Kansas City, Mo. ? When John McDonald started Boulevard Brewing Co. in 1989, his top concern was making flavorful beer.

Nearly 14 years later, the founder and president of the Kansas City, Mo.-based brewery said that when it came to beer in the United States, too much emphasis often was placed on “all the wrong things,” such as the number of calories or carbohydrates. McDonald continues to focus on flavor, saying that’s what should keep people coming back for more.

“When you finish a beer, it’s got to say, ‘I want another one of them,'” McDonald said.

And with that philosophy, the company started in 1989 by the then-35-year-old, self-employed carpenter not only survived the late 1990s slowdown in the specialty and craft beer market, but thrived — and continues to grow.

McDonald said his products — the most popular of which were a pale ale and an unfiltered wheat beer — were for “real beer drinkers” who liked the taste of “real beer.” Boulevard also makes a porter and a stout, which is only available on tap, as well as a few seasonal beers.

Boulevard beer is available in Arkansas, Iowa, Illinois, Kansas, Missouri, Nebraska, Oklahoma, South Dakota, and — most recently — the Twin Cities area. But company officials said they had no plans to sell the beer nationwide. Creating the next Sam Adams simply isn’t part of McDonald’s dream.

Company officials do, however, plan to build a new brewery by the summer of 2005 that will be able to pump out 500,000 barrels of beer each year. McDonald said the new brewery will be right next to the old one on Kansas City’s Southwest Boulevard. That one can make 90,000 barrels of beer each year.

“What percentage of people drinking beer today are real beer drinkers?” McDonald said. “That is the million dollar question.”

“I believe it’s 20 percent,” he continued, with a smirk.

It’s an ambitious figure, considering St. Louis-based Anheuser-Busch alone has about 50 percent of the U.S. market, while Boulevard has just 2 percent of the Kansas City area market.

McDonald insists he “admires” the “Big Three” of the beer industry — Anheuser-Busch, Miller and Coors, which together account for more than 80 percent of beer sold in the United States — but said they “have chosen a path of generic product.”

Company emphasizes flavor

Boulevard is a craft brewery, meaning the emphasis is on flavor rather than mass appeal. According to the Association of Brewers in Boulder, Colo., craft beers generally are made with malted barley, though some malted wheat or rye may be substituted. The top-selling American beers, including Budweiser and Coors, are brewed using 30 to 40 percent rice or corn, making them lighter-bodied and lighter-flavored.

In the heyday of specialty and craft beers, observers thought they could obtain as much as 10 percent of the national beer market, but the market share of these beers remains around 3 percent.

The specialty and craft beer market struggled in the late 1990s, as hundreds of breweries and brewpubs shuttered. Market growth reached about 50 percent in 1995, before sales fell flat in 1998, but Boulevard still managed to sell more beer each year without expanding its territory.

Meanwhile, the market has rebounded somewhat. Last year, U.S. craft beer production overall grew 3.4 percent, while beer consumption increased just 0.7 percent, said Paul Gatza, director of Institute for Brewing Studies, which is a division of the Association of Brewers.

“The people who weren’t in it for the serious long haul, who weren’t coming at it from the beer side but were more coming at it from the business side, they’ve kind of moved away and the hard core brewers have continued on,” Gatza said.

Boulevard’s sales growth has slowed in recent years, from an uncontrollable 50 to 60 percent each year in the early 1990s to 15 to 20 percent growth each year in the last six years. Jeff Krum, the company’s chief financial officer, said Boulevard saw 12 percent growth in the first quarter of 2003 and is shooting for 14 percent growth overall this year.

Plans for growth

Last year, Gatza said, Boulevard produced 63,616 barrels of beer, making it the 15th largest domestic specialty brewing company in the country.

“A lot of these smaller brands have been building awareness over the years and now they’re accepted parts of their regions and their communities, so people buy them. They trust them,” Gatza said. “The quality has improved remarkably in the last 10 to 15 years, and people, when they’re buying a craft beer they know they’re going to get something good.”

Bob Sullivan, the company’s chief marketing officer, said his goal is for Boulevard to grow without extending its geographic territory. If Boulevard did need to expand into new regions to make enough money to support its overhead, Sullivan said company officials would consider Colorado or Texas. But he said Boulevard will never be a national brewery.

“We hand sell our beer,” Sullivan said, adding that he knows all of Boulevard’s distributors and many retailers.

Jeff Becker, president of the of Beer Institute, said decisions about where and how to grow can make or break a brewery.

“They have to look at long term plans: Do we continue to expand? Do we continue to focus on our own markets? Those are the kind of decisions that brewers have made for years,” Becker said.

Some big names in the industry, such as Stroh Brewery Co. of Detroit and G. Heilman Brewing Co. of LaCrosse, Wis., were unable to sustain their growth once they expanded, Becker said, and are now out of business.