New Belgium and the Battle of the Microbrews

Jordan, in an Airstream trailer New Belgium keeps at headquarters Gregg Segal for Bloomberg Businessweek

By Devin Leonard

On a crisp October morning in Fort Collins, Colo., Kim Jordan arrives at work, as she usually does, on her red Italian bike. The chief executive officer of New Belgium Brewing is clad in jeans, a tight black top, and a flowing beige tunic that looks like something Stevie Nicks might have worn in her Seventies heyday. The ensemble suits Jordan, but it’s not enough to keep her warm. “I’m not dressed for this weather,” she says, shivering. She locks up her bike and hurries into the brewery.

It’s fitting that Jordan, still slim and girlish at age 53, should dress like a rock star. She is treated like one within her industry. In two decades she has built New Belgium into the country’s third-largest craft brewer, known for its flagship, Fat Tire Amber Ale. She is also one of the few female CEOs of a major beer company.

Lately, though, Jordan has felt overextended. She’s traveling constantly as she attempts to transform Fat Tire into a national brand like Sierra Nevada Pale Ale and Boston Beer’s Samuel Adams Boston Lager. In August, New Belgium expanded its distribution into Maryland, Virginia, and Washington, D.C.; its beers are now available in 28 states. Jordan hopes to select a site by the end of the year to build an East Coast brewery, which will enable New Belgium to extend its reach farther. The reasons for this latest push are twofold. If she wishes to maintain her company’s growth, Jordan has little choice but to enter new markets. At the same time, she faces an existential threat from both newer, smaller microbrewers and Big Beer companies that covet New Belgium’s customers. “I’m not sleepless about it, but I’m attentive,” she says.

The U.S. beer market has declined 7 percent over the last decade, according to IBISWorld, inspiring a wave of consolidations. Canada’s Molson merged with Coors. South Africa’s SAB consumed Miller. The two companies combined their U.S. operations in a joint venture called MillerCoors to better compete with the mighty Anheuser-Busch. Then three years ago, InBev, a Brazilian-Belgian conglomerate, swallowed the maker of Budweiser in a hostile takeover.

While America’s largest brewers have been suffering, craft brewers have provided one of the business’s bright spots. The Brewers Assn., the sector’s trade group, says the craft industry’s sales rose 12 percent last year, to $7.6 billion. Jordan and her peers now produce 4.9 percent of the U.S. market’s total volume. That number could double in the next few years as more Americans develop a thirst for homegrown ales. “Ten percent market share is not unrealistic,” says Julia Herz, spokeswoman for the Brewers Assn. “It’s just a matter of when.”

This has translated into enviable growth rates for individual craft breweries such as New Belgium, which define themselves as small, independently owned operations producing no more than 6 million barrels a year. Jordan says her company’s annual sales have risen an average of 15 percent; some of her smaller rivals have seen even more rapid increases.

The challenge, as ever, is to sustain growth in an increasingly crowded field. According to the Brewers Assn., there are now 1,829 craft breweries in the U.S. and 760 more in the planning stages. That means a flood of new beers for fickle craft aficionados, some of whom view older craft brands like Fat Tire as uncool. At the same time, companies such as Anheuser-Busch InBev and Miller-Coors have come to realize that if they want to boost their sales in the U.S., they must compete directly with the likes of New Belgium. They’ve tried before—and failed. Now they’re finally making some headway in this latest battle to influence America’s changing perception of beer.

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