1|New Belgium Brewing Company

New Belgium Brewing Company

The idea for the New Belgium Brewing Company began with a bicycling trip through
Belgium. Belgium is arguably the home of some of the world’s finest ales, some 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 moun¬tain bike, he wondered if he could
produce such high-quality beers back home in Col¬orado. 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 New Belgium Brewing Company (NBB) opened for business in 1991 as a tiny
basement operation in Lebesch’s home in Fort Collins. Lebesch’s wife, 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. New Belgium beers quickly devel¬oped 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 brew¬ery includes an automated brewhouse, two quality assurance
labs, and numerous technological innovations for which New Belgium has become nationally
recognized as a “paradigm of environmental efficiencies.”

Today, New Belgium Brewing Company offers a variety of permanent and seasonal ales
and pilsners. The company’s standard line includes Sunshine Wheat, Blue Paddle Pilsner, Abbey
Ale, Trippel Ale, 1554 Black Ale, and the original Fat Tire Amber Ale, still the firm’s best-
seller. Some customers even refer to the company as the Fat Tire Brewery. The brewery also
markets two types of specialty beers on a seasonal basis. Seasonal ales include Frambozen and
Abbey Grand Cru, which are released at Thanksgiving, and Christmas and Farmhouse Ale,
which are sold during the early fall months. The firm occasionally offers one-time-only brews,
such as LaFolie, a wood-aged beer, which are sold only until the batch runs out.

Until 2005, NBB’s most effective form of advertising has been its cus¬tomers’ word of
mouth. Indeed, before New Belgium beers were widely distributed throughout Colorado, one
liquor store owner in Telluride is purported to have of¬fered people gas money if they would
stop by and pick up New Belgium beer on their way through Ft. Collins. Although New Belgium
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beers are distributed in just one-third of the United States, the brewery receives numerous e-
mails and phone calls every day inquiring when its beers will be available elsewhere.

At New Belgium, a synergy of brand and values occurred naturally as the firms 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, New Belgium was just a home-brewed business plan of Jeff
Lesbesch, an electrical engineer, and his social worker wife, Kim Jordan. Before they signed any
business paperwork, the two took a hike into Rocky Mountain National Park. Armed with a pen,
and a notebook they took their first stab at what the fledgling company's core purpose would be.
If they were going forward with this venture, what were their aspirations beyond profitability?
What was the real root cause of their dream? What they wrote down that spring day, give or take
a little word smiting, was the core values and beliefs you can read on the NBB website today.
More important, ask just about any New Belgium worker, and she or he can list for you many, if
not all, these shared values and can inform you which are the most personally poignant. For NBB
branding strategies are as rooted in our company values as in other business practices.

New Belgium’s Purpose and Core Beliefs

New Belgium’s dedication to quality, the environment, and its employees and customers is
expressed in its mission statement: “To operate a profitable brewery which makes our love and
talent manifest.” The company’s stated core values and beliefs about its role as an
environmentally concerned and socially responsible brewer include:

% ■ Producing world-class beers

% ■ Promoting beer culture and the responsible enjoyment of beer
% ■ Continuous, innovative quality and efficiency improvements
% ■ Transcending customers’ expectations
% ■ Environmental stewardship: minimizing resource consumption, maximizing
% energy efficiency, and recycling
% ■ Kindling social, environmental, and cultural change as a business role model
% ■ Cultivating potential: through learning, participative management,
% and the pursuit of opportunities
% ■ Balancing the myriad needs of the company, staff, and their families
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% ■ Committing ourselves to authentic relationships, communications, and promises

% ■ 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 15
years ago are just as meaningful to the company and its customers today even though there has
been much growth.

Organizational Success

New Belgium Brewing Company’s efforts to live up to its own high standards have paid
off with numerous awards and a very loyal following. It was one of three winners of Business
Ethics magazine’s Business Ethics Awards for its “dedication to environmental excellence in
every part of its innovative brewing process.” It also won an honorable mention in the Better
Business Bureau’s 2002 Torch Award for Outstanding Marketplace Ethics competition. Kim
Jordan and Jeff Lebesch were named the recipients of the Rocky Mountain Region Entrepreneur
of the Year Award for manufacturing. The company also captured the award for best mid-sized
brewing company of the year and best mid-sized brewmaster at the Great American Beer Fes-
tival. In addition, New Belgium took home medals for three different brews, Abbey Belgian
Style Ale, Blue Paddle Pilsner, and LaFolie specialty ale.

According to David Edgar, director of the Institute for Brewing Studies, “They’ve created
a very positive image for their company in the beer-consuming public with smart decision-
making.” Although some members of society do not believe that a company whose major
product is alcohol can be socially responsible, New Belgium has set out to prove that for those
who make a choice to drink responsibly, the company can do everything possible to contribute to
society. Its efforts to promote beer culture and the connoisseurship of beer has even led it to
design a special “Worthy Glass,” the shape of which is intended to retain foam, show off color,
enhance the visual presentation, and release aroma. New Belgium Brewing Company also
promotes the responsible appreciation of beer through its participation in and support of the
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culinary arts. For instance, it frequently hosts New Belgium Beer Dinners, in which every course
of the meal is served with a complementary culinary treat.

Every six-pack of New Belgium Beer displays the phrase, “In this box is our labor of love,
we feel incredibly lucky to be creating something fine that enhances people’s lives.” Although
Jeff Lebesch has “semi-retired” from the company to focus on other interests, the founders of
New Belgium hope this statement captures the spirit of the company. According to employee
Dave Kemp, NBB’s environmental concern and social responsibility give it a competitive
advantage because consumers want to believe in and feel good about the products they purchase.
NBB’s most important asset is its image—a corporate brand that stands for quality,
responsibility, and concern for society. Defining itself as more than just a beer company, the
brewer also sees itself as a caring organization that is concerned with all stakeholders, including
the community, the environment, and employees.
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Q1: How does New Belgium Brewing Company’s social responsibility initiatives help build its
brand?

Answer:

Many business owners and managers see corporate social responsibility (CSR) as
something that’s ‘nice to do’ but not really connected to growing the business and profits.
Corporate social responsibility (CSR) is a form of corporate self-regulation integrated into a
business model. CSR policy would function as a built-in, self-regulating mechanism whereby
business would monitor and ensure its support to law, ethical standards, and international norms.
Social responsibility is an ethical or ideological theory that business should not function
amorally but instead should contribute to the welfare of their communities and an entity whether
it is a government, corporation, organization or individual has a big responsibility to society at
large.

The need to be socially responsible is because to recognize the healthy and vibrant
communities, who are key to our ability to attract, retain and develop talented employees, and to
operate a successful and growing enterprise. The quality of the community's educational system
is key to the skills of our employee force and the vibrancy of the community as a good place to
live is key to our being able to attract and keep the best employees. Most importantly, we are
socially responsible because it is clearly the right thing to do.

Although most of the companies frequently cited as examples of ethical and socially
responsible firms are large corporations, it is the social responsibility initiatives of small
businesses that often have 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. Their owners often serve as community and
neighborhood leaders, and many choose to apply their skills and some of the fruits of their
success to tackling local problems and issues that benefit everyone in the community.  Managers
and employees become role models for ethical and socially responsible actions.  One such small
business is the New Belgium Brewing Company.  “They’re incredible. Every worker gets a
mountain bike to bike to work, all their energy comes from renewable and alternative energy,
they give generously to civic and community and environmental causes. They really are
environmentally responsible, they put a lot of money back into the community, and they take care
of their workers.”  -Tom Strickland, former US Attorney for Colorado

The company aims to be "socially, ethically and environmentally responsible" as well as

profitable. To be a responsible corporation one must have a far-reaching impact, but it must
foster good relations on the local level. This is what New Belgium Brewing precisely does. In
1999, the company began to gather 100 percent of its electricity from wind-power in order to
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reduce the emission of carbon dioxide, before that in 1999; the brewery’s electric supply came
from a coal plant. The researchers found ways to reduce the output of carbon dioxide from the
fermentation process. The brewery, though, turned to wind power when they found that it was a
more effective means of cutting down carbon dioxide emissions. Therefore the employees of the
company were willing to make such sacrifices as reduced income in the name of protecting the
environment. During 1st year anniversary, an employee is awarded not only a bike, in honor of
the bike trip Jeff took which inspired him to brew this unique beer, but they are made co-owners
in the company. Moreover switching to wind power, the brewery has taken other steps to protect
the environment. The company has implemented on using natural draft cooling in its storage area
instead of a system that releases glycol. In 2002, New Belgium Brewing installed a biological
wastewater facility that cleans the water using digestion ponds.

In addition to their environmental responsibility, New Belgium Brewing treats its

employees and the surrounding community in an ethical manner. They operate on an open book
basis and sponsor community events. In its mission statement, the New Belgium Brewing
Company mentions the importance of “kindling social, environmental and cultural change as a
business role model”. The measures that New Belgium Brewing has taken to be environmentally
and socially responsible conclude that this company is a role model for others, and it has been
recognized as such. It's a great honor to be recognized as a company where people love what
they do and truly enjoy coming to work.  One of New Belgium’s core values is having fun, and
that's a very important and fulfilling piece of our culture. At New Belgium, we will always look
to the far horizon for ways of improving our systems, minimizing our impact, and helping other
businesses follow their own path toward more sustainable practices. The path towards
sustainability will always be a learning process. New Belgium is committed to examining each
choice we face to find the way that best honors both our human stakeholders and the Earth.

New Belgium focuses heavily on the use of environmentally friendly technologies.  It’s
costly to implement, but they benefit not only the environment, but New Belgium saves money
in the long run.  They are totally dependent on wind mill power, which save an enormous
amount of money on electricity.  They have begun recycling their own waste and using the
ethanol extracted to generate power.  Their practices for cooling and natural lighting make them
an example for all large power users to emulate, all the while saving them money. 

A part from that New Belgium donates $1.00 per barrel sold the previous year to selected
charitable organizations.  The company, decided to support their own communities and those
causes which can improve the environment.  The amount is determine by the previous year’s
sales so that if their sales are down, so are their dollars given to the charitable organizations. 
New Belgium seems to be very much in touch with environmental trends.  They realize that there
are many who believe selling alcoholic beverages is not socially responsible and have addressed
this in two major ways.  The first is that they have chosen to market their beer to a mature
consumer ranging in age from 25-45.  Their beer is priced for a high end buyer, selling at about
$7.00 a six pack, which is not realistically affordable for a young buyer.  The second is through
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their philanthropic interests.  The company has chosen include drug and alcohol awareness
programs in their mix of charitable causes. These two points convince me that they are aware of
this trend and are working to control potential problems as well as perceptions of the public

They recycle and reuse solid was, process plant wastewater, and give away their barley
and hops grain to farmers who need only to pick it up themselves to use for feed. They are the
first fully wind powered brewery in the U.S., use a steam condenser to heat the floors and de-ice
loading docks, and use sun tubes for natural lighting.  They have begun using the ethanol from
wastewater to produce electricity and power, which is another large endeavor in the cause of
environmental awareness. In New Belgium Brewing managers and employees become role
models for ethical and socially responsible actions.

It's my impression that beer drinkers choose their products based on taste. New Belgium's
social responsibility has built its brand. Beer drinkers base their choice on taste. But there's also
plenty of evidence that they want to support a company that's doing good things. For New
Belgium, that sense of purpose includes a commitment to sustainability.
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Q2: Describe New Belgium’s branding policy? How does it use packaging to further its brand
image?

Answer:

New Belgium’s branding policy & packing image:

1. New Belgium Brand was inspired by world’s finest ales and was branded according to
the interest of Jeff Lebesch who loves fat-tired mountain bike. NBB produces and market
a variety of ales, permanent and seasonal products.
2. NBB packaging designs employ the feature of the “good ol days” by using the old-style
cruise bike with wide tires, a padded seat, and a basket hanging from the handlebars
created by watercolor artist to give an image of local, warm and familiar feeling to the
consumers.
3. Their pricing strategy is unique where their wanted to maintain a slightly premium price
to reflect the quality and do no price their brand too far from their competitors.
4. The protected their price and network relationship by not offering lower price to their
direct consumers below the price offer to their distributors.
5. They started to promote their brand by word of mouth and slowly involve in social
responsible sponsorships.
6. New Belgium is now aggressively promote themselves as an active organization of
pursuing creative activities simply for the joy of doing them well and in harmony with
the natural environment.
7. NBB uses aluminum cans to replace glass bottle for recycling and energy conservation.
8. Their packaging concept is consistently communicate the value of quality, love the
community and the environment.
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Q3: Assess New Belgium’s brand equity

Answer:

New Belgium Brewing Company, Inc. is one of the largest regional specialty brewers in
the United States, producing about a dozen distinctive beers which are distributed to fifteen
states in the West. Its brands include top-seller Fat Tire Ale, Sunshine Wheat Beer, and Abbey
Belgian Style Ale, as well as seasonal offerings like Biere de Mars, Transatlantique Kriek, and
Two Cherry Ale. The environmentally-friendly firm uses wind-generated electricity as well as
heat and energy derived from byproducts of the brewing process. Founders Kim Jordan and Jeff
Lebesch hold controlling interest in the company, which is partly owned by their employees.

Its output was dominated by Fat Tire Amber Ale (75 percent of sales), with other popular
varieties including Abbey Belgian Style Ale, Trippel Belgian Style Ale, and Saison Belgian
Style Farmhouse Ale. The firm was already beginning to outgrow its new plant, and a two-year,
$4.2 million expansion program was undertaken to add an additional 12,000 square feet of
warehouse space, 8,000 feet of fermentation space, and 5,000 feet of utility space. Eight
additional $100,000 fermentation vessels were also added to boost capacity to 150,000 barrels
per year. NBB was now ranked among the top 25 beer-makers in the United States.

The company's rapid success was attributed in part to Lebesch and Jordan's systematic
approach to the business and their focus on maintaining quality and consistency. Lebesch had
created computer programs that monitored brewing processes, temperature, and ingredient flow,
and the company also took such measures as using metal pipes rather than hoses to transport beer
through the brewery, which yielded greater efficiency and sanitation. Six teams of laboratory
testers were employed to ensure that each batch of beer met quality standards.

Over time NBB had gradually expanded its distribution area, and by 1998 its beers were
available in ten states. Recent additions included Montana, Idaho, Washington, Texas, and
Missouri. The firm's offerings were increasing as well, with new varieties including Sunshine
Wheat, flavored with coriander and orange peel; 1554 Brussels Style Black Ale, based on a
recipe from the sixteenth century; and Blue Paddle Pilsener, a lighter Czech-style beer. To help
promote these brews, the company had expanded its marketing department to eighteen people,
whose work included meeting with store owners and attending promotional events and beer
festivals. For 1998 production jumped to 104,000 barrels, nearly a third higher than the year
before.

1999 saw NBB make headlines when it signed a contract with the city of Fort Collins to
buy only wind-generated electricity to operate its plant for a ten-year period. As a result, a new
wind turbine was installed near Medicine Bow, Wyoming to produce the 1.8 million kilowatt-
hours of electricity the plant consumed per year. The company would pay a 26 percent higher
rate for the power, which would reduce emissions of carbon dioxide associated with coal-fired
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electricity. NBB's 105 employees had voted in favor of the move, which was financed in part by
reducing their annual bonuses.

In the fall of 2000 NBB sponsored a promotional six-city "Tour de Fat," a traveling
festival that offered community bike rides, a Cruiser Bike Olympics, and a children's activity
area. Proceeds were donated to local non-profit and bicycling organizations. The year also saw
the introduction of the citrusy Biere de Mars, which was sold in the late winter and spring.

In 2001 the company introduced a new cherry-flavored beer. It had discontinued Old
Cherry Ale in 1998, but enough requests for another cherry brew came in that the firm decided to
re-formulate it. Two Cherry Ale was lighter than its predecessor, but contained the flavor of
whole cherries added during the fermentation process. The seasonal brew was made available
from late summer through fall. A dark, wood-aged French-style beer, La Folie, was also
introduced during the year and sold on a seasonal basis. 2001 proved another record year for the
firm, with production increasing to more than 230,000 barrels. In the fall, NBB began another
expansion of its brewery to triple production capacity.

NBB was now making six year-round beers and four seasonal varieties. The latter were
proving increasingly popular, and a new one was introduced every few months. The light, kaffir
leaf-flavored Loft was introduced in August 2002, and early the next year the company
announced that it would import a two-year aged Belgian beer to be blended 50/50 with a brew of
its own. The result, Transatlantique Kriek, was issued in the fall.

NBB was also selling products emblazoned with its logo including hats, t-shirts, beer
glasses, frisbees, and even a Sunshine Wheat lip balm. Over the years the company had won
many awards for its beers, and it had been named the best mid-sized brewery in the United States
at the Colorado-based Great American Beer Festival for several years running.

By now, half of NBB's production was sold in Colorado, with the rest shipped to a dozen
neighboring states, including the recently-added Nebraska. Explaining the firm's regional focus,
in 2003 CEO Kim Jordan told Mother Earth News “we're not looking at aggressive marketing
strategies right now because quality of life—for ourselves and our employees—is important, too.
If sales become the only focus of a business, and you're constantly hiring new staff, you may lose
track of the original goals: to have some fun, maintain a great working environment and produce
an excellent product that doesn't have [negative] impacts on the environment." While she
continued to lead the firm, her husband Jeff Lebesch now served on its board of directors and as
a technical consultant. Jordan was a well-respected leader within the industry, and had recently
served as chairman of the Brewers Association of America.

In 2003 output increased yet again, to 285,000 barrels. NBB was producing half the
amount that leading craft brewer Sierra Nevada did, but its distribution was more limited, and it
had a higher annual growth rate than the larger firm. The company was now one of the top ten
employers in the Fort Collins area, and also hosted 80,000 visitors to its plant during the year.
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In 2004 NBB was awarded an Environmental Achievement Award by the U.S.

Environmental Protection Agency for the firm's efforts to reduce energy and water consumption
at its plant. Ten percent of its power was now being supplied by methane derived from waste,
and this amount was expected to increase over time. The fall of 2004 saw distribution expand to
Southern California, two years after sales had begun in the northern part of the state. NBB
introduced its beers into a new market only after establishing a solid foothold in the last one,
starting with the popular Fat Tire Ale and gradually adding the rest of its line. The company's
beers were now available in fifteen states west of the Mississippi, with Iowa and Minnesota
slated to be added next.

In just over a decade, New Belgium Brewing Company, Inc. had grown from a home-
based brewery into one of the largest regional "craft" brewers in the United States. The firm's
success was built on quality products, strong leadership, a dedication to its employees, and a
deep respect for the environment. With more than two-thirds of the United States still untapped,
its growth looked assured for years to come.