A lesson from beer
By Patrick Kelley
Originally published 01:38 p.m., April 10, 2008
Updated 01:38 p.m., April 10, 2008
In this era of corporate greed — the outsourcing of American jobs and ethics — there is rarely any unalloyed good news on the business pages of the newspaper. But last week, one story gleamed like a star in the gloom.
First, a bit of background.
American craft brewers — small-scale makers of beer — are in trouble. A key ingredient of beer is hops, and the world’s supply of hops is tight after two years of bad crops. The big brewers have the money and the clout to tie up a large proportion of the hops crop. The craft brewers are left to pay exorbitant prices for the little that is left — that is, if they can find any hops to buy.
Without hops, there will be no beer.
It does not take tons of hops to keep a craft brewer in business. One brewer in Iowa makes 40 to 50 gallons of beer a week. He told The Associated Press last week that 88 pounds of hops would keep his brewery running for a year.
The good news is that he now has that 88 pounds of hops, thanks to a competitor.
The nation’s biggest craft brewer is Boston Beer Co., which makes the popular Samuel Adams beers. Like the other brewers, it must worry about the hops supply. But unlike them, Boston Beer is big enough to be able to contract for large purchases every year.
Recently, Boston Beer looked at the shortage, took stock of its supply of hops, and decided it could help. It offered to share 20,000 pounds of German hops with its competitors in the craft-brewing trade — at cost. The going rate for hops on the open market is now $25 to $30 a pound. Boston Beer would sell the hops for about $6 a pound.
As a result of the company’s generosity, 108 craft brewers around the country now have the hops they need to keep making tasty beer.
What did Boston Beer get out of the deal? Good publicity, certainly. How often does a brewer get free space on the editorial page of a newspaper?
But the company already had a good reputation and many loyal customers. It could have hung onto its hops and nobody would have complained. It could have charged the small brewers two or three times the company’s cost, and they still would have been grateful.
But Boston Beer did the right thing in the right way.
That is good business news.
netloafer (anonymous) says...
There are a lot of good corporations out there. Thirty years ago the thinking was that one had to eliminate competiors, but there are more and more American companies who see that the best business equation is win-win. I realize that we haven't had those types of companies here in Emporia, but they do exist. Sometimes it's large companies that see that competition is good and healthy for them. I was fortunate to work for such a large corporation. In my sixteen years there I was constantly amazed at how well employees were treated and how sensitive the company was to the communities where it had operations. I was also amazed at how profitable it was.
But, by and large the more enlightened companies today are small, lean, and geared toward the twenty-first century economy. These are companies that are sensitive to their employees, communities, customers, shareholders, and competitors.
I'd love to see this type of sea change here in Emporia, but I'm not sure it will happen until we change our development strategy from low wage, large scale manufacturing to the types of companies I described before.
April 10, 2008 at 2:47 p.m. ( permalink | suggest removal )
Bjnemp (anonymous) says...
Amen, Netloafer; those employee-dedicated companies are out there. I worked for one from 1981 until '89 and another, an even more amazing one, until two years ago when the company sold and I retired. All employees, including me, were paid at least double what we were probably worth. We had the most amazing benefit package I have ever seen: two weeks paid vacation the first year, three weeks after five years, four weeks after 8 years PLUS 6 sick days, 3 bereavement days, and 3 personal days per year. Our full coverage health insurance package was FREE to all employees and only $136 per month for an entire family. It covered doctor visits, hospital, dental, vision, prescriptions, everything. We had a matching 401K plan that was literally free money in the bank, stock options, and employee stock purchase plan at a 15% discount and no brokers fee. And on and on it goes; but those perks were just the tip of the iceberg. The owners of that large company were good people with families of their own and gave what they would have wanted. I could give you a hundred examples of how this large company (offices in 19 states) treated employees, but let me give you just two. An employee in Hutchinson got a call from his elderly mother that her refrigerator stopped working. He went over to try and fix it but couldn't. While lifting the heavy appliance in intense heat, he died from a heart attack. The company paid all funeral expenses and sent all his insurance, back pay, vacation pay, etc., to his ex-wife and children even though she legally had no claims on any of it. Four days after his death, the elderly mother had a fancy new refrigerator delivered to her small house, sent by the company. Another employee, a 46 year old man in Minnesota, died suddenly of a stroke in late December. The home office (Seattle) immediately called his wife and told her to not sign the death certificate for two more days. Why? Because the man had nearly a million dollars worth of stock options taking effect on that date and if he was reported dead before then, he, and his family, would lose it. That is how a company should be, and can be, run. Do I even need to mention what kind of employee loyalty and output this company enjoyed? Companys like that do exist, although I've heard of none around here.
April 10, 2008 at 4:42 p.m. ( permalink | suggest removal )
netloafer (anonymous) says...
Bjnemp
I think these are the types of companies that are going to continue to be successful in this global economy. The company I worked for had an operating philoophy - "people - service - profit." It was linear, built on the assumption that if you treated people according to the golden rule they would provide the service that would be attractive to potential customer and that in turn would translate into profits. Once the chain was complete a good portion of the profit was put back into employee employee compensation, professional development, etc. When it came to the community the company supported United Way and went well above and beyond the call of duty. Each year several non operations workgroups were pulled off line and tasked with United Way duties for two months. Then, the company would hold a two or three day telethon to raise funds for United Way. They also did telethons for Cerebral Palsy and St. Jude's Hospital.
These are the types of companies we need here. They don't have to be big, they just have to be as sensitive and have the type of business savvy that has made the examples you and I cite succesful.
April 10, 2008 at 5:39 p.m. ( permalink | suggest removal )
blulitespecial (anonymous) says...
I LIKE beer...
April 11, 2008 at 11:55 a.m. ( permalink | suggest removal )
Pollyanna (anonymous) says...
I like the title of this article.
I've learned a lesson or two myself from beer.... For instance...
I am a fabulous dancer while on beer
Everyone is fascinating while on beer
Everyone is my best friend and will most likely be kissed while on beer.
I've also lost a thing or two due to beer...For instance...
my shoes
my earrings
my verbal "filter" and on occasion...
my good sense
Ditto bluelitespecial. GO BEER... hahahahahhaaa
April 11, 2008 at 2:05 p.m. ( permalink | suggest removal )