20 Years and Still Pedaling

It’s the penultimate day of September in Denver and anyone who’s ever been within a few hours’ drive of the Mile High City—or within a few feet of a pint glass—in early autumn knows that the Colorado capital is pulsating with the energy of its own annual answer to the Super Bowl. Yes, it’s day one of the Great American Beer Festival (GABF to the devout), an event that 49,000 or so beer aficionados making a pilgrimage to the Colorado Convention Center anticipate with fermented fervor during the preceding 12 months. 

It’s a rare thing to find a quiet corner of the city during the three-day event, but miraculously the stylish, classically adorned lobby of a downtown hotel within spitting distance of the host venue provided a brief respite from the hop-and-malt mayhem. It’s the ideal spot to chat with GABF veteran Kim Jordan, CEO and co-founder of New Belgium Brewing Co., who’s just driven the roughly 60 miles due south from the brewery’s Fort Collins, Colo. headquarters for the long weekend’s events. This year’s festival represents a bit of a milestone for New Belgium, as it occurs in the year of the brewery’s 20th anniversary. 

“My first GABF was when I was not in the industry yet, which was probably 1989,” Jordan recalls. “My first GABF as New Belgium was 1991. We started making beer in June and we were here in September for our first foray.”

It was shortly before that when Jordan’s then-husband Jeff Lebesch, an electrical engineer and home brewer, famously rode fat-tired bikes across Belgium and found his inspiration. Their basement became New Belgium’s first production facility.

Those days seem practically a world away, not just for Jordan and New Belgium, but for the entire craft segment. “At the time [GABF] didn’t have [competition] categories for Belgian-style beers,” she remembers. “Many of our beers didn’t get judged because there were no categories.” 

That’s quite a contrast with what the festival looks like now. Of the more than 80 judging categories, nine are for Belgian styles or styles that at least incorporate some sort of Belgian influence. It’s reasonable enough to argue that New Belgium had been part of the vanguard of America’s Belgian-style beer movement, as many that have come after have either chosen to specialize in the brews of its namesake Western European motherland or integrated a few Flanders-and-Wallonia-inspired styles. (Even those whose operations predated New Belgium have more than dabbled.) 

New Belgium, of course, looks a lot different now as well. What started as a two-person operation is now the third-largest craft brewery in the United States, employing nearly 400 (including a bit of “old” Belgium; Belgian-born brew master Peter Brouckaert previously worked at Roeselare, Belgium-based Rodenbach). Last year, it produced more than 660,000 barrels of beers like flagship amber ale Fat Tire, 1554 black ale, Abbey Belgian-style dubbel, Mothership Wit and La Folie sour brown ale—to name but a few—at its eco-conscious headquarters, which sits on about 50 acres of land. 

 

Methodical Moves

Over the years New Belgium—or, more specifically Fat Tire—has enjoyed something of a dual personality in the U.S. For most major markets west of the Mississippi, the flagship brew is nearly ubiquitous. In most East Coast markets it’s known as perhaps the most popular beer no one’s ever had (save westbound travelers and those whose friends and families have spirited a few bottles back East.)

But that’s been changing somewhat—albeit at a very deliberate pace. In 2008, New Belgium’s brands arrived on the East Coast by launching in North Carolina. This past August, New Belgium entered Maryland, Virginia and Washington, D.C. Its brands are now available in 28 states plus the District of Columbia. “We’ve been met with wild enthusiasm in those markets, which of course is great,” offers Jordan. 

Are there immediate plans to launch in additional states? 

“Not any time soon,” Jordan says. “We try to do an annual plan of what it is we’re going to do. We have a particular way we like to roll out in a marketplace. We’re busy working on [Maryland, Virginia and D.C.] to make sure we’re getting that done and getting to develop great relationships with our distributors there. It just all takes time, and right now we’re in that capacity/new territory dance, where we’re trying to make sure that the capacity we have is adequate for the territories we’re in.” She does not rule out opening another state in a year or so. “We’re debating how that will look in another year when we’ll absolutely be at the top of our capacity,” she says. 

The brewery may soon be getting some relief for its capacity issues in the form of a new brewing facility somewhere in the eastern slice of the United States. Jordan confirms that the company is in the process of researching cities for the site and has narrowed it down to five contenders. She is not at liberty to say which five.

 “What constantly surprises me about New Belgium is that [Jordan] has managed the impossible: to keep expanding size and sales—now she’s building a new brewery!? On the other side of the country!—and [managed] to keep true to the ‘we can recreate capitalism’ mode of thinking,” observes Maureen Ogle, historian and author of the 2006 book Ambitious Brew: The Story of American Beer, which takes readers through U.S. brewing history from the earliest immigrant brewers through the 21st century craft beer movement. “Usually by the time a company gets as big as New Belgium is, it’s long since lost its small-is-beautiful luster.” 

As New Belgium has become famous for its deliberate approach of selecting which states to launch, it’s somewhat surprising that there was a time, early in its history, when it had to pull back from a couple of territories due to the intricate capacity-distribution relationship. In the mid-’90s the brewery pulled out of Washington State, Minnesota and, one of the markets it just opened this past summer, Washington, D.C.—“a disparate set of footprints, to be sure,” Jordan notes. 

These days, she points out, “We’re pretty methodical about the way we roll out. We spend a lot of time researching the distribution landscape and we interview a lot of retailers to get their sense of the lay of the land. Choosing a distributor in many states is more stringent than getting married, by far. So you want to do that wisely and with great care.” 

In recent years there have been a couple of high-profile examples of regional craft brewers pulling out of markets in which their products had been distributed. 

In 2006, Kalamazoo, Mich.-based Bell’s Brewing famously pulled out of Illinois for what that company said was a contentious relationship with distributors not giving its brands proper attention in the marketplace. Ironclad franchise laws in the state prevented the brewer from simply terminating its relationship with its wholesaler partners. Bell’s returned two years later with a new distribution deal. 

More recently, just this past spring, Milton, Del.-based Dogfish Head made headlines when it announced its decision to pull out of four states: Indiana, Rhode Island, Tennessee and Wisconsin. According to that company, it was due to a desire to manage its own capacity/demand issues, where the latter was putting significant stress on the former. 

A year prior, Longmont, Colo.-based Oskar Blues announced its pullout from Idaho.

“I think we’re kind of known for our rollout process,” Jordan observes. “We tend to want to make sure that we have staffing in place and that we have a plan for how we’re going to invest in the brand in that critical rollout phase. I also think that we have a pretty good understanding of what our role is in the sales dance with the distributor and what our responsibility is. So, while certainly there are times when you wish for more focus and you wish for better execution, when we roll out into a new market, we have a pretty good idea of what we’re each supposed to be doing.” 

That dynamic has been apparent at Portland, Ore.-based Columbia Distributing, a major wholesaler that operates in both Oregon and Washington state. Columbia—which in 2008 merged with Mt. Hood Distributing and Gold River Distributing to form Coho Distributing LLC—has had New Belgium brands in its portfolio for just over a decade and, says Columbia CEO Gregg Christiansen, the brewer has been a “great partner.”

“[New Belgium’s people] are very active on the street,” Christiansen says. “They support our sales staff and they’re very good at ensuring quality in their products all the way to their consumers.”

Christiansen admits that when Columbia took on New Belgium’s products in 2001, he was initially concerned that the Colorado brewer would have some difficulty in Pacific Northwest craft beer markets dominated by strong local brands. 

“We were among the first expansion states for [New Belgium],” Christiansen recalls. “That was a tough task because the craft category in Washington and Oregon was so big and strong. It’s really provincial…New Belgium was actually one of the first regional breweries to come into Washington and Oregon with a lot of success.”

A big part of that success has been due to the level of homework the brewer does. “Before they move on to the next state,” Christiansen notes, “they ensure that they’ve got their product in the right position and moving in the right direction in their current geographic framework.” 

 

The New Class

When the Brewers Association announced its mid-year sales numbers a few months ago—dollar sales were up 15 percent during the first half of 2011 and volume was up 14 percent for the period—it also noted that the number of breweries in planning hit a record high of 700-plus. Currently there are nearly 1,800 operating in the U.S. 

With 20 years under its belt, New Belgium is something of an elder statesman among craft brewers, certainly in relation to the new startups and startups-to-be. If there’s any advice Jordan could give to those breweries that have come after her own, it’s this: “It’s important to love what it is you’re doing because you’re going to have to do a lot of it, including scrubbing. Some of the jobs in brewing are repetitive. [Be aware of] the breadth of jobs there are to do in the beginning in an entrepreneurial company. You do most of them and you have to do them for a long number of hours and it’s good to love that.”

Further wisdom might be gleaned from the Bard: “To thine own self be true.” 

“One of the things that has made new Belgium successful was we did a pretty good job on the front end of understanding whom we wanted to be—really sticking with that and writing down, codifying, if you will, what was important to us. I have found that, time and again in retrospect, to have been hugely useful, especially when you bring on co-workers and grow in size.” 

That certainly doesn’t preclude having a willingness to evolve and experiment a bit with one’s brand portfolio. The company that was so influenced by the brewing traditions of a particular country that it named itself after that country, has, in recent years launched products whose profiles were markedly un-Belgian. The most notable of those is Ranger IPA, the brewery’s offering in the incredibly popular American India Pale Ale segment (itself an evolution of the classic English style). The 6.5 percent alcohol-by-volume brew clocks in at 70 International Bitterness Units (IBUs), thanks to the combination of Chinook, Simcoe and Cascade hops. The seasonals Hoptober Golden Ale and Mighty Arrow also have a more pronounced hop profile. 

“It honestly did take us a while to say, ‘Okay, even though we’re an American brewery and our name is New Belgium, we’re going to stray outside of the orthodoxy,’” Jordan says. However, she’s quick to note that the brewery’s Blue Paddle offering, which has been in the company’s portfolio for quite some time, is a pilsner. Though, she adds, pilsners are made worldwide, including in Belgium.

“We had wanted to make hoppy beer for a very long time and had a lot of internal discussion about whether, given our name, it was an appropriate thing to do,” Jordan explains. “Essentially it came down to one day me saying, ‘I really want us to have a hoppy beer.’ I go to Belgium every year and, coincidentally, it was really about the same time we started seeing hoppier beers in Belgium.” 

While hoppiness is a leading flavor trend among craft brewers, one could say a growing packaging trend is canning. About a decade ago another Colorado brewer, Oskar Blues, went toe-to-toe with one of the great taboos of the craft world and started putting its beers in cans. Today, the number of its peers getting into the canning game approaches 100. Among them is New Belgium, which started canning Fat Tire about three years ago. It subsequently added Ranger IPA and Sunshine Wheat to the can mix. This past summer it broke ground on a new can line addition to its packaging hall, which will sextuple its canning capacity. The expansion is a 16,000-square-foot vote of confidence in the notion that the craft beer in cans movement has definite legs.   

 

Into the Blue

Two decades and 28 states (and one Nation’s Capital) later, one could argue that the brewery that was born in a residential basement now occupies a space somewhere between regional and national player (though its official designation is regional). Where, in that continuum, does Jordan see it? “How I see us in that regard is probably not as important as how beer drinkers and the industry see us,” she muses. “We’re heading toward being a national brand. Are we now? No, which is a great place to be—because we have some great blue sky in front of us.”  

 
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