A 'dumb' idea that paid off

The company Jim Koch started 12 years ago by taking his Samuel Adams beer around US bars now has a market capitalisation of $400m and is heading for a British invasion

Some of my first pets were yeasts. I must have been five. They looked like tan globules in a milky solution. I would feed them maltose. When you drop it in they appear to rise up to get it. Actually it's the action of the surface tension but when I was five I thought it was pretty cool.

The reason I had yeasts for pets is that my father was a brew master. He worked for a series of small breweries in Ohio that, one by one, went bankrupt. They were trying to compete with the big names of the American beer industry - Coors and Bud and Miller - which control 90 per cent of the market here.

I'm the sixth generation in my family to become a brew master. The last member of my family to own his own business was my great-great-grandfather. He bought his business about 150 years ago and called it the Louis Koch Brewery, which wasn't very imaginative. He and later his wife ran it until the end of the 19th century.

It was almost inevitable that I should go into the business, but I fought it at first. I became a manufacturing consultant specialising in quality control, instead. In 1978 I joined the Boston Consulting Group, which drew its clients from the Fortune 500 companies.

It was a combination of family history and a conviction that Americans were ready for great American beer that persuaded me to go into business for myself at the age of 35. But it meant giving up a good job earning $250,000 a year. My father, when I told him I wanted to leave the consultancy, looked at me and said: "Jim, that's the dumbest thing I've ever heard."

But unlike the breweries he used to work for, I had no intention of competing with the huge brewers. I was going to do something unique and small. Americans have always been able to buy good imported beer, but by the time it gets here it's stale. And they've had consistent, inexpensive lager from the major breweries. The difference between what they produce and what I make is, I think, like the difference between water and wine.

The recipe for Samuel Adams was handed down from my great-great-grandfather. It has about six times the hops, much more malt, no adjuncts to lighten it up and no preservatives. The closest thing you'd have to it in Britain would probably be Pilsner Urquel, although Samuel Adams is darker and a little creamier. My father had tried to brew it in the 1950s but the owner said people would never drink it because they wanted water with foam on top.

Financially, we never had any problems. I put $100,000 of my own money into it, and raised another $140,000 from my family, friends and clients. It took all of a weekend. When I told people I was putting my own money into it they were confident it would either be a success or they'd get a lot of free beer out of it at the end.

I started the Boston Beer Company on a microscopic scale in 1984. The whole company was two people, myself and my secretary from the consultancy. I took the recipe and ingredients to a brewery in Pennsylvania and asked them to make me a batch. I removed the papers from my briefcase and packed it with six bottles and a couple of blue cold packs and went from bar to bar in Boston.

I remember a bartender at one of the first bars I went to in the trendy south end of Boston telling me he liked my beer, but that he couldn't sell it. "My customers drink the advertising," he said. Two months later he called me back and said his customers were asking for Samuel Adams. By that time we'd already won our first prize. The Great American Beer Festival in Denver chose Samuel Adams as the country's best beer from more than 100 entries when we were just six weeks old.

I own a small brewery in Boston, but the rest is made under licence at other breweries across the US. We do own a lot of capital equipment which we have installed there to make my recipe. Last fall we had an initial public offering that raised $75m. We altered the labels on our six packs to include a share offer so that our customers could take part. Since 1984 we've grown by 30 to 60 per cent a year. And the market for craft brewing has grown just as fast - it now accounts for 2.5 per cent of the total. There are quite a few companies copying us.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm today
News
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
News
Billie Whitelaw was best known for her close collaboration with playwright Samuel Beckett, here performing in a Beckett Trilogy at The Riverside Studios, Hammersmith
people'Omen' star was best known for stage work with Samuel Beckett
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'