Koch and the Band of Misfits

On April 29, a bearded, long-haired man in jeans stepped onto a stage in Carmel, California and proceeded to tell a heart-rending story about an unpopular kid sitting alone on a crowded school bus. “The most uncomfortable seat on the bus,” Greg Koch told a rapt audience of some 700, “was the one next to me.”

The lonely misfit, today CEO and co-founder of Stone Brewing Company, wasn’t speaking to adolescents at an anti-bullying school assembly. Instead, he stood before some of the brightest and most innovative people in the world, who had paid $4000 each to attend the three-day EG10 (Entertainment Gathering, tenth anniversary) conference.

Koch, who has been a vocal critic of macro beer stepping into the craft beer arena, went on to lay out the industry factors that have led him to adamantly oppose Anheuser-Busch InBev (ABI) and Miller-Coors buying up successful craft breweries and otherwise impeding the growth of independent craft breweries.

Like a veteran college professor, Koch sailed from one point to the next without notes, explaining that expansion is expensive and taking out loans or taking on private investors impacts a brewery’s independence, especially when investors hold a majority of the company. More and more these days, founders of older craft breweries are nearing retirement and others are looking for faster ways to grow their breweries. Many are happy to sit down at the table when smiling investors come knocking with briefcases full of cash.

Over the last few years, ABI, in particular, has gone of a jag, buying up Elysian, Ten Barrel, Golden Road and other successful craft breweries. Where state laws permit it, ABI has also bought distributorships. This has led to bars like one in the Burbank airport that appears to offer a variety of craft brews, but they’re all owned by ABI. The same thing is happening at bars and on grocery store shelves all of America.

No doubt it was an enlightening lecture for many in the audience. For those familiar with the man, the talk was classic Koch as he expressed opinions shared by many in the craft industry. For the most part, the e.g. conference quietly slipped by mainstream media’s radar, especially the final minutes of Koch’s talk. In fact, I was among 15 to 20 beer writers at a talk Koch gave a week later in Philadelphia and most had not heard of the true craft initiative.

“Even though I, personally, could get a giant paycheck,” he told the e.g. audience, “I will never sell Stone to Big Beer. Ever. We will not be commoditized. We will not be homogenized. Artisanal ownership is a different kind of system than publically traded companies, one that follows an ethos. It involves passion, heart and soul.”

What Koch went on to say during the last three minutes has the potential to change the future of not only craft beer but other industries with strong artisanal bases. “I specifically want to foster a world of uniqueness, depth and character. And enter our solution: true craft, which I am announcing for the first time today. How do we create something that helps the independent artisans remain independent and allows their philosophies to flourish? True craft is that answer. It’s the alternative to being pushed out or bought out by the mega industrial commodity world.”

How the initiative will function is still in the works, but as Koch said, “It gives craft brewers another option rather than selling a majority interest to private equity or selling out to Big Beer.”

With Koch behind the venture and a hundred million dollars already committed by an undisclosed group of investors, true craft will be a concept to keep an eye on. Will Koch and his “United Band of Misfits” be able to compete with Big Beer? Whatever happens, Koch is always an interesting guy to follow.

View Koch’s e.g. talk on YouTube: https://www.youtube.com/watch?v=Ow8oWdh90Vg

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