The Audacity of Hops

by Tom Acitelli

  BECAUSE WINE MAKING TAKES TOO LONG

  Belmont, CA | 1985

  Pete Slosberg had a twelve-week paid vacation coming up in 1985. He had been working since he was sixteen and had been logging particularly long hours at his current company, ROLM, which made computerized telephone systems for businesses and which had recently been acquired by IBM, and before that at Xerox. The latter company had saved him from the bleak weather of Rochester, New York, by transferring him to the San Francisco Bay Area in the late 1970s (and it had a policy of twelve weeks’ paid vacation every seven years of employment). Up to that point, Slosberg had been a northeasterner. He grew up in Norwich, Connecticut, and studied engineering and business at Columbia University, earning a BS in 1972 and an MBA in 1974, taking odd jobs along the way, including brief work during graveyard shifts as a New York City cab driver. (The first part of the medical exam? Roll up your sleeve so they could check for needle marks.) His first job out of school was in Xerox’s Rochester office.

  By that time, Slosberg had developed a bit of a palate for wine through Amy, his girlfriend-turned-wife. The beer he had had in college turned him off to the taste, and the most popular brand in Rochester was Genesee. Slosberg marveled at the fervency with which Upstate New Yorkers bought up cases of the regional brewery’s spring beer, Genny Bock, believed (erroneously) to be made from the built-up crud inside the regular tanks. He found Genesee’s flagship cream ale to be faintly sweet; that was pleasant enough. Otherwise, beer just did not do it for him. Wine did. He and his wife would make it a point to sample local wineries; and after the move to California, Slosberg had a go at wine making in the basement of their house in Belmont, about twenty-five miles south of San Francisco. Through Wine and the People, a wine-making and homebrewing shop in Berkeley, he bought two hundred pounds of cabernet grapes from a Napa Valley winery, and then ritualistically hand-squeezed them using cheesecloth. He added the yeast; he studied the fermentation; he siphoned the finished product into glass carboys for maturation; he looked at the calendar. Because this was a cabernet, it might take as long five to ten years to age before drinking. Wine making would not work as a hobby. He called Wine and the People and recounted his impatience. The guy on the line suggested white wine—it would only take one or two years to age.

  No.

  Then how about homebrewing? “Have you ever had a homebrewed beer?”

  “I have not,” Slosberg said.

  “If you haven’t had a homebrew, then you haven’t had real beer!”

  That did it. Slosberg bought a basic twenty-dollar kit and brewed an amber ale using malt extract and hops. The result was edifying and illuminating:

  Six weeks later, I opened up a bottle, a couple of weeks before I was supposed to, but I couldn’t wait any longer. The amber liquid developed a glorious head as I carefully poured it into a pint glass, and the aroma was actually quite inviting. The first taste surprised me because it didn’t taste like anything I had ever had before. Sure it was odd, but the oddness evolved into a realization that this stuff did taste good. Maybe I hadn’t had all that many different kinds of beer in my life, but this beer was far superior to anything I had ever tasted. I knew, then and there, that I was going to become a beer lover. Twenty-nine years old, and I finally became a beer drinker.

  The malt taste in the amber ale took Slosberg back to childhood milkshakes on the Connecticut shore. It also spawned an obsessive beer can collection and the seemingly inevitable march toward a commercial brewery. Slosberg moved in the circles of what was fast becoming the late twentieth century’s most storied and lucrative industry: computers. He knew people through ROLM and IBM, and through what for a few years now had been called Silicon Valley, with vast financial resources as well as oftentimes vaster skill sets. It was not an assemblage of bearded back-to-the-earth types (though Slosberg had stopped shaving after he cut himself badly on his wedding day and would sprout a black beard forevermore); it was instead a breeding ground for entrepreneurship. Like Jim Koch a continent away, whom he would compete with in the coming decade to be America’s biggest craft brewer, Slosberg was an Ivy League MBA with an interest in homebrewing, not a tinkerer by trade like Jack McAuliffe, Ken Grossman, and others in the early waves of the movement. As his twelve-week vacation approached in 1985, Slosberg had a feeling something in his life was about to change.

  MORE THAN IN EUROPE

  Boston; Kalamazoo, MI | 1983-1986

  It was the morning after St. Patrick’s Day in 1985, and Rhonda Kallman was a little hungover. Jim Koch, a boss at the Boston Consulting Group and now her business partner, had an assignment for her nonetheless: buy a computer. Every reputable business surely needed these desktop devices, and their company should be no exception. Kallman, who had no idea where to start, set about her task.

  Later that day, Koch got a phone call. It was his mother’s cousin, whom Koch considered an uncle and who was a partner at Goldman Sachs in New York and one of Boston Beer’s investors. “So, what did you do today?” he asked.

  Koch replied that he had started the search for a computer.

  “Why?”

  To keep track of things like sales and payables—all the miscellany of a business.

  “Oh yeah,” Koch’s uncle said. “Sales. By the way, have you got any?”

  No.

  “So what the hell are you doing buying a computer? You know, Jim, I’ve seen a lot more businesses go broke because they didn’t have enough sales than I’ve seen go under from lack of computers. Why don’t you work on first things first?”

  That jarred Koch. Why was he looking for a computer? The company didn’t even have an office! He and Kallman had spent much of 1984 and now early 1985 working around their schedules at BCG, and now were working out of their respective homes. No, his uncle was right: They needed some accounts. The first five batches of their signature lager were aging in tanks in Pittsburgh, set for delivery in five weeks. What then?

  Koch was most certainly no natural salesman. There were two big reasons for this. One was Harvard. His business education there had focused heavily on marketing to the exclusion of sales—who got an MBA to be a salesman? It was an abstraction at best to Koch and his fellow grad students, something that just sort of happened at a company after the marketing team got done targeting the product. At worst, salesmanship was seen as a grimy, grubby thing you did as a last resort in the business world. He had lived professionally within this mindset during his six years as a management consultant. The work he pursued for his manufacturing clients at BCG kept him, as one later profiler put it, “by choice and by assignment … as far away from actual customers as a Douglas fir tree is from a New York Times reader. Selling was something he did his ‘best to avoid.’” That wouldn’t do. Not when he was out on an entrepreneurial limb.

  Koch called Kallman back. Scratch the computer—we need a list of potential accounts instead.

  Such had been the learning curve for the Boston Beer Company, which filed with Massachusetts in December 1984 but had been going as a two-person operation for at least a year before then. Kallman was a secretary at the Boston Consulting Group, working for seven different consultants, including Koch. A bartender by night and on weekends, Kallman was a native of Lynn, Massachusetts, and was raised in Peabody. With a ready smile framed by blond hair, she was an extrovert—as natural a salesperson as Koch was not. When he was starting the company and hunting for investors, including among the verdant financial fields of BCG on the upper floors of One Boston Place, a gleaming skyscraper that counted law firms and private-equity groups as other tenants, someone suggested Kallman as a partner. Barely into her twenties, she turned down the opportunity to help start BCG’s New York office to work with Koch on this door-to-door beer-selling concern.

  The beer itself sprung from Koch’s earlier epiphany: he would make the freshest glass of beer the American consumer could get, and he would do it over and over. He turned, like Matthew Reich at New Amsterdam before him, to Joseph Owade
s. Koch’s father, Charles, had known Owades when he worked as a brewer, and Owades happened to live in the Boston area at the time. The two hammered out a deal, with Owades getting 2 percent of the company as compensation, and then set about crafting a late-twentieth-century equivalent of a Koch family lager recipe from the mid-nineteenth. Much as Charles Koch served as business mentor to his son, Owades served as brewing mentor—and he had a willing and eager protégé.

  Jim Koch not only homebrewed but also connected by phone with commercial brewers like the Boulder Brewing Company and Wm. S. Newman, where he apprenticed for two weeks. The apprenticeship reaffirmed his hunch: for all its pioneering, Newman, like most of the early craft breweries, struggled with quality control. Dust from the different grains drifted across the downtown Albany warehouse space, settling in beers where it wasn’t called for in the recipe. Bacteria was a constant foe. The beer could be inconsistent, the best on the East Coast one batch, cloudily unappetizing the next. Koch knew if he could make the same high-quality beer time and again, he would have an advantage over other small-scale brewers (he was not even thinking of competing with Big Beer directly; they could have their business model). To gain that advantage, he brought on Owades. (Newman would file for Chapter 11 in August 1987, under crushing debt tied to a bottling deal that went wrong. F. X. Matt continued brewing the brand for a while, and Newman’s Albany space, which had housed the first brewery in the New York State capital in sixty-five years, became a Bruegger’s Bagels factory.)

  Koch and Owades picked for his contract brewing the Pittsburgh Brewing Company, a regional founded in the 1860s by German immigrants. It would prove a fateful decision affecting the entire industry. For the time, it seemed a superb choice—the Boston Beer Company’s signature brand produced there eventually started to sell itself.

  First, though, Koch and Kallman were selling it bit by bit, beginning with the local bar and restaurant list they made the day after Koch’s phone call with his uncle. They figured they would need thirty accounts to make the business work initially. Thirty accounts—it didn’t seem like much. One day shortly after they made the list and while Kallman was visiting her brother in California, Koch rolled reluctantly out of bed in Newton, the call with his uncle in the back of his mind, and put on his weekday uniform: a dark pinstripe suit. He would face his fear head-on: he would do his first solo cold call. He had bought Tom Hopkins’s salesmanship how-to book, How to Master the Art of Selling, at the Harvard Coop across the street from his alma mater and committed a sales pitch to memory. Koch’s mind clanged with doubt during the long elevator ride down from his cushy office with its magisterial views of Boston Harbor, through the skyscraper’s polished, sunny lobby, and out onto Washington Street, where people had a million places to be and none of them a brewery. Why was he doing this? What was the point? The failure rate—the failure rate was so high! He wasn’t a natural salesman!

  Koch couldn’t find any bars on Washington. He took his first right—you always turned right—and there, down State Street, he found a bar. It would have to do. The Dockside Restaurant and Bar sat amid the Faneuil Hall Marketplace, a Boston nightlife and shopping district that had been revamped to much success the decade before. Koch walked into the Dockside before 11:30—he knew restaurants and bars did not want to have to deal with a sales pitch during lunchtime. He was carrying his briefcase full of ice packs and lager test-batch bottles with black-and-white labels that said “Sample Beer.” He also had with him a couple of early articles from the media to paint his venture with some legitimacy. The bar was empty except for one man behind the railing. Koch began reciting his memorized pitch to the man, who said nothing in return. Remembering a lesson of the salesmanship book, Koch started asking questions—you were supposed to keep the conversation going. Still no answer; urban quietude was the only noise coming from the street. He thought of his office back at BCG. Then another man stepped from the shadows. He was the manager, and he wanted to know what this besuited fellow was doing fast-talking up his staff. Koch started his pitch over: “Hi, I’m Jim Koch. I’m starting this new brewery, and I have a new beer, and it’s called Samuel Adams Boston Lager. Have you heard of it?” He poured some for the manager, who took it, held it to the light, tasted it, and promptly ordered twenty-five cases.

  Koch was elated. Back at the office, he called Kallman in California. “I sold an order for twenty-five cases!” he said. “But I told the guy I couldn’t deliver him twenty-five cases, so he’s going to take five and we’ll take it from there!”

  The Boston Beer Company had its first account. Bit by bit, Koch and Kallman, eventually full-time yet without an office, sold their way toward the magic number of thirty. Both dressed smartly—they were occasionally mistaken for IRS or board of health agents. Lugging the ice-packed samples—in Kallman’s case, within an oversized Lancôme bag she’d earned—they hit prospect after prospect, sweetening any pitch with the offer to return for free and educate the bar or restaurant’s staff about the beer they would be pouring. The pouring was the big thing. Koch and Kallman knew that if they could get the beer in the glass in front of a manager or an owner, they could get the account. That sometimes took two, three, four visits, but the pour worked like a charm.

  The flagship brand, Samuel Adams Boston Lager, was, as one contemporary in the craft beer industry put it, “a clean, clean beer. It was gorgeous. [Koch] put it out there: nice color, good head. All of a sudden, it was like, ‘Oh that’s good draft beer.’” For Koch, the lightbulb was the control behind that quality. That Samuel Adams Boston Lager was so clean and therefore appealing to a general consumer audience was no accident; it was something Koch, ever the consultant as much as the brewer, sought so as to distinguish his product from the rest of the slowly growing market. Incidents of infections—the brewing process was a five-star hotel for bacteria—had hit other craft breweries, had even helped drive some out of business, like Charles and Nancy Coury’s Cartwright Portland, or very near it, like Boulder Brewing (which Koch had visited while planning Boston Beer).

  Plus, most craft beers in the United States at the time were ales, which could be cloudier than lagers, with the sort of yeast sediment at the bottom that Tom de Bakker had sought to warn drinkers about on his labels. The cloudiness did not mean the ales were bad or off, just that they were a different creature than their more slowly, more coolly fermented brethren. To an American beer consumer in the mid-1980s, however, when more than eight in ten beers sold were an exactingly clear shade of yellow that would not tolerate even the faintest gossamer of wavy sediment, Samuel Adams Boston Lager was a masterstroke of presentation. It didn’t hurt that it tasted good: malty and slightly sweet on the finish, with a crisp bitterness throughout. Koch, with the help of Joseph Owades, had crafted an archetypal beer from his ancestor’s recipe, what Michael Jackson would declare “an American classic.”*

  And Koch had crafted a seemingly airtight brand to back it. The goofy eighteenth-century man on the label, designed by Boston ad firm Gearon Hoffman, was the culmination of careful research; Koch showed mocked-up labels to bar patrons, to fellow business travelers on airplanes, to potential investors like his uncle at Goldman Sachs, to just about anyone who would give constructive feedback. He went with “Samuel Adams” over other contenders, like “New World,” because it connected on some level with consumers. Koch knew of Jack McAuliffe’s defunct effort, New Albion, though he was not aware of that pioneer’s formula for a beer label and name: history plus location can equal authenticity in a drinker’s mind, and if you don’t legitimately have the former, “you can just make it up.” Koch had both history and location in the Samuel Adams Boston Lager label. “The Boston Beer Company” splashed across the top; the city, redolent as it was of all things Revolutionary in the mind of any American who had passed through grade school, again in the beer’s very name; the chisel-chinned patriot smiling knowingly just below, hoisting a frothy tankard of history and cheer. Brewer. Patriot. Clear and clean. Tasty. What wa
sn’t to like? Even if it did cost twenty-five cents more than a bottle of Heineken.

  Koch and Kallman delivered the bottles—they couldn’t afford to do draft—themselves, having not been able to find a distributor willing to take Boston Beer on. Kallman drove an orange Chevy Vega with a white interior, Koch a yellow Plymouth Reliant station wagon that his kids took to calling the “Beer Mobile” (a rented truck came later, after the magic thirty accounts, and more, provided some revenue). Early promotional materials turned on Kallman’s homemade signs—eleven-by-fourteen- or sixteen-by-twenty-inch poster board with six beer labels each, red tape around the edges as a frame, and the name of the establishment followed by the tag, “Proudly serves Samuel Adams Boston Lager.” Here, too, they soon graduated to real tabletop umbrellas, menu boards, even sixty-second radio spots featuring Koch’s gravelly baritone talking about the qualities of the beer, a complete refutation of the typical beer spot with its ex-jocks and bikini models. As for the sales and payables that post-St. Patrick’s Day computer was supposed to handle, labeled shoeboxes on Koch’s kitchen table sufficed for the time being.

  Samuel Adams Boston Lager was one of the very few of that type in the craft beer movement (Jim Schlueter’s River City in Sacramento had been the first craft brewery to focus on lagers). The overwhelming majority remained ales—porters, stouts, pales, IPAs, seasonals like Anchor’s Christmas ale, even some wheat ales, a specialty of Widmer Brothers in Portland, Oregon. Ales could be easier to make. The yeasts were heartier and could ferment at higher temperatures; that saved craft brewers the trouble and expense of keeping a fermentation kettle cool for days and sometimes weeks.