October 16, 2014 | In this Wrigley Lecture, Kim Jordan, CEO and Co-Founder of New Belgium Brewing Company, speaks about how her 23-year-old brewing company is creating a vibrant and rewarding work culture that enhances the bottom line.Related Events: Brewing Sustainability
Christopher Boone: It is my distinct pleasure to welcome you here on behalf of the School of Sustainability and the Julie Ann Wrigley Global Institute of Sustainability. This Wrigley Speaker Series is meant as a forum for bringing in really renowned thinkers, but also practitioners who are moving the needle, bending the curve, what other phrase you want to use.
But the point is, we're looking for people who can be inspiring to all of us through their actions and through their words. And one person who has been very inspiring to all of us through her actions and her words is a very special guest. I think for the, maybe for one of the first times ever, we actually have Julie Wrigley at a Wrigley Speaker Series. So it's my pleasure, please put your hands together for a wonderful and great individual who's meant so much to the School and the Institute, Julie Ann Wrigley.
Julie Ann Wrigley: Well, forgive me, I have a few notes at this time. I'm a late intervention here. First of all, welcome. This is the first Wrigley Lecture for the fall semester. It was started in 2007. And in the past seven years we've hosted speakers from all over the world, every continent except Antarctica. We'll get there.
And world-renowned thinkers and doers in sustainability. I actually have been a fly on the wall in two. Jared Diamond was an early speaker. And Ray Anderson, who if you don't know much about him, please look him up. He was my mentor and the godfather to many of us. He passed away and now there's a foundation carrying on his work.
Anyway, I am honored to be able to give a small intro to Kim Jordan. And she was chosen to participate with this illustrious group of speakers because she's a leader not only in the corporate world, but in many other parts of sustainability. Their corporation is working to implement sustainable principles not only throughout the business, but in creating a rewarding work culture to enhance the bottom line.
And I'd like to say a special thanks tonight, to introduce you to Osvaldo Sala, who nominated Kim to be the speaker this evening. And he'll tell you a little bit more about her background. And I think we're all in for a treat this evening. Thank you.
Osvaldo Sala:Thank you, Julie. We are all very fortunate today to have Kim Jordan with us. We are really lucky. She is a person who has an extraordinary vision to put environmental, social, and economic sustainability under a common framework. And she has a progressive mind.
She is the founder and CEO of New Belgium. So you probably have tasted Fat Tire many times. She is an extraordinary leader. She has received numerous awards, from the 2003 Beer Executive Prize to Oxford University in the UK, who gave her an award.
She in on numerous committees. She is part of the scientific board of our sister institution in Colorado, Colorado State University School of Global Environmental Sustainability. She is part of the Colorado Governor on Renewable Energy.
She's an extraordinary person. I'm not going to use more of your time with her. So Kim, thank you very, very much for being with us, and you're welcome.
Kim Jordan: It's always a bit embarrassing when you get such glowing accolades from such esteemed people. I want to start by making sure that I thank the people who not only invited me here, but also ASU generally speaking. You guys have been wonderful, warm, and accepting.
And we're going to hope that fixes itself here soon. I have a big voice, so I could talk to the back of the room without this if it's necessary, but we'll see here.
So Lauren, and Leslie, and Cassie, and Maggie, and Osvaldo, and Dean Boone, and of course last but certainly not least-- she and I were talking about her height-- maybe shortest. She was going to win shortest, Julie Wrigley. Thank you all so much. And thank you to you guys, because you could be doing a lot of things this evening. And I really appreciate it that you came to spend time with me.
So I want to tell you a bit about New Belgium Brewing Company. I'm going to start by talking about our history, how we got to where we are, what our practice entails, including open-book management and employee ownership, high-involvement culture in the work that we do and how that work has grown, and what we've learned as we've gone along. First I'm going to give you a little taste of who we are here.
Back in 1991, people thought we were crazy to quit our day jobs and open New Belgium Brewing. They said Fat Tire was a weird name for a beer. And being 100% employee-owned and environmentally-conscious would never work. The world is full of people who like to say, you can't do that. And for all of them out there, we have one thing to say-- want a beer? Fat Tire Ale, from New Belgium Brewing.
So part of the reason I show that is to give you a flavor of who we are. Everyone in that commercial works at New Belgium. And the director was Stacy Peralta. I don't know if you guys are familiar with-- his thing is subcultures and the communities that they create. Lords of Dogtown and Z-Boys were two of the things that he's best known for.
All the guys at New Belgium who were skate punks in their younger days were like giddy school girls. He stayed with us for about 10 days. And he said recently that he would like to come back and film a short film. So that's pretty exciting for us.
So I want to start by setting up why is it that we do what we do. Would you guys like me to make some changes to my mic? No, OK. We're gonna have this weird thing. You're going to think you're drinking beer even though you're not, because of the way I sound here.
So at New Belgium, we think that business is perhaps the perfect vehicle for change, both socially and environmentally, in the world. There are great concentrations of material resources, enthusiasm, intellectual vitality, and not to mention heart, in the world of business.
We have intractable social issues, intractable environmental issues. They're big issues. And we think that business has a really strong role to play in this process.
So as long as we are not ignoring our externalities and we are solely focused on the bottom line, we think that the work that we can do really adds to the body of knowledge. And also Julie talked about doing, the doing of things that need to be done so that we can make change in the world.
At New Belgium, we think these three things-- people, planet, and profit-- are interlinked. So we are successful not in spite of these three things, but because of them. In order for us to be successful with our coworkers, we also need to be sure that our strategy involves profits, and it also involves how we show up in terms of our impact on the planet.
And those three things are tightly interwoven. We're very comfortable with that, because we think that they work in sync with one another. And the grouping of the three is what makes the whole the most strong.
I'll use sustainable business role model, triple bottom line, the three Ps of people, planet, profits. And all of those are essentially ways that I express the practice that we have at New Belgium.
In the last, say, 25 to 30 years, there are a lot of business people who have come to this happy realization that they have companies who create profits. And they can use those profits to make the kind of change that I've been talking about. You think about Yvon Chouinard of Patagonia, Gary Hirshberg of Stonyfield Farms, Gary Erickson of Clif Bar, people who have said I come from the '60s, I'm really interested in this notion of social responsibility and environmental calculation to make sure that I'm really taking this into account in terms of my bottom line.
So it was natural for us to move into this space and to really think about how we could be role models in this regard. I think a really interesting one that Julie mentioned is Ray Anderson. Because if you've never met Ray or saw him speak, he is the perfect epitome of the lovely southern gentleman who just stepped off of the golf course. And you would never see immediately at first blush that this was a man who had a life-changing event about the impact of his business, which is carpet.
And you think carpet, whatever, but when you think about the miles and miles and miles of carpet in the world, a fairly toxic manufacturing process, he had an epiphany about how his business impacted the world. And he set about some serious work to make change. So I kind of started with the hippie side of the equation if you will. But clearly there are lots of people in business who are saying that this matters to me.
So at New Belgium, my then husband, Jeff Lebesch, and I started the brewery in the basement of our house. And I would say that that was probably half of the square footage of the stage up here. It's one of those classic American success stories.
It always is a tiny bit embarrassing for me because we took a second mortgage out on our house. We maxed out all of our credit cards. I was a social worker, Jeff was an electrical engineer. They do not send social workers things in the mail that say, you have been preapproved for a $10,000 line of credit.
But in those days, in 1991, they did send those to engineers. And we filled all of those suckers out. I used to give a speech that was called, "Visa Has Been Very Good To Me." Because that was really how we capitalized our business, between the second mortgage and all the credit cards.
We named it New Belgium Brewing Company for two reasons. One, Jeff took a bike trip through Europe and tasted a lot of beers in Belgium that he really loved. And he really began to understand that Belgium has a rich brewing heritage.
Brewing is to Belgium what wine is to France. It's very regionalized and specialized. And they take a great deal of pride in their brewing heritage.
So he came back to the US, we started dating. He made a beer that he called Fat Tire, which at that time was a nickname for a mountain bike. And he made it as a home brewer.
And we were getting serious. And we decided we were going to do this both marriage thing and brewery thing, and they were really conflated. We got married in September and broke ground for the brewery, which was attached to our house, in March. And started selling beer by the end of June.
So we were the first brewery in the United States to specialize in those styles. In fact, for the first three years that we sold beer at the Great American Beer Festival, not sold, took beer there for judging, our beer was never judged. Because they didn't have any categories for Belgian beer. So I'm sure they were part of the staff after-party that they have. But there was no judging involved there.
But before Jeff and I ever made a barrel of beer, we went on a hike in Rocky Mountain National Park to talk about what this baby company was going to mean to us. This is the social worker side of the equation. Jeff was very good at devising recipes and building equipment, but I said, I just have this feeling it's going to be really important that we kind of get some clarity or alignment between us about what's going to matter to us.
So we went on this hike. And we said we were going to produce world-class beers. And we were going to promote beer culture. And we were going to be environmental stewards. And we were going to have fun. And when you think about that, we had not yet even made any beer. And we were going to produce world-class beer. And that's sort of ridiculous in some ways. Except that you know what? We now produce world-class beer. And this is one of those lessons about you sort of have to decide what's going to matter to you in order to get where it is that you want to go.
And so this codifying what we stand for and using it as our map as we pioneered our way through the business and beer landscape, has been absolutely rock-solid fundamental to who we are. And for those of you who are in business, contemplating business, in B-schools, in sustainability work, who are thinking about you next big gig, I would implore you to think about making sure that you really have a solid map that sits at the very core of who it is that you want to be.
You'll notice in this, however, that there's nothing about our customers. And there's nothing about our coworkers. That's because at this point we didn't have customers or coworkers. And it didn't occur to us, I'm embarrassed to say, that maybe we ought to be thinking a little more broadly about people that we were going to be interacting with in the future.
But this is what really informed who we are, especially in 1991. That hike in Rocky Mountain National Park was our first retreat. It was just Jeff and me. Since then, we've had a retreat every year with all of our coworkers. I have a couple of my coworkers here in front. And we had a retreat in the beginning of September. All 580 of us, we are master's of the clipboard. Because they're always outside.
And we have different groups that you go to. The board gets together. And then our management group is called missionaries. And we talk about what are the things that we really want to hear about from our coworkers in the coming year.
Because we practice at New Belgium what we call open-book management and high-involvement culture. In 1994, I read a book by another kind of mentor and pioneer, Jack Stack, who is the father of the open-book management movement. And what his company manufactures is absolutely not sexy at all.
They recondition diesel engines and springs parts and that kind of thing for trucks in Springfield, Missouri. It's called Springfield ReManufacturing. But years ago he came up with this notion that if you work with your coworkers to really make transparent the "game" of business that there is real power in that.
And I read this book in 1995, '94 or '95. And I thought, I don't know. It's Jeff and me that own this. We had given a 10% pot of equity to one of our coworkers for sweat equity, because he was the reason that Jeff and I could go on the same vacation.
So I gave everyone a little quiz at our retreat. I said we took in $100 in revenue, and we had to buy raw materials. How much we had to pay for labor, how much all the other things that a business has to have was kind of the third line item, how much did we spend there. And thus, how much money do we have left over?
And the average answer was that we had $60 of that $100 left over. And when I speak to business groups and I say that, they all start laughing and slapping their thighs. Because if you are looking at a P&L very regularly, you know that a 60% net profit is something you would nearly kill for.
So the learning for me was that the stories that they're telling one another about what's going on in this business are much more exciting than the reality of the thing. And so we kind of just ran and jumped off the open-book management cliff. We are a manufacturer, so we have a wide swath of semi-skilled labor all the way through PhDs in microbiology. And we started working on financial literacy and really asking people to be a part of the business, of running the business.
So we went along doing that. And then I heard someone speak about employee ownership. And they said opening the books to employees but not giving them any equity is a bit like inviting them to smell the dinner but not letting them eat.
And I had been thinking about that notion of broadly-dispersed equity. And for me, that was kind of like a punch in the gut, and really did not suit my kind of liberal leanings. I was raised in a fairly liberal family and have a fairly prominent Quaker influence in my life. And that was another one of those jumping-off points where I felt like it was going to be really important that we shared equity.
So we started with a 10% pot of equity that was a deferred compensation plan. It was completely a gift from Jeff and me. And then we moved along in 2000 to an ESOP. Because IRS laws changed and S-corporation was allowed to have an ESOP.
So then we went to 32%. The company and I bought Jeff's shares back from him. He had kind of not been involved in the company since about 2000. We bought his shares back, so that lowered the denominator. So then at that point our coworkers owned 41%.
And in the beginning of 2013, my boys and I, and my management coworkers who had a small pot of ownership, sold all of our shares to our coworkers through an ESOP. So we are now 100% employee-owned, which has been just remarkably wonderful for us.
We were well-suited for it. We had laid the foundation for that through open-book management, through high-involvement culture, through a high degree of transparency.
Our coworkers can see the strategy, they can see the financials. They know where the money goes. We review all that we're doing in our monthly meeting. And then we ask them to kick-off our annual strategic planning process.
Another thing we've done with them over the years, we had those four core values and beliefs, but that was kind of it. And we said, we kind of need to put some meat on this framework. And so we used the Collins Course Model for Visioning. Which is neither here nor there. It is Jim Collins, before he was famous, a book that he wrote called Beyond Entrepreneurship.
And so the whole thing we call our vision. And inside of our vision is our purpose. It's the guiding star, the thing that we can't ever really achieve, but is always the direction that we're headed in. And at New Belgium our purpose is to make our love and talent manifest while making our customers' favorite beers and proving that business can be a force for good. And that's really what guides us.
And then we took another stab at our 10 core values and beliefs. Because we felt like maybe customers, or a few other things that we thought were important, needed to be included. And so again, at one of our retreats, our coworkers came up with this list of core values.
Another thing that we've done in the last, gosh, year and a half, two years, is to-- we've been involved with B Corp for a long time. But we did a lot of advocacy in Colorado to try to move that legislation forward. We've not crossed the finish line. The legislation will definitely be enacted, but the Secretary of State has been wrangling with legislators a bit. It's a frustrating story more than anything.
But one of the things that that did for me, as a founding, majority-selling shareholder, was to say, OK, we're going to set up these blocks of things that help the perpetuation of New Belgium to happen in a multi-generational way that's consistent with our ethos and consistent with what matters to us.
And I think we'll be talking a little bit about B Corp in the Q&A section. But suffice to say, B Corp is a way that boards of directors can make sure that they're taking into account a broad array of stakeholders. So that's the planet, the communities where we do business, it's our coworkers, it's our customers, and it's also our share value, our shareholders. Who also happen to be our coworkers. So that's been a real helpful tool for us in our evolution going forward.
We've also made sure-- I said that all of our coworkers can see where we're going-- all of this is very transparent. We have this process of working through the strategy with all of our coworkers every year. And so the thing we've learned about that is getting one language.
Which is why I told you what our vision is, what our purpose is, our core values, of course, are how we're going to behave as we're carrying out our purpose. Our mission is the thing that we're going to do over a particular band of time that really is a stretch goal for us. And one of the things that we know is when you have one language for that, and you use that religiously, you really can streamline and align everyone's work.
Because you're not trying-- wait a minute, your purpose, my goals, your objectives, my core values. That language tool is a really important one, and not unlike my first one about core values. It may seem silly, but it's really not. It's an important piece. Whether it's in your kind of founding documents or in your day-to-day work, getting everyone aligned around language is huge.
I'm going to move a little bit into environmental things and also into leadership here. This is our first brew house. Is there a pointer on here? No, OK. So you see up in the upper left-hand corner, that thing that looks like a galvanized trash can. That's because that's a galvanized trash can from Ace Hardware.
So inside of that galvanized trash can is a copper loop. And in the copper loop runs cold water, when we were using this system. So the excess sort of waste heat from the process of brewing goes through-- that copper tubing is wrapped around the stack. This is actually, it's moved. The rest of the stack would have gone up to the top of the picture.
This is our brew house two. This shiny thing that heads off to the right and then down is also a heat exchanger. When we worked with engineers in Germany, we really had to convince them that this is something that we wanted to do, actually on our brew house before this one. And now it's something that they offer kind of in a standard way.
So we're back to our very first brew house here. And the lesson for us is that leaders need to make choices that are consistent with things that they say matter. Because every time you say, this really matters to us but we're going to do this over here instead, you really telegraph, really solidly, and imprint on people's hearts and minds, that it really doesn't matter.
That we say all those things, but we're not actually going to do them. And then it's really difficult to have people have the sense that what we believe, and what we do, and who we want to be are all pretty congruent.
In addition to our heat exchange, we've spent-- I was talking with people earlier today-- oh, nearly $20 million on an aerobic process water digestion process. We have two of these bubbles. And essentially what happens is the process water-- this is brewing process water, not black or brown water.
That goes to the anaerobic digester. There is leftover nutrient from the process of making beer in there. There is an ecology in there all its own. It creates methane, which is captured in the bubble. And then it's shipped back to the brewery.
So we send water to the city that is very, very clean. We've chosen to not send it to the river, because we have this fear that someone will make the inevitable mistake and things will go badly. So we send it to the city's wastewater treatment plant.
But we're able to power about almost 20% of our thermal and electrical energy from this process of capturing our process waste water and extracting the nutrients out of that. Which I can sort of geek out on these things, but I think that's a really elegant solution. This is a big Ray Anderson thing. Any time that you can take the, whatever is sort of waste from the last process and use it in the next thing, that's a really elegant solution. So we were pretty excited about that.
We also started an internal tax on ourselves. We used to be part of a wind power program. And the city, for good reasons of their own, really switched more to RECs, Renewable Energy Credits. So essentially they're buying and selling paper about renewable energy.
And we just thought, we weren't sure the quality of that was really with the intent that we wanted. So we take the money that we would have spent on that, which is a surcharge of about a third of the total cost of the energy. And we save it until we have enough and then we put up a bunch of solar panels in this particular case.
And so this is the largest privately owned array in Colorado. And we decided about a month ago that we're going to put up another one on another building. That project will be starting sometime soon.
So we were going along, ad hoc doing these things because we liked it and they were fun. And we thought, maybe we ought to get a little more organized here. So we gathered a group of our coworkers from across the company and we put together what's called an SMS, or a Sustainability Management System.
And we looked at what are the big problems in the world, and what are the big problems in brewing, and what are the big problems at New Belgium? And kind of narrowed all of that down to give us a sense-- we'd already picked the low-hanging fruit. And we wanted to really sort of understand, across the brewery, broadly through our coworkers eyes, where the other issues were.
We do this in 2007. We've done it every other year since. And we published it, as soon as we got the study back, on our website. Because we wanted our brethren in the craft brewing industry, or other people who might be interested, to be able to learn from some of the things that we did.
And then we did a life-cycle assessment of a six pack of Fat Tire, so that we could really understand the carbon impact of that. And we published that as well on our website, for again the same reason. And we talk about that a lot at industry events.
So then another thing happened. Which was we realized we could really free ourselves up to admit that we had gone this far, but there was this far to go. And so we kind of decided we were going to just say, yeah, we have an impact in the work that we do. And here are the things we've done, and we still have so much more to do.
And the lesson here is that there's always more to do. It's always a process. There's not an end to this. Whether it's with our coworkers, or communities, or the work we're doing to mitigate our impact, or work we're doing up and downstream in our supply chain. This really freed us up.
We didn't feel like we needed to say, yeah, sometimes it's not so great. We could say, here are the big areas and this is what we're working on. Which then led us to say, OK, we've done these things. How about some advocacy? We could do that too, right?
So we started advocating first around healthy watersheds. In some areas taking down dams, in some areas trying to prevent dams going up. Talking about, especially in the West, the Colorado River basin, which is the lifeblood for all of us who live in this part of the world.
And we funded, along with some other organizations, a program to work on the Colorado River from its headwaters, which are actually west of the brewery in Fort Collins, all the way to its theoretical end, which is in the Gulf of Mexico. But it doesn't go there anymore.
It's had a few moments where it's made it there. And it may someday. People are working on agreements. Not New Belgium, but people in this space are working on agreements to perhaps have the Colorado River eventually flow back to its eventual end. Which is the Sea of Cortez essentially.
So I'm now moving more into the people space here. This is one of my coworkers, Lauren Salazar. She started out at New Belgium as a part-time administrative assistant. And she said, you know, I think we could do something with this sensory idea. And she is also trained in social work.
She started looking into sensory programs and how are they done. We have an outside organization called VLB. They're from Berlin. And all they do is audits of breweries big and small, all over the world.
And the last time they were with us, they said, we go to Molson, we go to Heineken. We go to breweries big and small all over the world. And we have never seen a sensory program that's as sophisticated as yours.
So we had someone who was naive and said, I'm going to try this thing. And we said, that sounds like a really good idea. And she's working in other parts of the brewery now. But it's really important to say yes. And when people have this energy that's sort of bursting out of them, to figure out how you can help them really help the brewery and also bring their best intellectual curiosity and heartfelt vitality to the whole experience.
We also think at New Belgium that ceremony and ritual are really important. We have a twice a year ownership ceremony. I make them "Mojos" which is a little token of our appreciation and that sense that you've entered our tribe. When someone's worked at New Belgium for a year, they move into employee ownership.
We ask them to stand in front of their tribe and answer a question about what ownership means to them. There are three or four different kinds of questions. But they're all essentially in that vein. And then we break bread together. And we have lots of opportunity to be a family.
We have lots of opportunity to celebrate. And we think that ritual is the deep-rooted connection that's maybe even more for the weft of the fabric of community. And so it's important to us that we make sure that we have new celebration, but also celebration that goes back to the old, old days.
I'm going to come back to this one. No, actually I'll go ahead and do this one. I showed you a picture of Lauren earlier. She is also a master wood-aged and barrel-aged beer blender, highly regarded for that skill around the world. And we started making wood-aged beer in 1997. We hired Peter Bouckaert, who is from Rodenbach Brewery. If you're a beer geek, that means something to you. World-renowned wood-aged and sour beers. He came in '96, and she said in '97, I think we should make wood beer.
We said, that sounds like a really fun idea. Let's try that. And this is the thing we do. It's an ancient art form. It matters to us.
We also make something here in the United States. And we employee people who want to work with their hands and their heads and their hearts. And this is another huge lesson for us, that we never want to lose sight of the thing that's central to who we are.
This was the slide I was going to go to and then come back to that one. I was talking about our ownership ceremony. So we do this thing. And now we're getting bigger, and there are 50 people at one of these. And some of them don't talk for two minutes, they talked for 20.
And then you have the receiving line, because we're big huggers and we're big criers at New Belgium. And so the whole thing is starting to take hours and hours, half a day, for the ownership ceremony. So someone came up with this.
That is Tony Danza, yep. I have no idea why Tony Danza is the dude, except that it's in reference to the song, you know, "Hold Me Closer, Tony Danza." So now rather than have a receiving line where everyone hugs and cries, Tony Danza's great big arms come out and hug all of us all at once. So the whole thing takes less time than it used to.
I have no idea why we do this. I do. It makes sense. It makes sense, mostly. But leaders need to be sure they say yes. Because there are lots of opportunities to say, no, that's not my idea. That's not great. Tony Danza, are you kidding me?
And you miss the rich playfulness of life if you're not busy letting your heartfelt joy just jump on out there and say yes. And we spend a lot of time in this thing that we call work. I told you that our purpose is to be loving and to make our love and talent manifest.
The world needs more love and talent. And if you can't feel at work like the people you work with have your back and they care deeply about you, and you get to be your crazy self and come up with Tony Danza, or the naming of trash cans, or whatever, I think that's a problem. I think that's too bad. So when you're out there doing your thing, whatever it is, I think it's important to say yes and to sort of revel in the goodness of whatever it is that you're doing.
We've been giving back to the community through philanthropy since about probably 1993. We give a dollar a barrel away. And that's just in straight-up cash. So we're well over six million dollars. We have done more than that in proceeds, $100,000 for the Tour de Fat, and in-kind donations.
Lots of beer, lots of bikes over the years, because it matters to us. That's a part of being in the community and yet focusing on the things. We give our coworkers a bike when they've been with New Belgium for a year. And then when they've been with us for five years, we go to Belgium together. I take a group every year and it's big fun. So that would really give you a bit of the flavor of us. And I think I have one more film here.
[MUSIC - BAAUER, "HARLEM SHAKE"]
It was not Harlem Shake Day at New Belgium. No one said, be sure to bring your costumes, we're gonna, across the brewery, do Harlem Shake. Someone did, because apparently people-- But again, if you get an opportunity to have fun-- I'm guessing probably a few hours went into the sum total of that for those folks. And I think that's fabulous.
We work with a lot of people who are young. Because we're in an industry that attracts young people, and they want to have a life that's fun and isn't so nose-to-the-grindstone. And we're pretty OK with that at New Belgium. So the last lesson for us at New Belgium, kind of in conjunction with those-- we have a saying that our practice makes a splash, and events like this create ripples, or advocating or telling our story. So we think it's important to make ripples. And we also know that if it's not fun, it's probably not all that sustainable.
I would leave you kind of a last chapter in our story so far. And it's a nascent chapter, so we'll see where it goes. I'm really interested in the notion of regenerative capitalism.
And so my boys and I took half of the proceeds of this first tranche of the sale of the company to our coworkers, and we will take subsequent tranches as well, and started a family foundation where we will be investing in businesses who may want to do the kinds of things that we want to do, that are particularly focused on sustainable and local food systems, on livable, bikable, walkable communities, and on renewable energy. I blanked out there for a minute.
And so it will be a combination of straight up check-writing, grant-making philanthropy, as well as investing in these kinds of businesses. We're really interested to see how can we take what we've done and seed that kind of thinking in some other organization. It's closely tied with New Belgium in terms of our awareness of what we're doing and the work that we do together. We've said yes to that and we're excited to see where it goes.
So on behalf of my 580 New Belgium coworkers, I thank you very much for your time. And I'm excited to be able to answer some questions and hear what you're thinking about. Thank you very much.
Osvaldo Sala: Thank you, Kim, for an extraordinary talk. Thought provoking, it's wonderful.
Kim Jordan: Not everyone does the Harlem Shake up there.
Osvaldo Sala: So, the way we are going to do this to, be a little bit more organized, is that we asked you to email us questions. And we printed them out. And I'm going to start reading the questions.
Kim Jordan: I'm going to make up answers.
Osvaldo Sala: Yes, correct, that's correct. So this has been randomly selected. So the first question is with the rapid expansion of microbreweries, is there fear of a beer bubble, much like the tech bubble and the housing bubble, that collapsed and hurt those industries? What is the microbrewing industry doing to help make its economic growth sustainable?
Kim Jordan: We think about that a lot. And I'm on the board of the National Trade Association for Craft Brewers in the United States. And we think that there is no-- at this point, craft brewing is about 9% of the market. And we think there's no reason to think that it can't get to 20.
We think that the prevalence of small local breweries is a really great trend. I would say that I think quality is going to be table stakes. And that we will see some people fall by the wayside. I think we have a ways to go for that. As far as what are we doing as an industry to try to ward off some kind of a bubble that will burst, that's really capitalism and entrepreneurialism. And it's up to everyone who enters the game to put their best game on and do their very best work. And I don't mean that in a negative, like, we'll fight you to the death.
Because we're actually a really collegial industry with a lot of camaraderie. My boyfriend owns breweries in Seattle. And we spend a lot of time with brewers going on vacation, getting together to drink all kinds of crazy beers. So it's a great industry.
Our one concern among those of us who are a bit older is that new entrants will lose sight of that notion of camaraderie, I think beer drinkers like us because we're fun and we like one another. And beer is friendly. And I think it's going to be really important that we never lose sight of that.
Osvaldo Sala: We'll go to the next question. It's regarding New Belgium's status as a certified B Corporation. It was recently announced that Arizona businesses will have the opportunity to be incorporated and certified as B Corporations starting in January of 2015. New Belgium is clearly using business as a force for good. I'm hoping that you can tell us a little bit about the process of becoming a B Corporation, as well as the benefits of getting certified.
Kim Jordan: Sure. There are two pieces to B. One Is B Lab. Which is, I want to go through your process of measuring my company. And I want to tell you about what I'm doing with coworkers, and the environment, and political advocacy, and social justice, and the whole gamut of progressive business practices. And you can do that with B Lab and they will measure your business and certify it in that way.
The other part is B Corporation. Which requires that the Secretary of State of each state says, yes, we'll allow this status to come forward. We've been involved with B Lab for a number of years, and started to work with other people in the state on B Corp certification.
I don't know what your state's legislation will look like. I'll tell you in our state, the Colorado Bar Association had their own ideas of what this should be. And they said, we are going to have specific benefit corporation legislation. Which means-- I'm going to use an outrageous example-- we can be mediocre in lots of things environmentally, but we really love the idea of supporting the symphony. So we get to be a B Corp, because we give money to the symphony.
And we said, as people who were helping to advocate for this legislation, no, no, no. Because this isn't, I'm going to have a philanthropy department, or do a United Way drive every year. That's a bit like business as usual. We're trying to be disruptive in terms of how boards of directors look at this issue of helping to make an impact across a broad spectrum of issues. And so we were able to get general benefit. So I'm not sure in Colorado it's ever going to be called B Corp exactly, but it will be a very similar thing.
And for those of you in this audience who are working on that, it's pretty important. Because as soon as you water down the mark to mean almost nothing, guess what? It means almost nothing. And if we're trying to make some change here, really get out the bucket and not the eyedropper, it has to mean something.
And so that's been important for us. And one of these days, someone will go on to the stock market as a B Corp. I'm guessing it'll happen in the next six months, and that's going to be really fun to watch. Why?
Osvaldo Sala: No.
Kim Jordan: You know why.
Osvaldo Sala: I'll be watching. So the next question is, can you provide advice to women working as entrepreneurs in male-dominated fields?
Kim Jordan: Yeah, that's a tough one. I was actually talking with a woman about this the other day. I think that some forms of, let's just call it discrimination because it's a term we can all kind of get, are subtle, deeply pervasive, and longstanding.
I know men that I think are fabulous who have no idea that they've just said something that makes you think, wow, really? That's your perception? I don't take every opportunity to do something about that. Because I would be worn out. And because it can get to feel a bit like a grind.
And I think that it's important that women and men advocate around policies that help people and families both be able to come and do their very best work. And I would only add in addition to that that I think what we're looking for in leaders today is a mix of the masculine and the feminine. I know some men who have fabulous what might be considered feminine traits-- the ability to collaborate, to listen well, to really think about other people while they're also thinking about their own needs.
And I know women who don't have that. For me as a woman, probably considered a male trait, I like to win. I think winning's important. And I think leaders need to have both of those skill sets, generally speaking.
Osvaldo Sala:That's nice. So this is a more open question. What is the most surprising or unsuspecting fact about microbrewing or beer production that an average person wouldn't know?
Kim Jordan: I admit, I knew this question was coming. And I'm really glad for it. Because I might have been sitting here going, I don't know.
My answer is that Anheuser-Busch and MillerCoors employ approximately 24,000 people in the United States. And between them, they have probably 73% or 74% market share. Craft breweries, I told you we were up around 9% market share. We employ about 110,000 people. Which tells you that we're wildly inefficient, for starters.
But I also think it tells you that we're high touch and we're not losing sight of our craft. I just think that's a really interesting little tidbit. I hope you liked it too.
Osvaldo Sala: That's nice if you are looking for a job.
Kim Jordan: It's a burgeoning industry.
Osvaldo Sala: Another question is related, if you can explain your employee-owned business model, and how it was set up and how is it maintained?
Kim Jordan: Sure. I'm going to make sure I get a time check so I don't blab on and on.
Osvaldo Sala: I think you're OK.
Kim Jordan: So we have an Employee Stock Ownership Plan that is overseen by the Department of Labor. And if you think the IRS is something to tangle with, you should try the Department of Labor. Because they make the IRS look like pussy cats over there. Which is good. Because you don't want to have plans where, when people leave the company, it turns out really there's nothing in there and they've been sold a bill of goods. It is a tax-preferred status that is a trust. Inside of the trust sits all of the shares. And they're divvied up pro rata. So each person's percentage of the total wage pool is their percentage of shares that they get. And those shares are allocated to the trust every year. This last round of sale of shares is a 20-year pot of shares. So what should happen is that it's a perpetuating circle of shares. You leave the company, you're obligated to sell the shares back, or cash them in. And so then someone else later gets those.
Your basis is the share value when you started, the share value now minus the share value when you started. We have a trustee. She's from Chicago. She comes to our retreat every year, or every other year, to tell us what she thinks is going on. But every year she orders a valuation.
And a company comes out under her supervision and values New Belgium, so that we can set a share price every year. We do what's called a repurchase obligation. So we look at, OK, actuarially, how much do we need to be sure that we keep on hand for say, the next five years, to make sure that we can pay everyone who's leaving New Belgium.
It is a tax-preferred status. Which means that New Belgium doesn't pay corporate income tax. Each one of those shareholders, account holders in the trust, will pay income tax when they get those shares out of the trust into their own wealth, under their own control of wealth. They own the wealth, they own the shares.
It's not like it's make-believe. But until they leave, they don't get those shares. But that's where the taxable event happens. So part of what we're able to do with that is use that money in part to help fund this.
It's only a fraction of what funds the shares, but it's a way that the IRS and the Department of Labor looked at trying to make sure that more people in America retired with some wealth. Because right now, I think the latest statistics are something like only 10% of the population will have enough wealth in retirement to be able to live until the end of their days. Which is kind of alarming when you think about it.
Osvaldo Sala: Are there shareholders besides your employees?
Kim Jordan: No. The only way you can do that that way is to be 100% employee-owned.
Osvaldo Sala: So it's not traded.
Kim Jordan: No other shareholders. They're all in the company, these two and me.
Osvaldo Sala: We have time for a few more questions. What does the future hold for New Belgium? As a leader in sustainability, are there other initiatives or ideas you have in store?
Kim Jordan: Yeah. Well, we are building a brewery in Asheville, North Carolina. So that's a $140 million project. Woo hoo. We're on time and on budget so far. All of our equipment comes from Germany, and the euro is trending in the right direction. That's nice too. I told you I like to win.
And one of the things that I think is really compelling that I've been toying with is this notion of a cooperative, although I don't mean that in the legal sort of corporate structure sense of the word. But having a group of breweries across the United States that use one another's capacity, that maybe are co-owned among them, that have a similar kind of ethos for sustainability writ large and broadly. And that's something that we're kind of toying around with right now.
Osvaldo Sala: We are getting to the end of our time here. But I think we can squeeze one more question here. How can other large companies adopt a more sustainably-minded core? We're talking about here established companies.
Kim Jordan: I think that that has to start with leadership. Actually, it can start in both places. People can say, in this little piece of my work world, we're going to do these things because we find them interesting and compelling.
But sustainability with a big S really requires-- we were coming over here today and Lauren mentioned that the president of the university is really into making sure that you guys are moving the needle on renewable energy and sustainability. And the people who decide how the resources are going to be apportioned can make a big impact on what happens in an organization. So bravo to your president for that.
Osvaldo Sala: I think we got to the last question here. New Belgium has a huge bike culture. Why is that, and why is it important for the business model?
Kim Jordan: You know when you get on a bike and you have that joyful, little-kid feeling? We think that's a really important part of healthy communities. It gets you closer to the community, makes your heart pump, makes you feel like a kid, takes cars off the road, pollutes less, uses less fuel. We think that communities with a robust bike culture are dynamic, and exciting, and fun to be in.
And so in Fort Collins, we've really been sort of central to that. And I think it's made a huge difference in Fort Collins. And I think we like it for ourselves. We like to see it spread out into the community. We now have lots of parking spaces that, instead of having space for cars, have spaces to lock up bicycles. And we just think that it's a wonderful thing. That's why.
Osvaldo Sala: Kim, thank you very much.
Kim Jordan: Thank you so much. Thank you all so much. Appreciate it. Thank you so much.
This presentation is brought to you by Arizona State University's Julie Ann Wrigley Global Institute of Sustainability. For educational and non-commercial use only.