Company Background
In 1991, Jeff Lebesch and Kim Jordan launched New Belgium Brewing in the basement of their home. Today, thanks to many delightful brews and some excellent management practices, the $60-million company is the eleventh- largest brewery (and the third-largest craft brewery) in the nation. Based in Colorado, New Belgium is managed by 225 enthusiastic employee owners who brew, taste, package, market and sell about a dozen specialty beers to restaurants, taverns and other outlets throughout the western U.S.
Business Challenges
In recent years, the beer market has been relatively flat. The craft market, however, grew 9% in 2005. Other challenges include lousy weather, smoking bans and stiffer drunk driving laws. (Not that the latter is a bad thing; NBB advocates responsible drinking.) Still, the brewery has enjoyed enviable growth, posting double - and even triple-digit annual growth rates.
Great Game Solutions
“Shared ownership and fiscal transparency were always part of the plan,” says CEO Kim Jordan. “When we started sharing financial information, we really jumped off the cliff. We committed ourselves to developing a good curriculum, new-hire training, financial worksheets, quizzes, the works.”
In the late 1990s, after the ESOP was established, scoreboards dotted the facility. The production crew tracked hectoliters of beer produced per day (by label) and cycle times. The warehouse measured shipments, ship times and billing errors. Other productivity metrics were posted on the master production board, and a cascade of meetings ensured that everyone had fresh forecasts for sales, expenses, profit and other strategic line items. Today, employees still meet regularly to discuss forecasts, variances and plans, but many of the numbers are shared via the company intranet.
“Ownership mentality” inspires everyone to find ways to make the brewery more profitable and sustainable. For example, employees voted to make New Belgium the first wind-powered brewery in the country. They save thousands of dollars each year recycling wooden pallets, cardboard cartons, keg caps, amber glass, shrink-wrap and other office materials. They also sit on decisionmaking committees that coordinate beer development, philanthropic efforts, plant safety and technology. The Posse Committee (ESOP backwards, almost) works to enhances the company’s ownership culture.
By all accounts and measures, New Belgium is a “destination” workplace. Its novel employee benefits include a case of beer per week, a Fat Tire bicycle after one year of service, a free trip to Belgium after five, yoga classes, drycleaning services, cash advances, parties and festivals, volleyball tournaments and an employee art show. “Open-book management and ownership opportunities for everyone make our company feel very transparent. There are no big blocks or barriers between us, the founders, and our co-workers,” says Jordan. “In the marketplace, that gives everyone the impression that we’re a good business, that you can trust us. We’re proud of that.”
RESULTS
- Revenue: Grew by 12% in ’05 and by 15% in ’04. They sell in 16 states, up from 13 in ’03.
- ESOP: Set up in ’98; owns 32%. 85% of employees are owners. Average age: 33, up from 29.
- General job inquiries: Averages up to 40 per week. “People visit and they love it here. There’s a lot of positive energy. NBB hosted 30K+ tourists in ’05.
- Energy: Among the largest private users of wind power in the U.S. They use solar, too.
- Engagement: Employee-run groups oversee everything from new beers to charitable giving.
- Philanthropy: Donates $1 per barrel each year to causes.
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