Last week I posted a note on Boston Beer Company (brewer of Sam Adams beer, among other brands) and its founder Jim Koch.
Here's an excerpt from what I wrote:
I remember when Koch started the company in 1984. His father and
grandfather had both been master brewers. He started his career with the
Boston Consulting Group, but soon saw an opportunity in manufacturing a
more flavorful ale in the European tradition. He originally brewed his
beer in Pittsburgh, but eventually moved operations back to New
Koch went from bar to bar in the Boston area, trying to convince owners
to carry his product. One of his biggest challenges, as you might
expect, was avoiding becoming inebriated, and not gaining weight.
The rest, as they say, is history. Sam Adams is the largest craft beer
in its category, even though it only has a 1% market share of the U.S.
Yesterday was not the first time that I have seen Koch's presentation, but I always enjoy hearing his updates....
But don't believe for a minute that he is not one smart businessman. He
may stand at the podium sipping a beer and sounding like he is holding
court at the local bar, but his stock (and his personal fortune) have
been home runs:
But I did make factual error in my blog post. I said that Koch's original investment had turned into a $500 million net worth.
Turns out that Koch is actually a billionaire, according to various media reports. Here's an excerpt from a story from yesterday's Bloomberg:
Armed with a family recipe and a flair for marketing, C. James “Jim”
Koch popularized craft beer in the U.S. and turned Boston Beer Co. into
the third-largest American-owned brewery. It also made him a
billionaire, as sales of his flagship Samuel Adams brand helped Boston
Beer shares double in the past year and reach a record high Friday.
Craft beer such as Sam Adams has been a bright spot in an otherwise
stale U.S. beer market. Total American beer sales fell 2 percent in the
first half of 2013, according to data compiled by Bloomberg, while the
craft brew segment grew 15 percent. Boston Beer’s sales increased more
than 17 percent during the period.
“What he has done is amazing,” said David Geary, president of D.L. Geary Brewing, a craft brewer in Portland, Maine, he co-founded in 1983. “He’s very focused, a brilliant marketer and he sort of taught us all how to sell beer.”
There's lots to like about Koch's story. It would have been easy enough for him to stay in the consulting world, pulling down a fat paycheck for telling other businesses how to run their companies.
Instead, he followed his passion, and became a brewmaster. Money has never been the sole motivator. Here's a quote from the Boston Globe:
"The big guys make extraordinary amounts of beer that is clean,
consistent, and inexpensive," Koch told me earlier this year. "I can't
do that as well. I can't make Coors Light as well as Coors makes it. And
their beers are perfectly designed to satisfy 90-something percent of
the market. I've always known since the day I started that I was making
beer for five percent of the market, maybe now it's up to 10 percent.
"If I try to compete with the big guys, they'll kill me."
It is traditional that commencement speeches tell graduates to "follow your dreams" and take a chance to do something you love.
In the case of Jim Koch, this proved to be a pretty good decision.