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Archive for Sunday, May 24, 1998

SUCCESS

May 24, 1998

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— It's sold in eight Midwestern states, but the highest per capita consumption of Boulevard Beer is in Lawrence.

Boulevard Brewing Co., according to its president, has become the 38th-largest U.S. brewery in less than a decade of existence.

And Lawrence beer drinkers have done their part to make it so.

``Lawrence has probably the highest per capita consumption in our market,'' said John McDonald, 44, the company's founder and president.

With the exception of a few convenience stores, Boulevard products, on tap or in bottles, are found everywhere beer is sold in Lawrence -- including more than 100 bars and restaurants.

``When we entered the market with it we didn't know what to expect,'' said Kent Beisner, vice president of Jayhawk Beverage, Inc., which distributes the regional brewery's line of ales, stouts and wheat beer in Douglas and eight other eastern Kansas counties. ``We had no idea it would explode and become one of the most popular beers in Lawrence.''

At a time when many microbreweries, which are those that make fewer than 500,000 barrels a year, are beginning to struggle for survival, Boulevard continues to see sales grow about 20 percent a year. The firm, which sold about 35,000 barrels of beer last year, is planning to expand its production capacity to 50,000 barrels and has purchased land next to its Kansas City brewery for possible construction of a second brewhouse.

McDonald said the company has prospered because it has focused on selling the best beer it can make close to home, rather than trying to make massive quantities for a national market.

``We want to reinvent the local, regional brewer,'' he said. ``Sixty percent of our sales are within 50 miles of the brewery. There's a lot of sense to regionalism. It gives a place an identity.''

See Brewery, page 2E

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Tapping the draft sales

And unlike bigger beer companies such as Coors and Anheuser-Busch, 60 percent of the company's revenues are from draft beer sales.

``That's very, very unusual in the industry,'' McDonald said. ``The industry as a whole is 10 percent draft. But retailers (bars and restaurants) do make more selling draft. That's a niche we can occupy. Eventually we'd like to be 50-50 draft and bottled.''

And selling beer by the glass in bars has been a great way to expose beer drinkers to the company's products.

``The ability to sell in bars is a good substitute when you can't afford a lot for marketing and advertising,'' McDonald said. ``It's a great way to sell beer. I like the ecological soundness of it. We sell a 15-gallon keg to a retailer. The retailer sells it in a clean glass and then washes the glass to use again. No waste. Nothing to the landfill. I think it must be one of the most ecologically sound processes in our modern society.

``We have 10 percent of the draft beer business in Kansas City, over 700 draft handles,'' McDonald said. ``We've been very effective on draft.''

Brewing a business plan

McDonald grew up in the north-central Kansas town of Osborne. He enrolled at Kansas University in 1971 and graduated in 1976 with degrees in painting and printmaking.

After college he traveled to South America for two years, teaching for a while in Ecuador before returning to Kansas City to work as a cabinet maker.

He did carpentry for 15 years. But homebrewing and trips to Europe, where he tasted the products of small local breweries, helped convince him he wanted to make beer.

It took him three years to plan the business and find investors for the enterprise, which began brewing in 1989. That was before the great wave of microbreweries and brewpubs began opening across the country. The first year, when the company produced only 1,900 barrels, there were only about 115 U.S. breweries of all kinds, including the giants like Coors and Anheuser-Busch. Today, there are more than 500 microbreweries and many more brewpubs. Many are in a slump.

``There's going to be a huge shake-out,'' McDonald said. ``It's bound to happen. The brewing business is not easy. Too many people got in thinking there was a quick buck. There were people wanting to get in the business who don't even drink beer. Think about that a minute. That's not even a good thing.''

The real thing

McDonald's whole focus is making his product a good thing. He calls it ``real beer.''

It is made with whole hops, not concentrate. It isn't pasteurized. It isn't diluted. And it is all made at the brewery by company brewers, he said, not some contract brewer like more and more of the so-called craft beers on the market these days.

``People are always asking how do you make really good beer,'' McDonald said. ``I answer: How do you do 200 little things right?''

McDonald said the company's goal isn't to become a big national beer producer or to make ever-greater profits. It is to make better beer and never stop improving.

That's the difference between real beer and the stuff made down at the other big Missouri brewery.

``What we believe in is constantly trying to make the beer better,'' he said. ``Product consistency is important but it's not everything. We want to keep pushing in the right direction. One of the questions lost in modern food processing that we want to hold on to is how can we make it better. The question now is how can we make it faster and cheaper. Obviously, you have to make a profit so you can buy the stuff to make the beer better.''

Two years ago the company spent $2 million for a new keg filling system and 20,000 straight wall, single entry kegs.

Like the remarkable cleanliness of the brewery, the new keg system allows the brewery to avoid flavor-killing pasteurization.

``It cost us three times what it cost to originally build the brewery back in 1989,'' McDonald said.

-- Mike Shields phone message number is 832-7144. His e-mail address is shields@ljworld.com.

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