John Kimmich on Craft Beer Brewing as a Business

In this episode, Dave interviews John Kimmich, the co-owner and head brewer of Alchemist Beer. He’s also the maker of the Heady Topper, also know as the “Heady,” a beer with an international reputation which is ranked #5 Beer in the World. John discusses the journey his brewery and pub have taken—from brewing 400 barrels a year to 18,000—with no compromise on quality and zero marketing efforts. The reputation of the beer alone and John and Jen’s commitment to quality is what fuels their success. Their motivation? Tune in to find out how these two are redefining what it means to run a “lifestyle business” that not only serves them, but their greater community.

Time Stamped Show Notes:

00:01 – Entrepreneurs Organization proudly presents Virtual Learning Podcast 00:33 – Dave welcomes John Kimmich to the show 00:52 – John is co-owner and head brewer of Alchemist Beer 01:40 – He started his brewery with his wife in Vermont 01:55 – They limit the production of the beer so that the beer sells out fast 02:49 – “It’s not an intentional limiting of production” 03:14 – The reality is, for the 8 years we’ve had the pub, the most number of beer barrels made were 400 – 28-35 of which were Heady Topper 03:33 – They now produce 9000 barrels of Heady Topper 03:50 – From 28 to 9000 barrels is an amazing leap for John and his wife, Jen 04:05 – Since the opening of their new brewery, they are able to produce a total of 18,000 barrels in a year – 50% of which are Heady Toppers 04:57 – When the pub closed in 2011 because of Hurricane Irene, the brewery became their only source of income 05:43 – They wanted to be able to offer people beer outside of the pub 06:16 – The pub was destroyed on a Sunday night and by Tuesday morning, they canned the first Heady Topper 06:30 – “The timing of it really saved us...we would have been financially ruined” 06:57 – For years, John paid flood insurance but their insurance company never told them that anything in the basement wouldn’t be covered by the policy 07:13 – “We lost everything” 07:20 – The proceeds from the production brewery became the source of funds to rebuild the pub 07:27 – The pub was rebuilt, but they were unable to put the brewery back into the basement – they leased out the building and focused on the production 07:48 – Within the first month, they went from 1,500 to 3,000 barrels 08:25 – Over the course of 6-8 months, they were able to do up to 9,000 barrels 09:20 – They had zero marketing – all came from word of mouth 09:53 – Quality was what made their beer stand out 10:20 – John has been making Heady Toppers since 2004 10:46 – In 2011, unavailability was the driving factor to get Heady Topper out into the market 11:34 – The couple knew if they put it out into the market, it would click 12:04 – John learned to brew from Greg Noonan at the Vermont Pub & Brewery 12:35 – Craft beer has exploded in the last 6 years 13:13 – Greg passed away a few years ago at 59 13:25 – “He never got to see any of this” 13:50 – He was a great friend and mentor to John 14:20 – In 2011, there were less than 2000 breweries, now there’s 5000 in the country 15:29 – “I have seen countless breweries expand and begin to suck” 15:40 – A slip in quality is something that comes with growth – the reason why John limits the production of Heady Topper 16:25 – The couple has leveraged everything they could to get to this point 17:17 – Their vision is to be a mechanism for social economic change in their state 17:51 – John and Jen feel they have a responsibility to the people around them 18:13 – Recently, they formed the Alchemist Foundation 19:04 – Their employees are an important factor in achieving their goal 20:02 – It’s the ripple effect that makes them focused on positive things 20:33 – What’s important to them is creating opportunity for other people 20:59 – Education is the #1 focus of their foundation 22:22 – John’s website is Alchemist Beer 23:13 – It took years to educate people on what makes a GREAT beer 24:08 – “The proof is in the can” 25:06 – Don’t let feedback change your opinion 25:19 – The trick is to know when to listen to feedback 26:27 – Brewers brew beer they way they like it 26:49 – Customers can tell if the beer is great or not 27:00 – Successful businesses have customers lining up 27:40 – John shares a story about the crazy things people do just to get Heady Topper 27:48 – The day John put Heady Topper on tap at the pub, he found out that a customer flew from Florida to Vermont just to get his beer 28:04 – The customer drank all-day until the pub closed and flew back home the next day 28:26 – Since then, John has been hearing crazy stories 28:50 – “We’re not going to let the quality slip ever” 28:57 – What they do and what they create is a lifestyle for John, his wife, and their employees 29:33 – “We don’t need more” 29:45 – It’s a different way of running a business for John and his team 30:34 – John turns 46 in a couple of weeks 31:02 – John will never pressure his son into the business 31:27 – “If it dies with us, it dies with us” 31:46 – They will never sell this brewery ever 32:35 – Different people have different priorities in life 33:31 – Beer is a delicate thing – improper handling can ruin it within 2 days 33:47 – When Lagunitas first came out, John was sure they’d be amazing 35:02 – John shares their journey looking for the perfect pub location 35:12 – John worked as a bellman in a hotel 35:23 – Over dinner, he said he found a location in Waterbury 35:29 – One guy chuckled and said, “Nobody goes to Waterbury to drink” 35:40 – “That was a real motivator for me” 35:50 – Waterbury was very different back then than what it is now 36:14 – John takes great satisfaction in what they’ve built 37:17 – The “Boxers or Briefs” Round Meat or Veggies? – “Meat” Kids or No Kids? – “Kid” Dunkin or Bulletproof? – “I don’t drink coffee” Consistency or Fluctuation? – “Consistency” Prius or Pickup? – “Prius” Beyonce, Janis Joplin, or Judy Garland? – “Frank Zappa” Powerboat or Sailboat? – “I hate being out on water” Paperback or Audible? – “Paperback” Star Wars or Free Willy? – “Star Wars” Mountain bike or Road bike? – “Mountain bike” Red or White? – “Green” Jeans or Khakis? – “Jeans” Supplements, Vitamins, or Au Naturale? – “Au Naturale” Crusher, Heady, Focal Banger, Beelzebub or Skadoosh? – “Whatever is in my hand...I guess Heady” 40:10 – Within the 8 years of the pub being open, John has had 12 beers rotate on tap 40:36 – “It’s a very different thing when you’re packaging” 41:12 – Freedom and a creative outlet is what they’ve built in their new brewery 41:53 – The vast majority or names of their beers come from John and Jen brainstorming 43:36 – John has taken the term “lifestyle business” to a whole new meaning 44:14 – One man’s success is another man’s failure 44:40 – People have social responsibility and there’s too much selfishness in the world 45:23 – Dave closes the podcast and encourages you to visit Entrepreneur’s Organization

3 Key Points:

Be mindful that expansion can result in a slip of quality—maintaining quality is of the utmost importance. Everybody has different needs, desires, and priorities; know who you are and what is right for you. Use your business to serve a more meaningful purpose in life as well as your greater community. 

Resources Mentioned:

Entrepreneur's Organization – The EO Network Alchemist Beer – John’s website Heady Topper – John’s bestseller beer that currently ranks #5 in the world Hurricane Irene – The hurricane that destroyed John’s brewery and pub Greg Noonan at the Vermont Pub & Brewery – Where John learned to brew Alchemist Foundation – The Alchemist Beer’s foundation Lagunitas – A beer competitor