Expert answer:New Begium Brewing Case Writeup
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Case 4 New Belgium Brewing (A): Social Responsibility as Competitive Advantage1
Synopsis: From its roots in a Fort Collins, Colorado, basement, New Belgium Brewing has always
aimed for business goals loftier than profitability. The company’s tremendous growth to become
the nation’s third-largest craft brewery and ninth-largest overall has been guided by a steadfast
branding strategy based on customer intimacy, social responsibility, and whimsy. The company’s
products, especially Fat Tire Amber Ale, have always appealed to beer connoisseurs who
appreciate New Belgium’s focus on sustainability as much as the company’s world-class brews.
Despite its growth and success, New Belgium has managed to stay true to its core values and
brand authenticity—the keys to its marketing advantage in the highly competitive craft brewing
industry.
Themes: Customer intimacy, competitive advantage, social responsibility, sustainability,
branding strategy, product strategy, distribution strategy, marketing implementation, customer
relationships
Many companies that are frequently cited as examples of successful businesses are large
corporations. However, the success of small businesses can be just as noteworthy, while often having
the greatest impact on local communities and neighborhoods. These businesses create jobs and
provide goods and services for customers in smaller markets that larger corporations often are not
interested in serving. Moreover, they also contribute money, resources, and volunteer time to local
causes. By serving these markets, small businesses are not only being socially responsible but are
also seizing upon a lucrative opportunity to sell goods and services to underserved consumers.
One such small business is the New Belgium Brewing Company, based in Fort Collins, Colorado. The
New Belgium brand has become known for two things: its high-quality, Belgian-style beers and its
commitment toward sustainability. Its socially responsible initiatives have contributed greatly to
NBB’s success. In fact, New Belgium’s business model has been so successful that it is increasingly
easy to find its beers around the country as more consumers embrace what the company stands for.
Studies have shown that the stock prices of ethically and socially responsible companies as a whole
outperform those on the S&P 500 index. Although New Belgium is not a public company and thus
does not offer publicly owned stock, it seems to follow this trend of success. The company has
become the seventh-largest brewery in the nation (and the third-largest “craft” brewery).
HISTORY OF THE NEW BELGIUM BREWING COMPANY
The idea for the NBB began with a bicycling trip through Belgium—home to some of the world’s
finest ales, many of which have been brewed for centuries in that country’s monasteries. As Jeff
Lebesch, an American electrical engineer, cruised around that country on his fat-tired mountain
bike, he wondered whether he could produce such high-quality beers back home in Colorado. After
acquiring the special strain of yeast used to brew Belgian-style ales, Lebesch returned home and
began to experiment in his Colorado basement. When his beers earned thumbs up from friends,
Lebesch decided to market them.
The NBB opened for business in 1991 as a tiny basement operation in Lebesch’s home in Fort Collins.
Lebesch’s wife at the time, Kim Jordan, became the firm’s marketing director. They named their first
brew “Fat Tire Amber Ale” in honor of Lebesch’s bike ride through Belgium. Initially, getting New
Belgium beer onto store shelves was not easy. Jordan often delivered the beer to stores in the back of
her Toyota station wagon. However, New Belgium beers quickly developed a small but devoted
customer base, first in Fort Collins and then throughout Colorado. The brewery soon outgrew the
couple’s basement and moved into an old railroad depot before settling into its present custom-built
facility in 1995. The brewery includes two brew houses, four quality assurance labs, a wastewater
treatment facility, a canning and bottling line, and numerous technological innovations for which
New Belgium has become nationally recognized as a “paradigm of environmental efficiencies.” In
2015, it opened its second brewery in Asheville, North Carolina.
Under the leadership of Kim Jordan, who has since become CEO, NBB currently offers a variety of
permanent and seasonal ales and pilsners. The company’s standard line includes Sunshine Wheat,
Blue Paddle, 1554, Ranger IPA, Abby, Shift, Trippel, Rampant, Slow Ride IPA, Snapshot, and the
original Fat Tire Amber Ale, still the firm’s bestseller. Some customers even refer to the company as
the Fat Tire Brewery. The brewery’s seasonal ales include Skinny Dip, Portage Porter, and
Accumulation. The firm also started a Lips of Faith program, where small batch brews such as La
Folie, Gruit, and Salted Belgian Chocolate Stout are created for internal celebrations or landmark
events. Additionally, New Belgium is working in collaboration with other craft brewers to come up
with new products. Through this, they hope to create improved efficiency and experimentation and
take collaborative strides toward the future of American craft beer making. Some products resulting
from these collaborations are a beer brewed with Anaheim and Marash Chilies in collaboration with
Cigar City Brewing.
NBB’s most effective form of advertising has always been its customers’ word of mouth, especially in
the early days. Indeed, before New Belgium beers were widely distributed throughout Colorado, one
liquor-store owner in Telluride is purported to have offered people gas money if they would stop by
and pick up New Belgium beer on their way through Fort Collins. Although New Belgium has
expanded distribution to a good portion of the U.S. market, the brewery receives numerous e-mails
and phone calls every day inquiring when its beers will be available in other parts of the country.
Although still a small brewery when compared to many beer companies, such as fellow Coloradan
Coors, NBB has consistently experienced strong growth with estimated sales of more than $180
million (because New Belgium is a private firm, detailed sales and revenue numbers are not
available). It now has its own blog, Twitter, and Facebook pages. The organization sells more than
800,000 barrels of beer per year and has many opportunities for continued growth. For instance,
while total beer consumption has remained flat, the craft brewing industry is now at 11 percent.
Growth for craft beer is likely to continue, as new generations of beer drinkers appear to favor beers
that are locally brewed.
Currently, New Belgium’s products are distributed in 37 states plus the District of Columbia, British
Columbia, and Alberta. It plans to begin distribution in Hawaii and Kentucky in 2015. Beer
connoisseurs that appreciate the high quality of NBB’s products, as well as the company’s
environmental and ethical business practices, have driven this growth. For example, when the
company began distribution in Minnesota, the beers were so popular that a liquor store had to open
early and make other accommodations for the large amount of customers. The store sold 400 cases
of Fat Tire in the first hour it was open.
With expanding distribution, however, the brewery recognized a need to increase its opportunities
for reaching its far-flung customers. It consulted with Dr. Douglas Holt, an Oxford professor and
cultural branding expert. After studying the company, Holt, together with former Marketing Director
Greg Owsley, drafted a 70-page “manifesto” describing the brand’s attributes, character, cultural
relevancy, and promise. In particular, Holt identified in New Belgium an ethos of pursuing creative
activities simply for the joy of doing them well and in harmony with the natural environment.
With the brand thus defined, NBB worked with New York advertising agency Amalgamated to create
a $10 million advertising campaign. The campaign would target high-end beer drinkers, men aged 25
to 44, and highlight the brewery’s down-to-earth image. The grainy ads focused on a man, Charles
the Tinkerer, rebuilding a cruiser bike out of used parts and then riding it along pastoral country
roads. The product appeared in just 5 seconds of each ad between the tag lines, “Follow Your Folly …
Ours Is Beer.” With nostalgic music playing in the background, the ads helped position the growing
brand as whimsical, thoughtful, and reflective. NBB later re-released its Tinkerer commercial during
the U.S. Pro Challenge. The re-released commercial had an additional scene with the Tinkerer riding
part way next to a professional cyclist contestant, with music from songwriter and Tour de Fat
enthusiast Sean Hayes. The commercial was featured on the National Broadcasting Company
television network.
In addition to the ad campaign, the company maintains its strategy of promotion through event
sponsorships and digital media. To launch its Ranger IPA beer, New Belgium created a microsite and
an online video of its NBB sales force dressed as rangers performing a hip-hop number to promote
the beer. The only difference was that instead of horses, the NBB rangers rode bicycles. The purpose
of the video was to create a hip, fun brand image for its new beer, with the campaign theme “To
Protect. To Pour. To Partake.”
New Belgium Embraces Social Responsibility
According to New Belgium, the company maintains a fundamental focus on the ethical culture of the
brand. Although consumer suspicion of business is at an all-time high, those in good standing—as
opposed to those trading on hype—are eyed with icon-like adoration. Today, businesses that fully
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embrace citizenship in the communities they serve can forge enduring bonds with customers. At New
Belgium, the synergy between branding and corporate citizenship occurred naturally as the firm’s
ethical culture (in the form of core values and beliefs) and was in place long before NBB had a
marketing department.
Back in early 1991, when New Belgium was just a fledgling home-brewed business, Jeff and Kim took
a hike into Rocky Mountain National Park. Armed with a pen and a notebook, they took their first
stab at what the company’s core purpose would be. If they were going forward with this venture,
what were their aspirations beyond profitability? What was at the heart of their dream? What they
wrote down that spring day, give or take a little editing, was the core values and beliefs you can read
on the NBB website today. More importantly, ask just about any New Belgium employee and he or
she can list for you many, if not all, of these shared values and can inform you which are the most
personally poignant. For NBB, branding strategies are as rooted in its company values as in its other
business practices. For instance, as a way to live out its values, the company adopted a triple bottom
line (TBL) approach to business. TBL incorporates economic, social, and environmental factors into
its business strategies. In other words, the company looks at its impact upon profits, people, and the
planet rather than simply on the bottom line. New Belgium’s dedication to quality, the environment,
and its employees and customers is expressed in its mission statement and core values:
Mission Statement:
To operate a profitable brewery which makes our love and talent manifest.
Company Core Values and Beliefs:
Remembering that we are incredibly lucky to create something fine that enhances people’s lives
while surpassing our consumers’ expectations.
Producing world-class beers.
Promoting beer culture and the responsible enjoyment of beer.
Kindling social, environmental, and cultural change as a business role model.
Environmental stewardship: minimizing resource consumption, maximizing energy efficiency, and
recycling.
Cultivating potential through learning, participative management, and the pursuit of opportunities.
Balancing the myriad needs of the company, staff, and their families.
Trusting each other and committing ourselves to authentic relationships, communications, and
promises.
Continuous, innovative quality and efficiency improvements.
Having fun.
Employees believe that these statements help communicate to customers and other stakeholders
what New Belgium, as a company, is about. These simple values developed roughly 25 years ago are
just as meaningful to the company and its customers today, even though there has been much
growth.
Responsibilities to the Environment
New Belgium’s marketing strategy involves linking the quality of its products, as well as its brand,
with the company’s philosophy of environmental friendliness. As chair of the sustainability
subcommittee for its trade group the Brewers Association, NBB is at the forefront in advancing ecofriendly business processes among companies in its industry. Co-workers and managers from all
areas of the organization meet monthly to discuss sustainability ideas as part of NBB’s natural
resource management team. From leading-edge environmental gadgets and high-tech industry
advancements to employee-ownership programs and a strong belief in giving back to the community,
New Belgium demonstrates its desire to create a living, learning community.
NBB strives for cost-efficient energy-saving alternatives for conducting its business and reducing its
impact on the environment. In staying true to the company’s core values and beliefs, the brewery’s
employee-owners unanimously agreed to invest in a wind turbine, making New Belgium the first
fully wind-powered brewery in the United States. NBB has also invested in the following energysaving technologies:
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A smart grid installation that allows NBB to communicate with its electricity provider to conserve
energy. For example, the smart grid alerts NBB to nonessential operational functions, allowing the
company to turn them off and save power.
The installation of a 20 KW photovoltaic array on top of the packaging hall. The array produces three
percent of the company’s electricity.
A brew kettle, the second of its kind installed in the nation, which heats sheets of wort instead of the
whole kettle at once. This kettle heating method conserves energy more than standard kettles do.
Sun tubes that provide natural daytime lighting throughout the brew house all year long.
A system to capture its wastewater and extract methane from it. This can contribute up to 15 percent
of the brewery’s power needs while reducing the strain on the local municipal water treatment
facility.
A steam condenser that captures and reuses the hot water that boils the barley and hops in the
production process to start the next brew. The steam is redirected to heat the floor tiles and de-ice
the loading docks in cold weather.
In April 2014, New Belgium was featured in a half-page advertisement supporting the EPA clean
water rule that was introduced on March 26, 2014. Andrew Lemley, New Belgium’s Government
Relations Director, was quoted in an EPA news release championing continued support for the Clean
Water Act while also associating quality water with quality beer.
In addition to voicing political support for environmental protections, New Belgium also takes pride
in reducing waste through recycling and creative reuse strategies. The company strives to recycle as
many supplies as possible, including cardboard boxes, keg caps, office materials, and the amber glass
used in bottling. The brewery also stores spent barley and hop grains in an on-premise silo and
invites local farmers to pick up the grains, free of charge, to feed their pigs. Going further down the
road to producing products for the food chain, NBB is working with partners to take the same
bacteria that create methane from NBB wastewater and convert them into a harvestable, highprotein fish food. NBB also buys recycled products when it can, and even encourages its employees to
reduce air pollution by using alternative transportation. Reduce, Reuse, Recycle—the three R’s of
environmental stewardship—are taken seriously at NBB. The company has been a proud member of
the environmental group Business for Innovative Climate & Energy Policy (BICEP), and it signed
BICEP’s Climate Declaration in 2013, which calls for American businesses, stakeholders, and
regulators to address climate change. Case Exhibit 4.1 depicts New Belgium’s recycling efforts.
Case Exhibit 4.1 New Belgium’s Recycling Efforts
Source: Information obtained from the New Belgium Brewing website,
http://www.newbelgium.com/Sustainability/Environmental-Metrics/Waste.aspx (accessed May 5,
2015).
Additionally, New Belgium has been a long-time participant in green building techniques. With each
expansion of the facility, it has incorporated new technologies and learned a few lessons along the
way. In 2002, NBB agreed to participate in the U.S. Green Building Council’s Leadership in Energy
and Environment Design for Existing Buildings (LEED-EB) pilot program. From sun tubes and day
lighting throughout the facility to reusing heat in the brew house, NBB continues to search for new
ways to close loops and conserve resources.
NBB has made significant achievements in sustainability, particularly compared to other companies
in the industry. For one, NBB’s goal is to use only 3.5 gallons of water to make 1 gallon of beer, which
is more than 20 percent less than most other companies. The company is attempting to create a
closed-loop wastewater system with its own Process Water Treatment Plant, in which microbes are
used to clean the wastewater. NBB recycles over 99.9 percent of its waste, and today 100 percent of
its electricity comes from renewable energy sources. Despite these achievements, it has no intention
of halting its sustainability efforts. By 2015, the company hopes to reduce carbon emissions by 25
percent per barrel. To encourage sustainability throughout the supply chain, NBB adopted
Sustainable Purchasing Guidelines. The Guidelines allow them to pinpoint and work closely with
eco-friendly suppliers to create sustainability throughout the entire value chain. For its part, NBB
conducts life-cycle analysis on its packaging components while continually seeking more efficient
refrigeration and transportation technology that can be incorporated into its supply chain.
Responsibilities to Society
Beyond its use of environmentally friendly technologies and innovations, New Belgium also strives to
improve communities and enhance people’s lives through corporate giving, event sponsorship, and
philanthropic involvement. Since its inception, NBB has donated more than $7 million to
philanthropic causes. For every barrel of beer sold the prior year, NBB donates $1 to philanthropic
causes within their distribution territories. The donations are divided between states in proportion to
their percentage of overall sales. This is the company’s way of staying local and giving back to the
communities that support and purchase NBB products. NBB participates in 1 Percent for the Planet,
a philanthropic network to which the company donates 1 percent of its profits. NBB employees also
partnered with Habitat for Humanity to build a house for a family who had lost their home to a fire.
Funding decisions are made by NBB’s Philanthropy Committee, which comprises employees
throughout the brewery, including employee owners, area leaders, and production workers. NBB
looks for nonprofit organizations that demonstrate creativity, diversity, and an innovative approach
to their mission and objectives. The Philanthropy Committee also looks for groups that involve the
community to reach their goals.
Additionally, NBB maintains a community bulletin board in its facility, where it posts an array of
community involvement activities and proposals. This community board allows tourists and
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