Beer Baron

By Hyatt, Josh | Newsweek, May 31, 2010 | Go to article overview
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Beer Baron

Hyatt, Josh, Newsweek

Byline: Josh Hyatt

How the founder of Sam Adams bottled lightning.

Jim Koch loves to talk about little companies that take on the Big Guys: artisanal-cheese makers who battle importers, the microdistillers who taunt liquor giants--and, most of all, the tiny microbrewer who elbows aside industry behemoths with a full-flavored beer and a well-crafted marketing pitch.

That last one is Koch himself, of course. When he launched Samuel Adams Boston Lager in 1984, there were fewer than 10 microbreweries in the U.S. Store shelves were dominated by bland beers made by Miller Brewing Co. and Anheuser-Busch. By last year the number of microbreweries (companies that make fewer than 2 million barrels a year) reached 1,500, according to the Brewers Association, accounting for about 4.3 percent of total sales. And while Sam Adams may not have been the first craft brew out there ("Apple wasn't the first company to produce a PC, either," says Koch), it is the most successful. Sales reached $415 million in 2009, making it the country's largest craft brewery. "Jim Koch was the one who led the revolution for all of the other entrepreneurs who wanted to create beers," says Gerry Hills, professor of entrepreneurship at Bradley University.

Koch (pronounced "cook") was working at the Boston Consulting Group when he began brewing suds in his kitchen. He had received three degrees from Harvard (B.A., M.B.A., J.D.), but brewing was in his blood. His father and grandfather were in the business; Koch used a recipe from his great-great-grandfather. Before long, he scraped together $240,000 and launched the company. Although he named his beer after a Boston patriot, he made it at a big brewery in Pittsburgh, which allowed him to control quality better than most small brewers. "The idea of a high-quality American beer had become a complete oxymoron," says Koch. "Coming from a brewing family, I knew that wasn't true."

He originally sold beer in unlabeled bottles from his briefcase, kept cold with a chill pack.

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