CEO/Founder Jacob McKean's CCBA Keynote Speech

First of all, I can’t thank Tom enough for inviting me to speak today. If you had told me 4 years ago—when my brewery was just a stack of paperwork and a bunch of naïve dreams—that I would be delivering the keynote address at a CCBA conference, I would have said you were out of your goddamn mind. But in a year of unlikely outcomes, here I am. And I’m deeply honored to be speaking to all of you today. I feel tremendous gratitude and respect for the hard work you all have done. This industry has—in the most literal way possible—made my dreams come true. And many of the people in this room laid the foundation for that success. That interconnectedness is what I’d like to talk about today.

Everyday that I’ve worked to build Modern Times, I’ve been aware of the fact that I stand on the shoulders of braver, more resolute people than myself, people who dove headfirst into the world of craft beer when this industry was just an obscure way to lose money. I’m talking about the people who began brewing beer when raw ingredients and equipment had to be scrounged for, when interest in craft beer was minimal, and when every sale was a minor miracle. People who spent decades working to persuade skeptical distributors that craft beer could become the lynchpin of their portfolios. People who did the exhausting, repetitive work of hand-selling beer to retailers who said no a hundred times before they said yes. People who invested their hard-earned money and precious time convincing consumers that beer could be so much more than what they’d been taught to expect.

Without all of that hard work and sacrifice, my own success would not have been possible. There’s a mythology around entrepreneurship that obscures this reality: it’s the myth that each of us succeeds entirely on our own, by striking out into uncharted territory and personally forging our success through sheer force of will. And being an entrepreneur can indeed feel incredibly lonely at times, with the weight of enormous responsibility constantly bearing down on us. But the reality is that without the people who came before us, that weight might be too much to bear. In countless ways large and small, those trail blazers have made our burdens lighter. But it doesn’t end there: the people in this room continue to do the same for each other every day. By working together towards our shared goal of converting everyone into craft converts, we share the responsibility for each other’s success.

I got into this business precisely because of that interconnectedness, because of collaboration, because of our willingness to share information and support each other in times of need. With the head winds growing a little stronger and Big Beer throwing around huge sums of cash, it would be easy for us to lose sight of the slogan many of us have repeated for years: a rising tide lifts all boats. But if we do lose sight of it, we might as well start making insecticide or selling plastics because this strange and wonderful little eddy in the surging river of capitalism will be swept away.

It would be easy to say that such an outcome is inevitable because it would absolve us of our responsibility to each other. But I don’t believe that it is inevitable. Whether this industry stays true to the ideals that made it awesome to begin with is up to us. And we will be the ones who decide where craft beer goes from here, in the countless decisions we make every day.

One way I pledge to keep this industry awesome is by never selling my brewery to Big Beer. There will likely come a time when I’m tired of carrying the weight of so much responsibility. But when that time comes, I’m not going to screw the people who made my success possible in the first place. That would be an unethical choice I could never be proud of. I owe a tremendous debt of gratitude to everyone in this industry, and when it comes time for me to do something else, I refuse to throw a hand grenade over my shoulder on my way out the door. Selling Modern Times to Big Beer would make life harder for everyone who stayed behind: it would give the macro brewers another zombie brewery with which to deceive consumers, it would be used to keep real craft breweries out of distribution books, and the price of Modern Times beer would inevitably be slashed to the bone with the malicious goal of putting my friends and colleagues out of business. Ultimately, what I decide to do with Modern Times will affect everyone in this room. And I will not allow greed and short-sightedness to blind me to that reality. I would urge you all to make the same commitment.

Another commitment I believe we all must make is to always behave ethically in the marketplace. No matter how fierce the competition gets in our business, I will never break the law to get a placement. No matter what dirty tricks Big Beer resorts to, I will never stoop to their level. No matter which other craft breweries decide to start buying their way onto tap towers, I will never throw up my hands and say, “I guess I will too.” I implore you to make the same commitment.

Pay-to-play will ruin this industry if we let it, as it has so many others. Part of what makes craft beer so unique and so special is that it is, in large part, a meritocracy. If you make truly great beer, you can succeed. We always have and we always will compete with each other on the basis of quality: that competition pushes us to be better, which benefits beer drinkers and brewers alike. Remember: it takes friction to sharpen a knife. If we double down on our commitment to quality, increased competition can make us all sharper brewers and businesspeople. Let’s take that path, instead of the race to the bottom offered by pay-to-play.  

So, how else do we become sharper? First, by asking ourselves if our beer is the best it can possibly be. If it’s not, why not? Think about the countless tiny decisions you make every day that end up influencing the quality of the beer you brew. How many times do you find yourself prioritizing something else over quality? How many compromises do you make in the name of finance or logistics or marketing? Of course we all have to work within certain confines, and those confines are different for each person in this room, but every single one of us can choose to make quality our first priority. If we’re not routinely blowing people’s minds with the unbelievable quality of our beer, we’re not doing our job. Bad beer is the subprime mortgage of our industry. There is no faster or more effective way to turn people away from craft beer than by sending bad beer into the marketplace. If we are to ensure that the marketshare we have fought so hard to win remains ours, we absolutely cannot tolerate bad beer. The race to grow must never take precedence over quality.

We’ve long said that the average person could never afford to buy a bottle of the best wine in the world, but almost anyone can afford a pint of the best beer in the world. Each of us should constantly strive to be the brewery responsible for that pint. 

The next way we can become sharper is by ensuring that every single person working in our breweries is doing the best job possible. By far the most effective means I’ve found to do that is by allowing them to share in the financial success of the business. If the people who make the wort and scrub the floors and run the bottling line and clean the tanks and manage the office and drive the trucks are underappreciated and underpaid, it will show. There’s nothing romantic about trying to get by on minimum wage. The high turnover, low morale, and widespread inefficiency that comes with low pay does not save businesses money. And if we’re going to build the kind of industry that will survive for generations while weathering inevitable ups and downs, we will need a trained, motivated, stable workforce that sticks with craft beer for their entire careers. We can make that happen by always striving to pay people what they’re truly worth.

Another way we can become sharper is by taking our design work seriously. Breweries used to be great patrons of the arts. It used to be a given that the artwork commissioned by breweries would be timeless and daring and beautiful. When you look at your own labels and coasters and six pack holders, are they timeless and daring and beautiful? You have the opportunity to make stunning design accessible to people who could never afford to buy an expensive work of art. Let’s take that opportunity seriously and make the pride we take in our beer visible to everyone. Breweries all over the world increasingly are, and the daring, beautiful labels I’ve seen this year crowding the shelves in Brazil, Mexico, Scandinavia, and the UK are proof of that. If they can do it, we sure as hell can too.

And finally, we can become sharper by deepening our commitment to good business fundamentals. People ask me constantly what explains the success of Modern Times. At just three and half years old, we are on pace to brew nearly forty thousand barrels this year. What started as a four-person operation in mid-twenty thirteen has now swelled to one hundred and five people, with hundreds of applicants for every job we post. It feels like we’ve never stopped being under construction, with a first round of expansion leading into a second round leading into another and another, to the point where we don’t even bother keeping track of which round we’re on now. How have we done it? How has an independent brewery financed and managed all of this? Have we taken on new investors, or borrowed money from a wealthy family member, or executed some obscure financial maneuver that has made it all possible?

The secret to our business model is this: we sell things for more than it costs us to make them. We then take the money we make and reinvest it in the business. We use our strong profitability and steady cash flow to borrow safe, reasonable amounts of money from our bank. Then we put that money towards expanding capacity and improving quality. And that’s it. That’s how we do it.

Somewhere along the way that became a radical way of doing business. We all know that the cool kids don’t bother with actually turning a profit: if they have to burn heaps of cash in the service of disrupting an industry, with an eye always towards an eventual buy-out by a massive competitor, then that just comes with the territory. If most of those companies crash and burn along the way, taking investors and employees down with them, then that’s considered the cost of doing business.

That approach must be the antithesis of our own. A craft brewery is an old school kind of business: it’s a bricks-and-mortar artisan manufacturing business that can’t scale up massively overnight. We take agricultural products and turn them into a beverage that brings people together and adds joy to their lives. We create jobs in places that other manufacturing businesses have fled, investing in our communities and giving people hope that we can make things again. We build tasting rooms that have become community gathering places, giving friends and neighbors a warm place to meet and share a pint. We have played a key role in the remarkable renaissance of the American culinary tradition, and with our incredible beer we have given countless bars and hospitality businesses new life. In a world that not too long ago seemed destined to become one gigantic airport terminal, with flavorless mega-chains crowding out everything small and interesting, we have helped turn the tide towards the local and unique.

These are the fundamental ways in which we add value to society. They are not the newest or the sexiest or the most profitable things to do. But they are irreplaceable, and as long as we take the responsibility that comes with them seriously, we will be able to keep doing this for a long time to come.

Cheers and thank you, everyone. I can’t wait to see what we can do together next.

Comments

Devin GNeiting

Fri, 11/18/2016 - 02:36

Cheers to that! Well said, i'm coming in for a pint!

Ron Harkins

Fri, 11/18/2016 - 06:00

Excellent! Tells me a lot about why you're so successful. Cheers to you, and all who work at Modern Times.

Judy

Thu, 12/15/2016 - 04:21

Reading this makes my densiiocs easier than taking candy from a baby.

Marty

Thu, 12/15/2016 - 06:54

That's really shredw! Good to see the logic set out so well.

Priest

Thu, 12/15/2016 - 07:08

That's way more clever than I was exenitcpg. Thanks!

Travis B Sharpe

Mon, 12/26/2016 - 10:43

Cheers! Sounds like a company I'd love to work for

knixtunty

Sun, 07/23/2017 - 10:05

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