?
There’s a whole bunch of new beers that we’re working on. We’re making beer that is not carbonated, but rather nitrogenated, which completely changes the flavor profile. Beer doesn’t necessarily have to be carbonated. It wasn’t carbonated until 150 years ago.
We’re also exploring some very traditional flavors in beer that have disappeared, like hard root beer, which was very common in the 18th century.
In 2008 you started the Brewing the American dream program to mentor entrepreneurs and provide them with loans. What inspired it?
I’ve long held the belief that as a business, you need to recognize your role in the greater community and acknowledge that you need to do more than just make money for your shareholders.
What’s exciting about being an entrepreneur is that you add value, hopefully in new ways. And what bothered me about that day is we probably spent $20,000 worth of management time to do $3,000 worth of mediocre painting. And that wasn’t, at least to me, adding value.
So I decided to go back to the drawing board and treat our social mission with the same level of creativity and innovation that we brought to the beer business.
After a year of developing an idea, we realized we were good at growing a small business and being creative and that we can bring that to up-and-coming businesses.
I wondered, well, what would have been really useful to me when I was starting Sam Adams? What did I need that wasn’t available? And the two things were access to loan money — ’cause nobody would lend me money — and second, nuts-and-bolts business advice. You know, not big, strategic philosophical stuff.
When I started Sam Adams, I had an MBA from Harvard, a law degree from Harvard, six or seven years of management consulting. But guess what? I didn’t know how to make a sales call. I didn’t know how to design a label. I didn’t know how to do a real-estate lead or set up a payroll. I didn’t know how to get publicity for my business.
So we decided that Brewing the American dream could bring that to small businesses in the industries we know: food, beverage, hospitality.
What’s the most common advice you give entrepreneurs?
The most common thing I remind people of is to only pursue something you love, because a small business is going to be very demanding of your time, your energy — it just eats your life. And if you’re doing something you love, then you will accept and even enjoy that. If you’re just doing it to get rich, you’re gonna lose heart.
I tell everyone, getting rich is life’s biggest booby trap. It comes down to what would you rather be, happy or rich? I say do what’s gonna make you happy.
What has the industry taught you?
I’ve always approached brewing with a sense of humility and reverence. Because it’s been around for 12,000 years, and no matter what you do, you’re only going to add one more brick into this wall.
So in that spirit, I learned to fail small and often. I’ve had innumerable failures, and I’ve done ’em quick and moved on.
It’s beer, you know. It’s not like I’m trying to come out with a new iPhone. We probably make 50 batches for every beer that the consumer sees. So in that sense, for one successful beer, we have 49 failures.
What does drive you?
I remember when we went public. We sold shares to the public, via coupons, on the six-packs. The investment banks hated it, but I was determined we were going to do it. We got $65 million in the mail.
We sold shares to the public, at $15 per share, and to the big investment banks and institutions, for $20 per share. I remember a fund manager berating me for that, and he says: “Wait a minute! You know, I buy lots of shares, I should be the one getting a lower price, not all these beer drinkers.”
And I said, “Well, are you a beer drinker?” And he said, “No, I drink wine.” I said: “Well, that’s my point. I don’t need you. I need all those beer drinkers. So they’re getting the lower price, not you.”
The above article features extracts from an interview by Richard Feloni in UK Business Insider and has been used with his kind permission. The full interview can be found here http://uk.businessinsider.com/samuel-adams-founder-jim-koch-on-craft-beer-revolution-2015-6?r=US
