To the Last Drop
By now, Jim Koch could be forgiven for losing his passion, his ambition, his drive to brew what he will gladly tell you — over and over — is “the best beer in the world.” The founder of the Boston Beer Company has devoted the last 20 years of his life to his baby, Samuel Adams beer, and he’s been evangelical about it, barnstorming with a briefcase full of beer from pub to pub, package store to package store. Selling, cajoling, regaling anyone who’ll listen with the Sam Adams story. It’s a great story that’s been told a thousand times: Boston Beer, which Koch started in his Newton kitchen, is now a $240 million publicly traded company, which makes Koch himself worth at least $80 million.
But the beer landscape has changed. Attention has shifted from “craft beers” (microbrews to you and me) to imports, “retros” like Pabst Blue Ribbon, and low-carb beers like Michelob Ultra — for the health-conscious beer drinker. For the smaller local brewers, that has meant retrenchment and a renewed focus on their original Boston and New England markets. For Koch, a man who was once all about publicity, it’s meant getting back to basics. “Microbrews were sold on marketing,” he says. “What really matters is the beer.”
Which helps explain why Koch is getting annoyed at a photographer and me on this gray morning. We’re in a small testing room at the old Haffenreffer brewhouse in Jamaica Plain, used today by Boston Beer Company mostly as a test brewery, where new recipes are tried out and kegs are cooked up for local accounts. (The rest of the Sam Adams beers are brewed and bottled in Cincinnati, where Koch was born and raised.) He’s got his hands wrist-deep in piles of German-grown hops, scrutinizing each pile to determine if it’s usable. As media savvy as Koch is — just 10 minutes earlier, he was smiling frothily for the photographer while standing atop a couple of barrels like an Olympic medalist — the annual hops selection has become much more important than a few pages in a magazine.
“Okay, I really have to do a selection,” Koch tells us impatiently, checking his watch — 9:30, half an hour behind schedule. The room reeks with the sweet, pungent aroma of hops, which smell something like pepper mixed with orange pulp. Koch lowers his nose into a handful of bright green leaves the size of daisy petals. Wearing crisp, pressed white lab coats with “Boston Beer Company” embroidered in blue thread, Koch and three of his Boston-based brewmasters are all business, examining the leaves for disease and wilt, running their fingers through the piles to feel for dryness, and, of course, smelling. They look more like molecular biologists than guys who make beer, and they joke with the photographer by quoting from the movie Zoolander (“Now give me blue steel!”). They compare notes and talk in brewerese about “bale lot numbers” and “typical middle fruit” and “low intensity.” In the end, two piles are rejected.
After years of banking on merely being different from Bud, Koch and other local brewers have once again recognized the need for hands-on attention like this. Boston Beer, on the brink of its 20th anniversary, must adjust to a different business climate by solidifying its leading market position rather than relying on the crazy double-digit growth it used to see regularly. (The company reached its initial five-year goals in five months.) Harpoon has upgraded its brewery and bought back its distribution rights. Ipswich Ale is being made in Ipswich again after a six-year detour to Baltimore, and many local upstarts, such as Edison Light and Wachusett, are selling surprisingly well.
“Rumors of the craft-brewing community’s demise have been greatly exaggerated,” says Todd Alström, cofounder with his brother, Jason, of the Boston-based BeerAdvocate.com, an online community of beer connoisseurs. “It’s constantly evolving and growing. The craft-brewing community is brewing some of the best beers on the planet. Period.”
At the brewery, Koch, his brewmasters, and I taste-test a new hefeweizen recipe and a new limited-edition beer, Chocolate Bock, both of which hit local bars and package stores next month. When I ask Koch (pronounced “cook”) where Sam Adams goes from here, he shrugs his shoulders as if he’s grown tired of that question. He’s sick of commenting on third-quarter performance financials and ad campaigns. He doesn’t want to retread last year’s decision to produce Samuel Adams Light after years of deriding light beers. (He does later anyway: “Good beer drinkers sometimes want light. They had no good choices.”) He gulps from his small plastic tasting cup of Chocolate Bock. The man once known for being pushy and arrogant, who grew famous as the in-your-face, all-over-the-place symbol of his own overachieving startup beer company, whose very voice became recognizable from his ubiquitous radio commercials, seems to have accepted his much quieter place in the beer world.
“Where do we go from here?” he finally says. “We continue to make the best beers in the world here in a little, forgotten corner of Jamaica Plain.”
Beer industry people aren’t like investment bankers or car execs. They don’t wear suits and carry leather briefcases. Well, they might at the Big Three — Anheuser-Busch, Miller Brewing Company, and Coors Brewing Company, the multinational behemoths that together control roughly 80 percent of the $59 billion-a-year U.S. beer market. Craft brewers wear jeans. They laugh easily. They leave the office early to catch their daughters’ field hockey games, as Rich Doyle, CEO and cofounder of Harpoon Brewery, is about to do when I get hold of him.
“This is our best year ever,” Doyle says. “We’re probably going to be up 8 to10 percent for the year. October was our best month ever, thanks in part to the Red Sox and the playoffs.”
And here Doyle has touched on an important point. Whether in victory or defeat — perhaps particularly in defeat — we New Englanders show our true colors, our fiercely local selves. We’re the most regionalistic bunch around — except maybe for those Texans. We support our local bands, our local teams, and our local beer. That’s why some of the local craft brewers are refocusing on their own region.
“Being from Boston has clout,” Doyle says. “It’s a calling card. But if we’re not big in New England, no one wants us anywhere. Our authenticity comes from that, from being from here.”
Doyle is putting his money where his brew kettle is. Last year, Harpoon invested $1.5 million in its South Boston brewery, doubling its capacity in anticipation of future growth. It has cut down from nine year-round brews to four and bought back its own distribution rights so it can better control its sales and marketing.
Mercury Brewing Company is also retrenching. President Rob Martin worked for nine years as a brewmaster for Ipswich Brewing Company until 1999, when he bought the brand from the founders. At the time, half of the Ipswich production was taking place in Baltimore. Martin wondered: How can a beer named for a town on the North Shore be brewed in Baltimore? So in April he brought everything home. The whole operation is now based in Mercury’s brewhouse just off Route 1 in Ipswich.
“People got away from fresh and local, and it didn’t work,” Martin says. “So we’re working hard in our backyard. About 90 percent of our sales are on the North Shore or in Boston. People are supporting local beer — but it has to be local.”
Here, Jim Koch is the exception. For many of the smaller brewers around here, the term “local” has been a harpoon flung specifically at Koch. Most of Boston Beer’s concoctions aren’t brewed in Boston, but in Cincinnati. Some of the beer is made by Miller under contract. Yet for years, Koch swore his was a Boston company and struck back with vindictive complaints about his rivals, particularly Harpoon. (He went so far as to have Harpoon scientifically tested for air content and bacteria.)
Time has changed Koch’s attitude — somewhat. When I bring up the complaints that Sam Adams is not a local brew, his eyes light up. “Who cares?” he snaps. “Sam Adams is one of the greatest breweries in the world. We’re proud to be in Boston, but it means nothing to be a little brewery in Boston.”
He’s got a point. Ford makes cars all over the world, but no one questions whether it’s a Detroit company. Matt and Ben haven’t lived around here for years, but they’re considered Boston boys. So should it matter that Samuel Adams Boston Lager is brewed in Ohio? Sammy is certainly more local than Pabst, which has seen 80 percent growth in the Boston area so far this year after infiltrating the tattooed hipster set in Allston and Cambridge and quickly spreading.
“It’s not about where it’s made. It’s about how it makes you feel and how it tastes,” says Rhonda Kallman, Koch’s right-hand woman for 15 years and now CEO of Randolph-based New Century Brewing Company, whose Edison Light is brewed and bottled at the old Matt’s Brewing Company in Utica, New York. “We consider ourselves a Boston company. I was born here and raised here. Our hearts are here.”
Not all local brewers have adapted. Tremont Ale, for example, once all the rage around Boston, seems to have gone flat. Tremont’s brewery in Charlestown churned out the perfect New England beer: dark but not heavy, thick but surprisingly refreshing. Then, in 2001, the brewing and bottling was contracted out; Tremont is now made in Maine. Consistency problems followed; some bars starting pulling the taps. This month, as Tremont celebrates its 10th anniversary, it will finish the year having brewed fewer than 3,000 barrels, less than half as many as at its peak.
Tremont president Chris Lohring admits it’s been a struggle lately, laying some of the blame on distribution problems and a drop in business after expanding. He insists the brand isn’t on the way out, though. “Draft has been a battle,” Lohring says, “but bottle sales are doing well.” And, like everybody else, he says, “we want to bring the brewing process back to Boston. We’re actively looking.”
Tremont’s problems aren’t unique. The craft-beer market became saturated in the late 1990s. Too many choices; not enough shelf space in the stores. Consumers were confused. Many brewers couldn’t keep their costs in check or their products consistently good. “This is a hard business,” says Harpoon’s Doyle. “It’s hard to make a good case of beer, let alone thousands or millions of them.”
The media moved on, first to dry beers, then ice beers, then malternatives (Smirnoff Ice and the like), and now to Pabst and imports such as Stella Artois. From the looks of barrooms around town, you’d think craft beer had gone the way of the wine cooler.
In fact, out of the limelight though it is, the domestic craft-beer industry is chugging along. It grew by 3.4 percent last year, the 33rd consecutive year of growth, and now does $3.4 billion a year in sales, according to the Association of Brewers, a craft-brewing industry organization. The media’s tastes may have changed, but craft brewers are still pouring a nice, thick head.
Take, for instance, Wachusett Brewing Company, which started in 1994. The company has intentionally kept things small, local, and manageable. It produces around 10,000 barrels a year. (Harpoon, by comparison, brews about 80,000, Boston Beer more than a million, and Anheuser-Busch more than 100 million.) Wachusett’s sales have grown 15 to 20 percent annually for the past five years and are up another 11 percent so far this year.
“We sell only in Massachusetts, focusing on draft beer to build the bottle business,” Wachusett president Ned LaFortune says. “We kept our overhead in check. Others didn’t do that, and they had quality issues. The many closings were a reality check, which the industry needed to have.”
Jim Koch is a natural showman, so it’s impossible to tell if he’s embellishing when he starts to choke up. He’s talking about his family, five generations of midwestern brewmasters. He recalls how his father had to work far from home as breweries across the country shut down in the middle of the last century. During the last six months of his career, the elder Koch earned a total of $500.
“Every few years, he needed to find a new job,” the son remembers, squeezing his eyes shut for a moment. “He was home only on the weekends. Overall, it sucked.” He takes another swig from his plastic tasting cup of Chocolate Bock and continues: “When I started Sam Adams, he said, ‘Jim, you’ve done a lot of stupid things in your life, but this is the stupidest.'”
Charles Koch, who is 81, now sits on the Boston Beer board. There is certainly a do-dad-proud thing at play here, as if Jim Koch is making up for all the hardships his father and grandfather and great-grandfather endured. This may explain why he’s so adamant about pushing forward, not calling it quits. He acknowledges that Boston Beer has not had a great year financially, but the company is not in straits nearly so dire as has been reported. (Stung by a negative piece in Business Week, the once-publicity-keen Koch initially declined to be interviewed for this story; there’s even an online message board thread with the subject “Who Will Buy Boston Beer Contest,” and it’s talking about the company, not the product.) The most recent financial results showed a leveling off after two down quarters, and the stock price is trading near its 52-week high.
“My father’s experience is that the big boys kill the little guys. It took a while for him to realize I wasn’t competing with the big boys,” Koch says, winding up to pitch a not-so-subtle barb at said big boys. “We can never become the next Bud: There’s so little flavor, any mistake can be tasted. For me to have the opportunity to change how Americans think about beer and the way brewers think about the quality of beer is very fulfilling life’s work.”
The beneficiaries of Koch’s work — and Rich Doyle’s and Rob Martin’s, and that of the rest of the local brewers — are still out there. They show up for beer dinners at the Sunset Grill & Tap and pore over the beer menu at Bukowski Tavern. They go to festivals like this month’s Harpoon Christmas party, held inside the Northern Avenue brewery on December 5 and 6, and next month’s Extreme Beer Fest at the Boston Center for the Arts, sponsored by BeerAdvocate.com.
“Hell, yeah, there’s still a local scene,” exclaims BeerAdvocate’s Todd Alström. “Not only do we have a very decent number of outstanding and award-winning breweries, but we also have loads of beer festivals, beer dinners, beer tastings, and beer crawls. And I have to add, ’cause we’re sick of hearing it: Craft beer is not a trend. It’s been around since the first beer was brewed. It’s not going anywhere.”