Jim Koch Interview

A
pioneer of the
craft brewing movement, Koch transformed a small business
operation into one of the largest breweries in America. His
story is firmly ensconced in beer lore: the recipe for Sam
Adams in his attic, six generations of brewmasters in his
family and humble origins peddling beer bar to bar in a
briefcase. From this lore has grown a company that sold 1.2
million barrels of product in 2OO3 and accounted for more
than $2OO million in sales.

Despite all of
its successes, Boston Beer faces an uncertain future. The
beer industry is a difficult, fluid place, made even more
treacherous with round after round of consolidations and
mergers. Growth across the industry has been flat in recent
years and even the craft brewing sector is hard pressed to
produce the numbers it enjoyed in the past.

Like an awkward
teenager struggling to reconcile adolescence and adulthood,
Boston Beer finds itself in a unique position in the beer
industry. Although it is the sixth largest brewing company
in America, Boston Beer is neither a big or small brewery.
Samuel Adams is a national brand, but without the full
benefits of scale and pull distributors accord to the Big
Three. Boston Beer also remains a craft brewery, but one
that is too rarely granted the status and respect handed to
smaller producers.

It’s not easy
being one of a kind. Samuel Adams Lager has no true peer in
the beer business. It is a national craft beer brand with no
real footing in any one particular market. Its distribution
is wide, but not as deep as other up-and-coming craft
brands, such as New Belgium Fat Tire, Sierra Nevada Pale
Ale, and Yuengling Lager. With this in mind, Jim Koch looks
at the future of his Sam Adams brand and still forecasts
success.

I recently
traveled to the pilot brewery in Jamaica Plain to meet with
Koch and discuss the future of Sam Adams. During our
interview, Koch spoke about the importance of freshness
dating, pushing hop levels to the edge of solubility, and
whether the wine world has anything to teach those in the
craft beer community.

ANDY
CROUCH What does
the term ‘craft beer’ mean?
JIM
KOCH There is
actually a definition. It is small, independent and
traditional. Small meaning it is under two million barrels,
independent meaning not owned by a big brewery, and
traditional meaning you only use traditional brewing
processes. No non-traditional adjuncts, no high gravity
brewing and so forth.

AC
Kim Jordan suggested that the craft beer market could reach
ten percent. Is that possible?
JK
I told the NBWA in 199O that within twenty years, better
beers would be twenty to thirty percent of the industry and
that craft beers would be at least a third of that. The
quick answer is, absolutely. Today small, independent,
American brewers are making some of the best beer in the
world. I am a big believer that people drink the quality of
the beer. They don’t drink the marketing. They don’t drink
the promotion. They drink the beer. I believe it is
incumbent on us as brewers to continue to make world class
beers that are a pleasure to drink and create a variety of
flavors and tastes. I believe the same forces that are
driving the renewed interest in wine and spirits are also
going to drive increased growth in craft beers. We’re
bringing the same thing to the consumers. We’re bringing
quality, beers with more flavor, interesting flavors and
styles, and we’re bringing beers that have interesting
stories with them. It’s a trade up – people are trading up.
That is what is driving wine and spirits, I think, consumer
interest in different tastes, styles, histories, and
quality. The things that are growing in wine and spirits are
all in the high end. The benchmark that I think is relevant
here is that with wine and spirits, the high end is about
thirty percent of the volume. Better wines and better
spirits are about thirty percent of the volume and are
growing five to six percent per year. With better beer, the
high end is around 15 percent. So, yes, I believe there is
upside to double.

AC
Are there lessons to be learned from the wine industry, such
as with Gallo Wines moving from the image of jug wine to
becoming a top producer of premium wines?
JK
I’m not that familiar with wine, but having met Gina Gallo,
she is very dynamic and charismatic. I think it goes back to
people want things with personality and an individual behind
them. Beer doesn’t need to follow anybody. We don’t need to
be more like them. We need to be more like us. You go back
to the history of beer, it’s been about flavor. It was the
beverage of moderation that people would drink for the
flavor and taste. It wasn’t alcoholic soda pop. I think what
we need to do as brewers is first make high quality beer.
Second, there is a challenge that the craft beer industry
needs to step up to. There is still a lot of stale beer
being offered to consumers. The majority of craft brewers to
this day do not have consumer-legible freshness coding. With
most craft beers, you can’t tell if you’re getting a stale,
bad beer. Craft brewers have to take responsibility for
their beer all the way to the consumer. We started doing it
in 1987 or 1988 and in 15 years, we still haven’t had very
many people follow. That’s one of the things that hold the
industry back; people unexpectedly pay good money for craft
beer and get stale beer that you or I wouldn’t drink. The
same is true with draft beer. We sell a lot of our beer on
draft and we need to make sure that it is fresh when it
comes out of the tap, no matter what it takes to do that. We
don’t put any weird Julian dates or anything. It says right
on the keg how long it’s fresh so that anyone who reads
English can see it.In contrast to wine, we have to take care
of our beer all the way to the consumer. The big brewers,
Bud, Miller and Coors, have done a better job than the
majority of the craft brewers. I think that’s something we
have to step up to.

AC
What is the importance of experimentation for Sam Adams?
JK
The unique thing about Sam Adams is that we have eight
brewmasters and two brewing labs that are dedicated not to
making the beer cheaper or more popular, but rather to
making beer more interesting and better. There is no other
brewer that has that much dedication to making interesting
beers and pushing the envelope of beers. To me, that’s what
we’re all about. It’s not like it’s profitable or that we’re
making tons of money out of it. We probably lose money on
those things. But, the essence of the company is a passion
for great beer. As brewers, we’re always trying to do new
things.

AC
Tell me about the Imperial Pilsner project.
JK
We want to see what happens when you reach whatever the
physical limits of solubility are. But, to me, just putting
a bunch of [bitterness units] in it is like making
really spicy food. Anybody can dump Scotch Bonnet Peppers
and napalm and Chernobyl waste into something and make it
really hot. The issue is making it extreme and
wonderful.It’s not about just creating alcohol. It’s about
creating an entirely new and wonderful alcoholic beverage.
To get huge [bitterness units] in beer is pretty
cool, but only if it makes it taste really great. It’s my
belief that you push that with ordinary hops and you get way
too much harshness – bad tongue coating. What we’re trying
to find out is if you use really great hops, which
unfortunately are low alpha. You’re dealing with fours
rather than 14s so it’s a little more difficult. But that’s
the kind of thing we can do. We can get the best hops in the
world. We can take a year to figure out how to use them. We
have trained brewers who have scientific backgrounds. And we
have this passion for making really cool beers.

AC
Discuss the differences between the approaches of Yuengling,
which has confined its growth to the East Coast, and Boston
Beer as a national brand.
JK
I think Yuengling has done a fantastic job with a strategy
that a lot of people told them was crazy. They’ve been very
successful taking their own path, which is competing with
the mass domestic beers with a darker and more flavorful
beer. They have a huge market share in eastern Pennsylvania.
They may have market share there that is competitive with
Budweiser, which is an extraordinary accomplishment. Even
here in New England, we don’t compete with Budweiser. They
are 25 or 5O times our size, so we’re still very small. But
Yuengling has found a way to get an enormous volume by
bringing the mass domestic drinkers into something that is a
little more flavorful. I admire [Dick Yuengling’s]
refusal to listen to everybody who told him he was wrong. A
lot of people told me I was wrong when I started. I know
what it’s like to have people tell you you’re doing it the
wrong way because it’s unconventional.

AC
What are the challenges that are unique to being a national
brand?
JK
We we’re successful because we expanded very slowly. It took
ten years from when I started in Boston until we were
national. One of the challenges is to have the patience to
do it slowly and correctly.

AC
What are trends for the light product?
JK
It has followed the curve of a successful new product
introduction. It came in and took off and got a lot of
distribution and trial and then found a stable and
successful level of volume. It is alongside Amstel Light as
one of the two high end light beers that have been
successful. Sam Adams and Amstel Light are the ones that are
still around.

AC
Has there been any cannibalization of the lager?
JK
A little but not that much. It might be the same drinker but
it’s a different occasion.

AC
Is there a glass ceiling for nationally distributed craft
beers?
JK
I don’t think so. We’ve just had the biggest year we’ve ever
had. Twenty years later we’re still getting more and more
people drinking Sam Adams. So I don’t think so.

AC
What about the seventh generation of Kochs?
JK
I have four children. I have the same feeling about it that
my dad did. ‘Jim, it’s your life. Do what you want. The fact
that this is a 15O year old tradition, and six generations
that will die with you [laughs]. Don’t worry about
it.’ That’s essentially the same with my kids. It’s their
life and the fact that they are the inheritors of one of the
longest brewing traditions in the United States should not
be a burden to them. If it’s an opportunity, that’s
great.

AC
What does the lager taste like to you?
JK
[Closing his eyes]. I get the classic progression of
body, then sweetness of the malt, then spiciness, then
bitterness of the hops. I get beautiful balance between the
two, where one does not overwhelm the other. I get this nice
complexity – I get body, structure and mouthfeel that come
from leaving some quasi-fermentable sugars in the beer.
That’s what the decoction mash basically does. I get some
caramel note, a drop of sweetness. Then I get a very complex
hop character. I get citrus, grapefruit, very slight spruce.
I get that beautiful, indescribable, what brewers call
‘noble hop’ character. I get elements of all of
those.