°µÍø½ûÇø

Stefani H  0:07  
Welcome to another episode of creative distillation. Your hosts Jeff and Brad from the University of Colorado boulders lead School of Business, discuss entrepreneurship research while enjoying fine craft beverages. This time, Brad and Jeff take the show on the road and hour up I 25 to Fort Collins and the home of New Belgium Brewing one of the original Colorado craft brewers. There they speak with Katie Wallace, head of environmental, social and governance at New Belgium about the breweries incredible origin story, which begins in 1991 in a Fort Collins basement. They're also joined by Thomas J. Dean Timberg business for a better world university professor at Colorado State University in Fort Collins. He's a longtime fan and friend of New Belgium, as well as our featured guest for our next episode. This week's field research involves sampling three flavors from this iconic and impactful brewery, including the new recipe for their flagship that tire Ale, enjoy and cheers.

Jeff York  1:26  
Welcome to Creative distillation where we distill entrepreneurship research into actionable insights. I am your host, Jeff York, from the LEED School of Business at the °µÍø½ûÇø, also the Director for the Deming center. I gotta mention that because you know, our famous Deming wants to make sure we get that in there and the research director for the Deming Center, and I'm here as always with my fellow delegate,

Brad  1:49  
breadwinner. Jeff, it is great to be with you today. As you know, I'm an entrepreneur, I work at the Dominguez center alongside you, but we have a really cool venue that we got this

Jeff York  1:57  
is amazing. We have we are not only by far the largest, most successful brewery we've ever visited, it is perhaps the coolest place I've seen for someone to work it's pretty amazing. So we're definitely gonna have to talk to our guest about that. Because I'm just looking around and these people are like working in this cool area. They got snacks and like you know, they got a gym in the locker room and like yeah, slide they apparently they have free beer. So I'm liking the look of this. We are at New Belgium Brewing Company in Fort Collins, Colorado, also has a brewery out in Asheville, North Carolina, the pleasure of visiting last year, mountain bike trip out there also beautiful. And we have a couple of guests.

Brad  2:36  
Yeah, so first of all, I'd like to introduce Katie Wallace. Katie is the lead ESG manager. Is that Is that correct? Katie? Yeah, head of ESG, head of ESG for New Belgium. Brewing, Katie, thank you for having us today. Yeah, Welcome to Creative distillation. I'm really interested about to hear about your job to hear about we have a couple of beers in front of us. And just the whole story.

Katie Wallace  2:57  
 Okay, cool. And

Jeff York  3:00  
we also have joining us today the Timberg business for a Better World University Professor Thomas J. Dean,  

Thomas J. Dean  3:08  
Glad to be here,

Jeff York  3:09  
as I call him, Thomas J.

Thomas J. Dean  3:12  
You've never called me. Podcasts. He's Thomas J.

Brad  3:17  
Wait, I love that title, though business for a better better world. That's awesome.

Jeff York  3:22  
You get such a cool tool. Yeah,

Speaker 1  3:23  
our entire college is based off the concept that business for a better world.

Brad  3:28  
Really, you have any openings.

Jeff York  3:32  
Tom is a Colorado State University, which I hope I mentioned that. And he is an alum of the lead school. I am indeed so and you know, so we thought what better gathering could we have than to come up here on a road trip up to Fort Collins, which is a lovely town. We boldly left boulder. Big deal. We didn't get off lane. This time though. We just drove for a while. And this This campus is amazing. I would highly recommend visiting here if you're in the area for sure. CSU campus is nice, too. I'm talking about the New Belgium campus actually. And I knew that Tom had written this paper that we're going to talk about in a little while about selling out or selling in. And it's about impact companies going through acquisition. Exactly, which is a paper that he and his colleague, Yolanda Saracen, another professor at Colorado State University had developed for a long time, and I saw many iterations and now it's published. And so we're going to talk about that. And we knew that coming here to New Belgium would be really interesting because you're Belgium was acquired in the recent past. So we're gonna, we're gonna talk about that in a little while, but first to the important things. Beer, obviously. So we have three beers sitting in front of us. What we got here, okay.

Katie Wallace  4:53  
Well, today we have our classic Fat Tire, where we you know, the whole idea of New Belgium was born. In a bike seat we say and and Jeff Leibish, who was one of our founders, named his his first beer after his fat tired bicycle. This is a new recipe very controversial. Yeah, about a year ago.

Jeff York  5:15  
There's a new recipe for fat. Yes, I know why.

Katie Wallace  5:18  
Just Google new recipe for fat tire and all kinds of drama. But it's actually it's really, it's a really cool recipe right now. It's very similar to the initial recipe, and the Jeff made and many of the same attributes. But right now the it's a little bit lighter, easier to finish the whole idea of fat tire originally, I used to say when I was bartending in college back in the early 2000s, and pouring fat tires, that fat tire was the gateway to good beer. You know, people were drinking yellow beer at that time, and primarily, and fat tire was very sessionable. Yeah, so So then, you know, craft beer and palates have changed. People who are coming into the drinking age now no longer, you know, coming off of yellow beers, they were raised on sour beers, for example. And so so just, you know, the palates across the market are entirely different today. And and this is the 2023 version of the gateway to good beer.

Brad  6:17  
That's really That's a great story. But Katie, how long have you been with the company

Katie Wallace  6:20  
19 and a half years.

Brad  6:21  
So you've seen before to after acquisition? Early days? Were you excited about the change of the recipe as a I don't want to say old timer, but as a certainly a long, a long term fan of fat tire? But what do you think

Katie Wallace  6:36  
I have very mixed feelings, right? Like I'm sentimental. I have things I've saved throughout my whole life, right? And my grandmother's furniture in my house. And so So I, you know, this is I was very sentimental about it, because it's such a beautiful story that we are deeply connected with. But the reality is, the Amber's really haven't been growing, and it was dying on the vine a little bit. And so you're faced with a decision? Do you just let it die on the vine? Because that style is less popular? Or do you take such an iconic brand and bring it back into relevance in today's day and age. So I liked the idea of maintaining the relevance of the story with a lot of the similar attributes of the beer. Also, that tire for us. And in the sustainability world. It is our brand where we speak about our climate action, and it's a certified carbon neutral beer. And so selfishly, from the environmental impact space, I was happy that we get this chance to revive the brand that really speaks to all of our advocacy for addressing climate showing the business case. And for decarbonizing, do

Brad  7:35  
you have like some cases of the old Fat Tire next to your grandma's couch.

Katie Wallace  7:40  
I do have a bottle at my desk.

Jeff York  7:43  
Let's try. Cheers, buddy. Hey, we managed not to spill up on the microphones good. Yeah, another first recursive distillation. It is lighter. Yeah. So I remember. I remember Fat Tire. I had went a long time, but it is the I mean, it's got to be the most popular Colorado bureau. Iconic. I mean, like is the first dominant craft beer of Colorado. Yeah, yeah. Yeah. But

Katie Wallace  8:12  
yeah, it really grew up and, and exploded in the early days. I think now for sure. Our video Ranger has surpassed it quite a bit.

Jeff York  8:22  
A little brand at this point. I'm not sure if people even understand voodoo Ranger is part of New Belgium necessarily

Katie Wallace  8:28  
known. Many people do not know that. Yeah, we can talk about that. But yeah, fat tire is you know, pretty iconic. I don't know if you've ever heard of the Tour de Fat also that comes through Fort Collins, but come back and in August and September, but yeah, we that's we have 30,000 people that come out of the community all in costume to ride bikes, in a parade through town and drink beer and listen to music. And so it's got a whole culture around it. I think it's not just the beer. That

Brad  8:56  
was really cool that community. So you said a couple of things. Katie, though, that have gotten me thinking first of all, if we had tasted this beer directly to the old recipe, what's the difference? What What would we be tasting?

Katie Wallace  9:06  
I think you'll have a lot of the same multi flavors are in there. As before I taste some familiarity I'm not sure if you all do as well from from the maltiness. But instead of ending with a more molasses note, you've got a crisper finish. And so, so that's the main difference on your description. I actually drink much more fat tire today than I did.

Jeff York  9:29  
I would actually order this because I like I would say I'm not fat tar in yours because it had it's a fine beer. But it was it was sort of the quintessential American Amber, where it had this like lingering sweetness on the tail. That's almost to me coy. Like, I don't like that. That means bad. It just means I don't like it. This has a little bit more of a hot profile on the back end that like finishes real clean. Like you don't there's no that lingering ambery I Make Me Think a Killians read you guys remember that beer? Yeah. So which is not a good associate words are that Kathy Ireland? Not all these things all the college beers dating myself, man, this is delicious. It's lighter for sure it's crisper still has that toasted malt flavor that's always had. I think the Toasty like middle kind of comes through better without all the all the caramel malt. I think that's what's going on. I don't know, I'd obviously so

Brad  10:26  
I love lagers. And I like it, in part because of the clean finish. This is actually going to go in my fridge. So I'm really I mean, I don't say that. I'm really happy we came here just because I never would have known that there was even a new recipe or anything associated with it. But it gets me even to a more serious question. And the one that will really resonate with me, you said certified carbon neutral. Yes. What the hell is that?

Katie Wallace  10:53  
How long do you

Brad  10:55  
episode? Yeah, that's, I mean, that's really cool. So I mean, beyond a new recipe and the process to correct Well, is

Jeff York  11:02  
this carbon you speak?

Katie Wallace  11:06  
This little thing. So we have, you know, been doing decarbonisation for a very long time. Back in the basement of Jeff and Kim's house. Jeff back in 1991. Jeff set up 10 Trash Can over the brew kettle to capture the steam the waste heat, and he put a coil pipe through it, and ran the incoming water for the next batch through the steam to preheat it and save energy. Basement brewery, right. Yeah, the very first batch as a Fat Tire were brewed that way. That's cool. So really, Jeff and him had a really deep passion for what we now call human powered business. The values that that explain that were really similar to the ones that Jeff and Kim wrote before they sold their first bottle of beer in 1991. And they were brewing on this system in their basement. So in 1999, we our co workers are who are employee owners voted to give up profit sharing that year. So they could bring wind power to Fort Collins, and and we became the first wind powered brewery at that point in time. And so it's been a fun, a fun, fun time. We did the first carbon footprint study for beer back in 2008. And the whole world and have been really involved in the business efforts towards you know, being able to measure it, make solid claims and can convince our policymakers of the business case for more investments.

Brad  12:25  
I love it. I love it. Like so is all your beer brewed here? No, not

Katie Wallace  12:29  
today any longer. So we have the Asheville brewery with Mr. Jeff mentioned a little bit ago. And we also just earlier this year acquired another facility and Danville, Virginia and that's a really fun group of folks that are helping us to expand our Virginia road trip. Beautiful there you can actually drive from the Asheville brewery on the Blue Ridge Parkway all the way up to Danville Virginia.

Jeff York  12:51  
Sounds like a good trip. Yeah,

there we go. Yeah, bike ride.

Driving will drive an EV.

Katie Wallace  12:59  
Alright, deal. Oh, good compromise, about

Brad  13:02  
the values of your employees saying you know what, we're gonna forego some short term gain to make these really big changes in a business. That's That's incredible. I don't think I've heard a story like that. On the package, Jeff? Well,

Jeff York  13:15  
I mean, yeah, we really haven't visited any, I guess impact or a coming? I'm trying to think if any of the industries we visit or even be corpse. I don't think so. I forgive me. We gotta get on that. Yeah. Well, it's been six.

I can't relate

Katie Wallace  13:30  
Welcome to the new world.

Jeff York  13:31  
Yeah, let me but it's not I mean, this has been something New Belgium smelly drawn from the very beginning, like I mean, so I wrote a paper that actually talked about New Belgium, I recovered with an Italian co author. I can't remember the name of it. That's how old I am. It's in the journal business ethics. And we talked about this idea of responsible investing funds. At the time, a lot of them were based on sort of religious ideas. And we both are PhD students. We both thought rolling alcohol out on a moral basis was just terrible. He being Italian and myself being a mere officiant both concerned about impact businesses. And so we put this paper on a car trip up to Philadelphia to a conference, we literally did not have a paper and we just wrote it on the car trip and presented it at this conference in the journal business ethics, where we just argued that like you can't judge a product by its class, you need to judge it by the values of the company and what they actually do with the product. And my example was New Belgium Brewing Company. I talked to all about the history of the company and fact that I think at the time you had a sustainability goddess, which I guess today would be you. Did you ever have that title?

Katie Wallace  14:43  
I did not know I followed that title. That was my title. I said Jimmy got us at most. The

Jeff York  14:50  
only title cooler than the timber business for a better rule University. Simply got

Speaker 1  14:56  
Hillary Hillary Yeah, first I met here but Is that she was sustainability.

Jeff York  15:02  
So and then my colleagues and Monet he wrote all about, he was from fair Verona, of course famous from, from Rumi and Juliet. He wrote about the Italian wine industry and about how it creates community bonds and represents the deep belly have values of the region. And we present this thing and everybody was so excited. They're like, you've got to write the paper for the journal. And it's the easiest paper I've ever published, because they were like, please write it up and sit down. We're like, we don't have a paper. We just, we just made this up on our car. We rarely got published anyway. I everybody

Katie Wallace  15:33  
loves a little rationalization.

Jeff York  15:36  
2009 so long been a fan of the brewery. It's really an honor to be here. It's and this beer is is so good, really good. It's, I gotta say, I Farley, what do you think Thomas? JD? Yeah, okay. Well, we've every one of the next. And

Katie Wallace  15:54  
you know, and, Jeff, just to just to wrap up on that topic there that, you know, we we call this New Belgium Brewing because our founders were very excited about and inspired by the Belgian culture of drinking versus what we saw in the 80s and 90s. In the United States, and they loved they loved in Belgium, it really brought community together, and it was consumed more in moderation and in a part of an art they could appreciate. So that was why we called New Belgium and, and you know, Ken, being a social worker really helped to weave in that positive impact over time. They

Jeff York  16:26  
start and from a nerdy beer nerds or sect, they were one of the first craft breweries to brew many of the bells themselves. For example, one of my favorites was the triple, which they still make. I'm pretty sure I'm not positive. But but I didn't know any other American craft brewery trying to replicate triple usually, American craft breweries would be like, Hey, we made a British beer, and we added more hops. Yeah. Belgium is was like, you know, even from the start endlessly creative, not only in the values that the employees held, and the the mission basis of the company, but also in their brewing is a reflection of that. And I don't know, I just think it's awesome.

Katie Wallace  17:02  
Yeah, not in close to two decades. I've never gotten tired of our beers. There's always something cool to try.

Jeff York  17:08  
I gotta be honest with you, I would not have gotten a flat tire. I mean, I would have gotten in before I got Coors or whatever. But I would not have ordered one. I will now this is I think my hat's off to the the new recipe I like, great.

Katie Wallace  17:22  
Yeah, well, you've got a trunk in your car. Right. So

Brad  17:26  
then here's the other thing, because values are certainly running deep here through your business, that maintaining values before and after an acquisition. I don't know if that's on our agenda for today. Oh, yeah, we're gonna talk about that. Okay, because I, because I do think that many, many times you see, value stay within a company, they stay within a company, either the VCs come in, or there's acquisition and roof. What values right, and I love that they're still here.

Katie Wallace  17:54  
Yeah, it's pretty phenomenal to see how that all played out. And certainly moments in history throughout the last few decades, you thought maybe it wouldn't go away. But I think that Kim and Jeff were pretty visionary and creating some lasting values. And also, Kim, I think just with her social work background and the knack for the lived experience of people really knew how to take it off the page. You walk into a business sometimes and there's a plaque. Oh, kindness, integrity, courage, and everybody's

Jeff York  18:28  
there in the cubicle. Can I get more money from poor people? Oh, wait. Oh, yeah. freedom and individual choice. What's like the Koch brothers are on business here. It's fine. You

Katie Wallace  18:44  
can fit anything into a box. Yeah, no, you know, you can see an architecture here, even like him, in designing this room in this building we're sitting in, she wanted it to feel human scale that so that when you walk in the door, you still feel empowered to share your voice and be a part of the business. So she paid attention to all the little details that I think really drove value and we know are a big part of our growth and our and our ability to become a leader in craft beer. And eventually when Karen decided to purchase as they felt very much the same way. They said this is the business for the future. They they valued us for our culture and our community impact and our environmental sustainability investments. So we got lucky with someone like Kieran, that doesn't always happen. But more and more Do

Brad  19:26  
you have a choice though to right, the brewery had a choice and they chose well, yeah, right. So it goes both ways. Related

Speaker 1  19:33  
to that jumping ahead. So do you see Kieran saying, Oh, well, how do you do those things and transferring knowledge? Yeah, here in our little lion?

Katie Wallace  19:42  
Yes, a little bit of both. But Kieran is actually very impressive and has long been a leader in their own right as it relates to social and environmental impact and the culture of the company and so they've been very easy to work with, but they they really valued that about us and helped us to protect it. We get together several times throughout the year and shared different ways of doing things. And we learn from each other and expand. I've learned so much and working with them. And I know we've shared a lot about our culture, especially and and working with them. And so yeah, really, it's been a really beautiful partnership. And that

Brad  20:16  
way, you don't have to forego profits just to maintain really good yesterday breakfast.

Jeff York  20:21  
Well, thanks for telling me that. I appreciate you. For me, I never I never would have occurred. I appreciate it.

Katie Wallace  20:28  
Yeah, the B Corp story is really a big part of this to a hearing was very attracted to our B Corp sort of religion, they saw that as a marker for a lot of the things that they believed in. And and they have they see that as an important influence in the broader business as a whole.

Brad  20:41  
Oh, what's the biggest surprise from you with Karen buying you? What's uh, what's something that surprised you through the process?

Katie Wallace  20:47  
I think the Japanese culture is very more much more communal and collective. Right. And so I think that that was fun to click into some of what seems novel over here, and it seems maybe a little bit more obvious. To them. Yes. And then they're just fun people. I have a few beers with some some folks from Karen their blast.

Brad  21:07  
You know, you have my email address. So anytime.

Katie Wallace  21:13  
Yeah. And then the last fun thing, you know, selfishly, for my team and myself as we have more budgets to do. So they've been really they've been ready to invest in the practices that

Brad  21:25  
keep this going. I encourage you to experiment and try new things. They do. Yeah, they're very innovative.

Katie Wallace  21:29  
And they have really cool innovation labs that are working on some pharmaceuticals and they do things like plastic recyclability and circularity research. So they're really broad range of work that they get into, and they're just super fun in that way to play with super smart and innovative and, and it matches our culture here, which is always tinkering, right and thinking about new ways to do they have

Speaker 1  21:52  
scale. They deal with stuff like packaging your plastics and things. They do. Yeah. What's the next beer we

Katie Wallace  21:58  
have here? This is out of our voodoo Ranger IPA family. Which is, you know, this one's the juicy haze. It's my favorite. Oh, man,

Jeff York  22:14  
we got this big conference table. And there's all these electrons between us all, not

Katie Wallace  22:19  
the first time beer has been spilled. So this this, of course, is the New England style of the IPAs, so a bit easier and I think a softer landing and pulls out more of those fruity and floral notes and, and so juicy, sorry, booty Ranger IPA, not something you usually hear people claiming in the world of craft beer, where smaller is better oftentimes, but it is the biggest IPA brand and the country. And so really, yeah, it's taken off. Really appreciate so much about Buddha Ranger, you know, rights rights, our paychecks and whatnot, right casual

Jeff York  22:54  
branding. I mean, just so it's I don't know, I'm just sitting here thinking like, you know, so you've got New Belgium Brewing Company named after like Belgian brewing and their love of the Belgian countryside and bicycle trips to there and all that stuff. And they create this beer is what usually happens in craft beer. They create this beer Fat Tire that really like, I am sure if you did like a survey where people would recognize the name Fat Tire, the new belt, like they just know, that branch. And they did again, with a whole range of beers. Any insights into how and why that's the case? I mean, I just don't see this. Usually. Right here in Nevada for a comparison, right? You got to pay lip, we got to start we got Sierra Nevada, you know, celebration, ale, whatever, you know, they just it's always but Do you guys still do that? It's

Katie Wallace  23:46  
very different. Right?

Well, I mean, I think that it for a few years around here. It was like the Thunderdome in relation to are we a house of brands are branded house, right? And so, so that so that we like wrestled around with quite a bit. And I think we ultimately landed in the place that we're both and and we can, you know, we want to do the business practices with a New Belgium brand, which Fat Tire perfectly espouses. But we also want to play around in other areas. And I would say splitting them apart actually made it easier for us because we were trying to just push so many stories down one brand, that being able to say Oh, fat tires about being outside and climate action and protecting the outdoors and being active. And then voodoo Ranger really came along as a way to kind of be irreverent towards the nerdiness of hops like people were showing up at bars the height of like IPA explosion, feeling very intimidated about what hops to you know what, I don't know. Am I supposed to know what happens in this beer Ranger said Who cares and is happy and just enjoy it and will take care of you and and so I think that's the whole idea of the Voodoo Ranger brand. But it actually came out of this Belgian wrestling match to where it was like, all of our sales folks were out in the field. We call them beer Rangers, and they were out in the market and they they liked it. IPAs, and they wanted us to have an IPA. And then it was like this, you know, but the Belgian style, that's not true to Belgian style, we can't do that. Back and forth, back and forth. And eventually, we all agreed we'd make an IPA and we call it Ranger IPA. But inspired by our sales, folks. I

Jeff York  25:15  
mean, my dog

Brad  25:18  
traveled over the head with hops either.

Jeff York  25:22  
It is soft, you're right. Yeah. And I like that. Bread, I think we had an extra one side. That's our actual insight alert. I'm going to try to say this case it much better than I will. But as you're in a growth company, if you're thinking about experimenting with other types of skews, perhaps that go away from what you normally do, not a bad idea to maybe even create a different brand and experiment with that, so that you can hold on to your current brand. And if the second one takes off, then now you have multiple brands. I think it's really worked for you guys to hit. Yeah, as an outsider, I mean, I just so you know, a little podcast, we don't compete directly with call forehead fables. And none of you guys are gonna know what I'm talking about. But my teenagers definitely do. And apparently one of the podcasters on there is sponsored by voodoo Ranger. I don't know much about this. But he says he is. And my kids are, you know, I think his name's poo is sponsored by. This is what I'm told. Yes. And I'm just I'm totally not they be young and hip listens to us anyway. But if you're out there, and you're young, and write to us, and straighten this out, why don't we have a voodoo Ranger sponsorship when poor does

Brad  26:40  
that's what I mean, that's a conversation we have with mice turn off, Jeff. I'm

Jeff York  26:44  
sorry, I got excited. I just remembered this thing. So my kids, but let's face my kids, like, I'm not just a great thing. But my kids who are 1618 know what voodoo Ranger is because of this podcast how interest is such a vibrant brand with like the skeleton and the ranger at its very, it feels very Colorado's slash Grateful Dead iconography to me.

Katie Wallace  27:07  
Yeah, it depends on which one you're looking at, though, too, because I think that there are a lot of different styles of Buddha Ranger skeleton. But the cool thing in this day and age is that it doesn't have skin. We're all the same, you know, like IPAs, and we actually see like a lot of engagement from other markets that historically haven't seen themselves in craft beer that enjoy food arranger do so it's cool. Yeah.

Brad  27:28  
Can you give us an example? Um, well, so

Katie Wallace  27:31  
I don't know, the full roster of people that we sponsor, that we, for a long time sponsored T pain on Twitch and AND T PAIN was had an effort where he was really appalled to see a lot of the revenue on Twitch for gamers going towards the white community. Right. And so he started an effort to help gamers of color, like get into it and make some money off of it. And so by supporting folks like T pain, and you know, that way, we're able to like, you know,

Jeff York  28:01  
I was talking about I mean, this is really smart marketing, like, you know, I mean, I don't know any other craft brewery, who like says, you know, what we should sponsor like, you know, online game. Yeah. But there's

Brad  28:12  
an organic component to it, too, which I think is really cool. Right? Let's take a shot here. Yeah, let's check it out. And check it out. And then experimentation, and then the benefits that have come from that and the communities that you've reached. Fabulous. Yeah,

Katie Wallace  28:24  
really, really cool. It's been fun, fun to play in a new area, and really fun to not have to reconcile the earnest business story. Yeah, well, we call him in hard business with the irreverence of voodoo Ranger. And it's just a lot of playgrounds that we can express ourselves in different ways.

Jeff York  28:38  
I mean, I'm sure you think about this. I mean, to me, it's like I think it's a big problem with the sustainability movement with ESG of like having this I mean, you know, we live in Boulder. So it's like, this is very, like wealthy, very white, like, you know, upper middle class kind of like Tesla driving nerdy. I never noticed that about me either. You know, Tom, you never know said no,

Speaker 1  29:03  
no, we're not at all folder. Right. Turn arrogant about it. Yeah.

Jeff York  29:07  
Zero arrogance. Anyway, we make those connections. I mean, that's really powerful, right? Like if you can cut across to like, different demographics. And normally don't think about sustainability and somehow combine it messy. I mean, yeah, I mean, it's a real problem. Like,

Katie Wallace  29:26  
I think that we, well, there's a couple of different topics within that. And one is just like, doing the right thing of spreading around economic Yeah, the flow of money, right, and power and influence and being able to support some of the amazing people we support in that and what they're doing in the world to make a difference. And the other part of it, too, is like being able to talk about climate change in a beer ad, right. And like, so what we always say with the Fat Tire team, and we say this together, it's like, let's keep it in the beer zone. Right there. You can only with Stan, it's so much earnestness when you're talking about thinking about beer and hearing it like climate change. And so then you'll see like in our social media that a lot of what we talk about is in the short explainers that are kind of punchy and light hearted and we try to, you try to really honor the beer zone, knowing that that's the relationship we have with people that we speak up to.

Jeff York  30:15  
Ya know, I mean, reminds me a lot of Aspen's strategy around this of like, you know, we're not going to talk about climate, in a sense of like, be raiding people and making them feel bad. We're going to talk about as, hey, you seem to like skiing? Wouldn't you like to do something to make sure that your kids can ski too? I mean, that's the thing. You guys have a partnership with, protect our winters?

Katie Wallace  30:34  
Yeah, we love them for that.

Jeff York  30:36  
Yeah, I think they do a great job predictor, whereas ferry listeners aren't familiar is, is an NGO that really is built around started with this new sports, professional athletes community of talking about bringing their voice to bear on addressing climate change, and future sports. And now they've expanded into a lot of outdoor areas, mountain biking, and trail running and things like that. And I think that's really important. Like, you know, it's not like, Hey, you should really feel bad and like, not buy anything, and live in a cave or something like that. And you know, only beansprouts more like, Hey, you liked snowboarding, you like skiing, maybe you should do something about protecting, and I even

Brad  31:15  
look at it, maybe even a more simpler term, you respect your audience, you respect your customers and respecting customers. That's what we should all be doing. The messaging coming out of Katy is not just for the beer industry, right? You have masterfully maneuvered the business. It's your practices resonate into many other industries beyond beer, all the way down to though number one, it's be authentic, and was authentic when it was in the basement of your founders house, when they were doing the engineering to recapture the steam. And that type of spirit, though, has lived on all the way through an amazing acquisition to an international company. You've been able to keep that. And I think that aligning those values with your, with your partners in Asia, I mean, just this is a great story. This is like you're making my day. Because these are things that

Jeff York  32:14  
brands is really bad mood. Near the beer,

Brad  32:18  
I don't know it's you because because online.

Jeff York  32:23  
Just gotta make sure I get that in there for Yeah, that was a great, I mean, it was a great actual insight, I just want to make sure that, you know, the authenticity, I think far too often entrepreneurs talk about their customer to the extent they get away from being authentic to themselves. And I think it's far better to stay authentic to yourself, and you will track because

Brad  32:47  
after meeting Katie, for what, half hour now, this is not fake? Well, no, this is who you are. And this is I mean, that's the beauty about this. And I'm imagining that your team is like that. And the other teams that interact are like that, and you retain employees because of that. And I think it's just I think it's all it's all working in for me. I mean, I'm having a moment of flow here where you can kind of see around the corner a little bit, it makes total sense, and just keep doing it. Thanks. Thanks.

Katie Wallace  33:16  
I mean, I think that like when you're saying you're doing this, and you know, who is that you is that we break down. And sometimes it's people a small number of people with very limited perspectives that are in a marketing room or an executive room, making some of these decisions. And I think that one of the beautiful things that I learned from Kim and you know, growing up professionally, you know, being able to witness her leadership was really the the you is everybody, right? And so how do you really, that's great when you're 40 people, and you're going to take a vote, making it make a vote on like, do we want to give up profit sharing to bring wind power, but it's different when now you're 1500 people? And how does that look? And how do you not just get scared of asking everybody what they think. And so, so when we we actually acquired Bell's brewery, and we brought coworkers? Yeah, we did. Yeah. They're awesome. We love that. Yeah. And we, we all work together. Yeah. That was close by Kalamazoo. Yep. And so they, so we actually, you know, now with well, over 1000, co workers brought dozens of co workers together to say, what are the values now? What's authentic to us today? What are we going to keep from the past? That is a legacy and it matters still as relevant today? What do we need to change based more on more voices at the table, and more awareness of each other in this day and age, and then also like the world, the world is changing, right? It's changed. And so we had a really cool process where our co workers came together, and they just hashed it out together. And so our new core values were written by them. Right. And so So I think that that part, that's hard work, and it's scary, I think, for a lot of leaders to open the doors to say, I want to hear from everybody because many when we talk to leaders, they think, well, I'll just have to do what everyone says and I can't please. Right. And so I think if you take the entrepreneurship entrepreneur in mind to this and say there's still going to be a way to do this right? Well figure it out. And even as we're growing and changing, and how do we keep the spirit of this, and I love that example of how people have come together. And we really tried to do that we have a lot of avenues where we're rebuilding them and, and scaling them for who we are today where people can still share their voice no matter where they are in the organization. They're driving a forklift, or on a packaging Hall. There in the beer, the uniform be better. Yeah, everything's and they all have really cool ideas. So anyway, so that's, I think that that's something that you give the right framework and structure to it. And you can hear from people, but also keep it manageable for leadership, too. And

Speaker 1  35:33  
we've done this since day one. Oh, I know. So I'm also friends with Jen Vrba. And she comes to speak to my class. And they basically built the business, correct me if I'm wrong on three books. But beyond entrepreneurship, that one chapter of vision that provided structure, they formed the purpose and the mission did all the values. chop wood carry water? Yep. And the third one was leadership handbook.

Thomas J. Dean  36:01  
The Great Game of Thrones,

Katie Wallace  36:02  
the great game of business, of course, yeah,

Jeff York  36:03  
I was gonna set a new complete joy at home.

Katie Wallace  36:07  
Parts of it for sure.

Jeff York  36:10  
That to relax, don't worry. Yeah. But anyway,

Speaker 1  36:14  
when Jen comes and talks, it's because she was there really, really early. She just she just, it's the best story I've ever had on strategic planning. Like, they actually did kind of the strategic planning. Right? Because so offense done so poorly. Oh, yeah. Right, right. It's just management wants to do whatever. So they ask a bunch of people what they should do and does whatever they want. But here, it wasn't great. And and even have that vision, that early phase of time, when you're building a business to think about what you want the values to be what you want the purpose of the company to be. Yeah, yeah. Very

Katie Wallace  36:54  
common. No. And I think to just having like him being a social worker, when she started it, her whole job was like, how do I help empower you to this amazing life? And she saw many people contribute in that way. Right? And so like, yeah, how do you bring people to their best? So I

Brad  37:09  
don't? I don't know Kim. And I would say it's more than her being a social worker, though. I think this is something that was ingrained with her. Sure. Right, well before social worker, and so it's her personality that came through. And that's, that's really cool.

Katie Wallace  37:21  
Yeah, she grew up in a Quaker background. And so yeah, so that everybody's voice matters. And so so many of these wonderful things, she was a bus driver for a while, right? Like all of these cool things about her came through, and this mindset that like people's voices matter. And I think, you know, getting into like the great game of business and whatnot, like, she wanted to include people's voices. But when they were bringing ideas, it was just completely irrational as it related to the finances, right. And she's like, what you don't. So then that's when she's like, I want to teach you about the finances so that you can actually be well enough informed to bring ideas forward that actually work for the totality of the business. And so that's where open book management came in. And then when open book management was there, she felt a little weird that everyone's like, Oh, and this is what you take home. And this is what I take home. And that's when she decided to start sharing ownership and do profit sharing to help people be a part of that. I

Jeff York  38:11  
want to talk about that. Next. What's What's this third beer we have here? Well, it's

Katie Wallace  38:15  
December and this is one of my this is my most enduring favorite beer if New Belgium 1554 Black lager. Whoo. Cheers. There's

Brad  38:25  
a new one for me. Happy Holidays and Cheers.

Katie Wallace  38:28  
Oh, yeah. Jeff gets you. So I love I'll start with a story of where this one came from. We were just talking about Kim and Jen and all the early days. One of our early coworkers was Phil Bernstein. And he he's a renaissance man, but he you know, played in jet he was in the Navy and played in jazz clubs, and underground Chicago, and they came here and brewed beer. And now as a National Geographic photographer, you know, kind of has done it all that he he got really interested years ago and the stories of absence from like, you know, several 100 years ago, where the what he was reading about, you know, and what people were feeling from that is not what you experienced when you drink Absinthe today. So he went on the hunt for these like old recipes and these ancient books in Belgium, and across Europe and, and ended up finding this recipe for a black lager, which is, you know, the Belgian say, we don't do that we don't we don't have dark lager or dark beers. And, and so then he found that recipe, dated 1554. And from that year had a had someone translate the ancient dialect of Flemish to interpret it. And so it's a very unique beer, right? It's like this dark malt and it's roasted, it's got all those nice flavors, but it also has a lager yeast, so it has a crisper finish and it doesn't it's very different than a stout or Porter. But this is my all time favorite beer. And we don't do a lot of marketing around it, but it keeps growing and growing on its own Flexity

Jeff York  39:52  
of it for a lager is like there's like all these flavor profiles that come and get like that. black patent Bert, kind of on the front end But then it kind of I think the logger use like softens out you to get all those other esters and stuff. Usually we get like an established reporter. It's just kind of a clean, you know, cut off. So you get like the complexity without like, the things that Brad doesn't like where?

Brad  40:14  
Yeah. Right.

Katie Wallace  40:18  
Yeah. But then you know, a lot of people that don't like beer, but they like red wine, and they love this beer. And I tend to drink it mainly in the winter, but sometimes you

Jeff York  40:29  
just have one more actionable insight. I lost my timer here.

Brad  40:33  
You can drink beer in the summer and winter, no.

Jeff York  40:36  
Episode as soon as possible.

Brad  40:44  
Video UNFCC.

Katie Wallace  40:46  
You know, I can't say I know my way around it very well. I did try it in Eastern Europe. Because when I went there, didn't didn't have the experience they talked about in the old books, you know, you know, as Peter BlueCard and Phil Ben Stein, they'll tell you all about it. Okay.

Jeff York  41:01  
So employee ownership like but New Belgium has been one of the few employee was ever was a co op at one point or an employee owner was

Katie Wallace  41:13  
a bit it was a coop is technically a little bit different. There was a phantom stock plan that was a little bit more flexible. And then I think it was 2002, that we switched over to an employee stock ownership plan, ESOP.

Jeff York  41:26  
An ESOP. And then how did that happen?

Katie Wallace  41:29  
I think, you know, there were some changes to the rules on phantom plans, but also we were growing and that wasn't sustainable, sustainable model as we grew. And so the National Center for employee ownership is a wonderful advisor for any companies that are considering any level of employee ownership and guided us towards towards that decision towards an ESOP. And then I think, you know, we were 36% ESOP, 42% ESOP after Jeff left. And then when Kim was thinking about succession planning, then we went to 100% ESOP. And it was this moment where she announced I sold the company, and like, check under your chair in an envelope so that you can see who I sold it to. And you pull out the envelope, and there's a mirror. And that's when you know, and I would say, like, you know, now we're pretty cool. Yeah. And today, you know, when we sold to Karen, nearly $200 million, were paid out to hundreds of families that had worked here driving a forklift their entire career and accounting and parent pouring beers making beers and so, so yeah, there's really, really beautiful story to it. And I think also, you know, 100%, employee ownership for an asset heavy business and a more volatile market, like we've been in lately is probably a little precarious because it's hard to go raise funds. But then, but there's something you know, partial ownership, or it just really is built into it's a big part of what informed our culture is having a voice about the Green Bay

Brad  42:45  
Packers of beer? Yes.

Katie Wallace  42:46  
I love the Green Bay Packers. And also because my grandma was a fan, and she like, with merch. Yeah.

Brad  42:59  
Your beers? Oh, my

Jeff York  43:01  
gosh, Katie, it has been awesome talking to you. And thank you for taking us through these beers and a little bit history on New Belgium. We're going to come back next time. And we're going to talk about Tom's paper and how that relates to the story we just heard. We hope you'll be able to hang out with us. Maybe I want to grab a ball that lavender sounds amazing. I think Brad, you buy that for Christmas presents. So thank you very much for listening. Once again, we're at New Belgium Brewing Company. And we will be back in the next episode to talk about Professor Thomas J. Dean's paper and how it might relate to this conversation. Once again, my name is Jeff York. I'm the Research Director at the Deming Center for Entrepreneurship at the Leeds School of Business joined by my co host.

Brad  43:41  
I'm Brad Warner and Jeff, this has been fabulous. We've learned a lot of great stories. It's very, very cool. I'm just it's still resonate, resonating with me what impact this business has had on you the conference, which is great time, I'm sure can fill us in on that, Katie. Thank you, Tom. I

Jeff York  44:00  
look forward to it's good to see something besides beer lift. Brad spirits is very excited. Yeah. Yeah, right. Yeah. And I'm beholden to say, if you liked the podcast, click subscribe. Do it on iTunes. It's really fun to do, or Apple or Spotify. Wherever you get your podcasts. Click subscribe.

Brad  44:18  
By the way, the guy from Nigeria the prince he's still he's still he's still emailing me. Some negotiations, right? Yeah, but if I send him 10,000 bucks, I'll get 10 million. But as

Jeff York  44:30  
you're thinking about that second mortgage, so you can really help. Oh, of course, it's gonna be great. Oh, look forward to

Brad  44:35  
talking about our biggest fan. Tom's paper.

Jeff York  44:37  
Brad's wise investment he's doing the prince of Nigeria. We'll be right back with that. Thank you. Thanks for joining us.

Stefani H  44:44  
We hope you enjoy this episode of creative distillation recorded on location at New Belgium Brewing in Fort Collins, Colorado. Learn more and order merch at New belgium.com We'd love to hear your feedback and ideas email us at CD podcast@colorado.edu And please be sure to Subscribe to Creative distillation wherever you get your podcasts. The creative distillation podcast is made possible by the Deming Center for Entrepreneurship at the University of Colorado boulders weed School of Business. For more information, please visit deming.colorado.edu. That's d m ing and click the creative distillation link. Creative distillation is produced by Joel Davis at analog digital arts. Our theme music is whiskey before breakfast performed by your humble hosts, Brad and Jeff. Thanks for listening. We'll see you back here for another episode of creative distillation.