Jim Koch’s unvarnished, unconventional take on the beer business

2012 Jim & BeersWEB

Jim Koch // Photo courtesy of Boston Beer Company

This past year, the spotlight has been on one of craft beer’s forefathers and icons, Jim Koch, the founder and CEO of Boston Beer Company. Boston Beer has been losing market share for two straight quarters, including their Angry Orchard cider, despite a booming cider revival that has seen 71% and 11% growth in 2014 and 2015, respectively.

quench_your_own_thirst_jacket_approved_82015.inddDuring that time, Koch also came out with a new book on the business of brewing, “Quench Your Own Thirst,” which is really more of a memoir of his beginnings and growth with Boston Beer and the Samuel Adam’s brand. The book follows in the footsteps of other similar titles, like Dogfish Head founder Sam Calagione’s “Brewing up a Business,” in that it reminisces about the rebel spirit of the early days of craft brewing and the continued David versus Goliath mentality between craft and big beer.

Koch’s book differs from the others, though, in its focus on the business side of brewing. Koch has a JD, MBA, and BA from Harvard University, and was a successful business consultant before quitting to brew and sell his family’s six-generation-old beer recipe, Samuel Adams Boston Lager. Don’t let his Ivy League pedigree fool you though: Koch still holds some less-traditional views, which are highlighted throughout the book, including his infamous “fuck you” rule.

A recurring theme throughout the book is Koch’s belief in doing things for the sake of experience. His views echo those of fellow innovator Steve Jobs, who touted the pursuit of occupations and academic endeavors that piqued his interest but had seemingly no applicability in the real world. Jobs was known for taking a calligraphy course in college that would one day lead to the multiple typefaces available on Macs and subsequent personal computers.

Though school can offer many forms of experience, “you have to think outside the box,” Koch said in a personal interview. “The military is a great source of that. There’s a character in the book who comes and goes, John Wing. He had that sort of situational wisdom and leadership that he got by going to West Point, by going to Vietnam. There are lots of places that are not the normal business school things. Maybe a start-up for no money. That’s a really interesting opportunity to understand what it’s like in the trenches. You don’t get that from books.”

For Koch, that outside the box opportunity came when he dropped out of one of the most prestigious schools in the nation (Harvard) and took a job as an instructor with Outward Bound in Golden, Colorado. Although he only made $700 a month, the experience provided him with several parables for working hard and also enjoying what you do.

Jim Koch & First Cases

Jim Koch in 1985 with the first cases of Samuel Adams // Photo courtesy of Boston Beer Company

Koch speaks freely about some of his more surprising business advice, including the rule that anyone at his company can freely tell his or her boss “fuck you.” He explained those two words carry a lot of negative connotation, but really just serve as an emotive statement that needs to be backed up. “There are a lot of corollaries to it where nobody can be sanctioned or reprimanded. People can usually work it out. You have the right to say “fuck you” if that’s how you really feel. It’s suggested you go to somebody who can make a difference, otherwise it’s just whining. You have to explain what you meant by it and what the person did to put you in that special “fuck you” frame of mind, and then you have to listen to their side of the story, because there always is one,” explained Koch.

After reading the book myself, it occurred to me that some beer-purists may interpret recent decisions at Boston Beer as counterintuitive to the company’s founding values and continued motto of “better beer.” Boston Beer launched the Twisted Tea brand in 2000 and has recently entered the hard-seltzer market with Truly Spiked & Sparkling—both of which seem to be a far cry from craft beer. When asked if this was a ploy to jump on the bandwagon of a growing industry, Koch related the creation of Truly to Boston Beer’s early days as a trendsetter in the craft beer world.

Samuel Adams Cranberry LambicWEB“From the very beginning we’ve always been the craft brewer who was willing to do unconventional things,” he said. “I’ll go back to 1988, when we made Sam Adams Cranberry Lambic, the first lambic in the U.S. I got criticized by other craft brewers because back then craft brewing was all about brewing to style, faithfully recreating Old World styles of beer here in the United States, and all of sudden we’re making this unconventional lambic with a non-traditional fruit. Five years later we were the first brewery to age beer in used spirit barrels, which we did for Sam Adams Triple Bock. Believe it or not, nobody had done that before. And now it’s one of the most foundational techniques of craft brewing.”

With regards to expanding outside of beer and into hard beverages, Koch continued, “My feeling is, those are your boundaries but they’re not my boundaries. So if I see some cool, new thing, I’m going to do it. I’ve learned that you cannot put up fences around creativity.”

Lately, though, Boston Beer’s beer offerings seem following in the path of other industry successes, such as adding grapefruit flavors to IPAs and a line of nitrogen-infused canned beers, compared to the company’s early days of barrel-aging and creating non-existent styles such as the port-like Utopias that remains one of the strongest beers in the world at over 20% ABV and has attained a cult following.

Despite what his critics may say, as well as the continued emergence of new breweries that are eroding the long-held market share of Boston Beer, Koch makes no bones about his support of the craft industry. Koch said that all profits from his book will go to Brewing the American Dream foundation, which provides small businesses with microloans and advice. Asked if supporting startup breweries could potentially create a competitor, Koch explained he doesn’t even think about that. “We do it because it’s part of our culture and our values, which then liberates us from asking the extremely difficult question of whether this is a great business strategy,” he explained. “It’s part of who we are; it helps preserve the unique culture of craft brewers trying to succeed together.”

Whether the reader is a craft beer devotee or an aspiring entrepreneur, there is plenty to glean from the pages of “Quench Your Own Thirst.” If anything, it’s an insight into the mind of an extremely successful businessman who was able to change the way Americans view a market that had been relatively homogeneous for five decades. Koch has continued to forge his own path of success, and is finally ready to share his thoughts in his own unabashed way. “These books about start-ups, there’s a bit of ghost writer, fairytale element to them that I wanted to keep out of ‘Quench Your Own Thirst.’ It’s an unvarnished, unconventional business book,” he said.

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