How Jim Koch turned a family recipe into a $500m industry

Budweiser, Miller and Coors dominated the American beer market before Jim Koch came along with his nineteenth-century family recipe.


Jim Koch with "the best beer in America"

"There's nothing like the first pull off a fresh keg at the brewery where it was made," says Jim Koch, founder and CEO of the Boston Beer Company on a tour round his brewery.

Yet if anything, says Radio Boston, that underplays the enthusiasm with which the "godfather of craft beers" views his product.

Koch's brewing skills may have made him the billionaire head of a large, publicly traded company, but his "effervescent charm" has lost none of its sparkle. This man really loves beer and he loves making it. "I feel like Willy Wonka," he says. "This is the chocolate factory."

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In New England these days, every bar seems to have a couple if not dozens of craft beers on tap. But when Koch started out 30 years ago, it was virtually impossible to buy anything other than Budweiser, Miller or Coors.

He is credited with pioneering a renaissance in flavourful, traditional beer, epitomised by his own core brand, Samuel Adams. Ironically, as the kingpin of a small, but rapidly growing niche sector (see below), he's now seen by some as "the big brewer in the room".

Koch certainly has an interesting narrative behind his brand, says the Fast Company. Born in Cincinnati, into the sixth generation of a Midwestern brewing dynasty, he seemed destined for other things. His father, Charles Koch, had abandoned the family business after it was engulfed by corporate consolidation and a tidal wave of pale lager.

After leaving Harvard, Koch joined the Boston Consulting Group, eventually deciding to trade in his six-figure salary to return to his roots. When Koch told his father, he thought he'd be thrilled. "Didn't happen that way. He looked at me and said, Jim, you've done some stupid things in your life. That's just about the stupidest'."

Yet, Koch was convinced he could find a niche for a high-quality American beer and, tucked away in his parents' attic, was his means: a family recipe dating back to the 1800s, which he used to create his first beer.

He named it Samuel Adams, after the US independence hero who was also a brewer. That helped shift sales when the beer made its Boston debut on Patriot's Day in 1985. But ultimately, it was the taste that swung it.

Six weeks after its introduction, Samuel Adams was voted "Best Beer in America" at an influential beer festival, and demand mushroomed. By year end, sales had reached 500 barrels, and distribution extended as far as Germany. In 1995, Koch took the company public.

Three decades on, the Boston Beer Company is now "almost a household name", with annual sales topping$500m and a product line comprising more than 50 beers, says The Wall Street Journal.

Koch has "revolutionised American beer" and has no plans toend his campaign. "I have a succession plan, and it has worked flawlesslyevery day for 30 years," he concludes: "don't die."

Will microbreweries survive the hop crunch?

Craft brewing "is like a pandemic that's spreading everywhere. Even China has 1,000 craft brewers", says Alex Barth of the German hop-trader Barth-Haas. But not all is rosy in the hop garden.

Because they use between four and ten times more hops than the average industrial lager, growers can't keep pace with the growing popularity of these beers. A "hop crunch" is on and it "stands to hurt microbrewers most".

The craft beer world "is full of nice, easy-going, collaborative entrepreneurs who disdain down-and-dirty competition", says Brad Tuttle in Time "or at least it used to be". While it was acceptable to bash Big Beer, the prevailing ethos in craftbrewing was one of co-operation and collaboration. That'schanging.

Earlier this year the Boston Beer Company wasaccused by a Californian microbrewer of "specifically targetingits business and trying to replace its brands on tap whereverpossible".

The accusation offended Koch. Indeed, he believesthere's "a shared responsibility to help those who are followingthe path we have worked hard to pave", and he has formed astart-up programme to that end. It is hard to swallow the fact,says Boston Radio, that "tiny craft brewers may look at him theway Koch himself looks at Anheuser-Busch".

Still, no one meeting Koch could doubt his enthusiasm andexpertise in the craft, says Charles Passy on fine-tuning new recipes, he is proudest of Utopias an exclusive, uncarbonated, beer that's high in alcohol (29%),"reminiscent taste-wise of a fine port". At $190 a bottle, "it'shardly your normal beer".