Posted: December 01, 2008
2008 CEO of the Year
New Belgium's Kim Jordan: Tapping a collective energy
By Mike Taylor
(New Belgium Brewery CEO Kim Jordan. Photos by Mark Manger)
Back in 1991, Kim Jordan and Jeff Lebesch hiked into Rocky Mountain National Park with a jug of Jeff’s basement home brew and penned a mission statement for the business they were about to launch: "To operate a profitable brewery which makes our love and talent manifest."
All three of those elements - love, talent and profitability - abound today at New Belgium Brewing Co., which helped launch the craft-beer craze in the early ’90s with the now-ubiquitous Fat Tire beer and a steady unveiling of brews that now number 13, including limited-release and seasonal beers.
The enterprise that began in the couple’s Fort Collins basement has become the nation’s third-largest craft brewing company and eighth-largest brewer overall with sales of $96 million last year and a projected 8 percent revenue increase in 2008.
But beer sales are only part of what distinguishes New Belgium. Listening to the CEO Jordan, revenues seem almost a means to an end - that end being what Jordan describes as "an incredible engine of good will and shared vision."
Propelled by the 3Rs - reduce, reuse, recycle - the company embraced sustainability long before it became a mantra of business; employees voted to make New Belgium the first 100 percent wind-energy brewery in 1998, even if it meant the cost difference being taken out of their yearly bonuses.
And then there’s the brewery’s onsite water treatment plant in which wastewater is run through an anaerobic digester where nutrients are collected, turned into methane and converted to electrical and thermal energy.
"Up to 20 percent of our electrical energy needs are produced that way," Jordan says. "The thing that’s elegant about that particular process is that you’re closing a waste loop and turning it into another useful product."
But Jordan is perhaps more passionate about the small, personal measures of sustainability. "Everyone likes to talk about new technology, but it’s really important to also harvest the low-hanging fruit of conservation," she says. "And that’s something we’ve always done here at New Belgium."
The brewery is also fairly renowned for hanging on to employees, with a 92 percent retention rate. "We care deeply about one another, and we also care deeply about being very good at what we do," says Jordan, this magazine’s 2008 CEO of the Year.
At their one-year anniversary, employees begin earning stock ownership in the company. They’re also given their own cruiser bicycle, much like the water-color rendering on the Fat Tire label and a nudge to encourage biking to work.
Jordan was a social worker and Lebesch, her husband, was an electrical engineer before launching New Belgium. The two met at a party hosted by a mutual friend and married in September 1990. They were selling beer by June the next year.
"I think Jeff was probably cooking on that idea before we even met," says Jordan, 50, who is described in company literature as "New Belgium’s first bottler, sales rep, distributor, marketer and financial planner."
In the early years that meant putting their two young sons, Zack and Nick, now 23 and 16 respectively, to bed at night and going to Kinko’s to run off color copies of marketing materials. The Fat Tire label was the watercolor handiwork of neighbor Anne Fitch and is still used 17 years later.
Before New Belgium, one of Jordan’s roles as a social worker was with a program in Larimer County called Project Self-Sufficiency, which she describes as "working with low-income single parents to help them get an education and figure out how to get child care they could afford - all those things that a person needs to be able to be self-sufficient."
Personal empowerment is evident at New Belgium. The brewery’s financials, business strategies and branding plans are shared with employees, who now number 320. Jordan says social work also taught her to "look at a system rather than focus on only one area, and see the interrelationship between things."
Jordan grew up in Maryland and attended a Quaker higher school, a background she says has played a role in the way she runs New Belgium. She cites George Fox, one of the founders of Quakerism in America. "One of his quotes was, ‘Let your life speak,’" Jordan says. "I come from a fairly liberal family, and so for me the notion that people share and pool their labor to build equity and that there should be some recognition for that - that comes to me naturally."
One reason for New Belgium’s ascent as a craft brewer is that its emphasis on environmental stewardship resonates with craft-beer drinkers, says Paul Gatza, director of the Boulder-based Brewers Association, a trade group for beer makers.
"They’ve integrated Kim and Jeff’s personal moral code almost," Gatza says. "Long before sustainable business practices became popular, they were doing things like wind power and re-using energy whenever they could. They’ve been on the cutting edge of this stuff for years. I think their whole branding imagery of the fat-tire bicycle and alternative transportation has also played into it. Those are things that people who like craft beer want to associate with. They want to associate with being good to the environment and being active."
Gatza also says New Belgium’s open-book management style and involving employees in high-level decision making has enabled them to attract and retain top talent, like Belgian brew master Peter Bouckaert, who came from the famed Rodenbach brewery in Belgium 12 years ago.
Then, of course, there’s the beer, starting in the early 1990s with Fat Tire, which Gatza recalls "had gotten quite a good reputation, and for bars to get that on tap was really a coup for them. Some of the beer enthusiasts I used to hang around with, we’d go to specific bars based on whether they had Fat Tire. There was really nothing else quite like it in the marketplace."
The past year was a challenging one for craft brewers. While sales continued to climb for the segment industry-wide - by about 11 percent in terms of revenue and 6 percent in beer volume, according to Gatza - brewers were hit by skyrocketing prices for raw materials, namely barley and hops, due to shortages brought about by unfavorable growing conditions and a government-propelled emphasis on growing corn for ethanol. According to Gatza, this has prompted farmers to rely more on barley and oats as livestock feed. High energy prices also have made it more expensive for brewers to transport their products.
New Belgium, which has expanded to 19 states, has been affected, but less than small brewers because it typically locks in contract prices for hops and barley two or three years in advance.
For cost and environmental reasons, New Belgium is working out partnerships with brewers in other states to make each other’s beer at the other’s plant and avoid transportation costs and excessive energy consumption.
"It’s been quite a year," Jordan says. "In spite of it all, craft brewers seem to have come out in pretty good stead."
For New Belgium, the year included an invitation for Jordon to meet President-elect Barack Obama during one of his campaign stops in Colorado. And in October, The Wall Street Journal named New Belgium one of the 15 best small workplaces from a field of 406 applicants that was narrowed to 35 finalists. "New Belgium has evolved into a national icon for unwavering dedication to quality product and responsible business," the judges wrote.
Other highlights for New Belgium included increasing beer production from 475,000 barrels in 2007 to a projected 494,000 this year and in June introducing Fat Tire in cans for distribution in Colorado, Washington and Oregon.
The idea of launching a brewery focusing on Belgian-style beers came to Jeff Lebesch while he was biking around Europe. The electrical engineer returned to Fort Collins with some ingredients and ideas. He hadn’t met Kim Jordan yet, but soon she would become a driving force in the business, and they would find that their backgrounds and skills complemented each other.
"Social work is a generalist discipline, and that’s a very good skill for entrepreneurs, that ability to look at a system rather than kind of focus on only one area," Jordan says. "Jeff’s skill set was as an electrical engineer. And that combination of kind of the front of the house and the back of the house was really a great fit for us."
Lebesch has been retired from the brewery for seven years, but the two still make a trip to Belgium once a year, taking with them employees who have reached the five-year mark of employment at the brewery.
"They kind of relive the trip that Jeff took that inspired him to start the brewery," says Bryan Simpson, New Belgium’s marketing director who has been with the company 11 years. "It’s a very unique culture. I haven’t seen anything like it in my years prior."
Jordan says a key to New Belgium’s success has been that she and Lebesch determined beforehand what the core values and the beliefs of the company would be: "Why does this company exist at all?" as she puts it.
"I also think it’s important to know, especially in the early stages, that you’re going to work really hard," she says. "So it’s good to love what it is you’re doing. It’s a lot of work to get a company up and running. And if you don’t love it, it’s not so easy to compel yourself to go do it so much."
It comes as no surprise that when Jordan and Lebesch met at that party hosted by a mutual friend years ago, they enjoyed a conversation over beer - although they didn’t talk about the product that would become such a large part of their lives.
"He may have said that he was a home brewer, but I don’t think we talked about it a lot," Jordan says. "We just started talking, and beer has always been my beverage of choice …. And here we are."
Mike Taylor is the managing editor of ColoradoBiz. He writes about small-business money issues and how startups are launched. E-mail him at email@example.com.
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