Objective: This What Works for Cities case study highlights how the combination of capital, coaching and access to business networks has helped hundreds of small food, beverage and craft beer companies thrive through Samuel Adams’ “Brewing the American Dream” initiative.
Major Participants: Samuel Adams, ACCION, various local partners.
Background: When Jim Koch founded the Boston Beer Company in 1984, he was brewing beer from his kitchen. Koch knew he had a good product, but getting the business up and running would require access to capital and technical assistance. After applying for and being turned down by traditional lenders, Koch bootstrapped his business with the help of a few friends. But despite his business school education, Koch still did not know how to successfully run a small business, including how to hire people or how to balance the books. Much of what he learned came through trial by fire. Today, Koch’s Boston Beer Company (BBC) has over 1,100 employees and its Sam Adams brand is one of the most popular craft beers in America.
Koch hasn’t forgotten the challenges he faced when launching his company. Over 30 years later, starting a small food and beverage company is still incredibly difficult. Drawing on his own experience, Koch and his team established “Samuel Adams Brewing the American Dream” (BTAD), a philanthropic program that helps connect small food, beverage and brewing business owners to both capital and expert mentoring. Initially launched in New England in 2008, the program has since expanded nationwide.
How it Works: Samuel Adams partnered with ACCION, a nonprofit microlending organization that provides small loans and other financial services to small businesses that – for any number of reasons – are unable to access traditional capital. BTAD targets businesses in the food, beverage and craft brewing industry in order to help them strengthen and grow their companies.
BTAD has three core components:
An additional component, falling somewhere between coaching and networks (see below), is the BTAD Pitch Room. This competition helps small businesses perfect their sales pitch. Experts such as Jim Koch, Celebrity Chef David Burke and retail buyers provide feedback to contestants at each of the regional competitions; the winners then move on to a final competition at the end of the year. The winner of the National Pitch Room Competition wins a $10,000 business grant and extended coaching from Samuel Adams.
Results for Economy: Since its inception in 2008, BTAD has facilitated more than 400 microloans through ACCION and coached more than 5,000 food and beverage companies. The combination of technical assistance and capital has been critical; of the ACCION loans secured by BTAD participants, more than 98 percent have been repaid.
Additionally, the BTAD program has helped these companies to create or retain more than 2,000 jobs.
Importantly, Samuel Adams has also helped ACCION build its lending portfolio to include more food and beverage companies. Samuel Adams says that before BTAD launched, less than 10 percent of ACCION loans were coming from the industry; today, it’s over 20 percent nationally. Samuel Adams has helped ACCION understand the nuances of the food and beverage industry, better preparing ACCION to lend to companies in this industry.
Remaining Challenges: Samuel Adams launched BTAD in 2008 and has impressive results to show since that time. Samuel Adams also has more capital and capacity to bring to the program but recruiting food and beverage small business owners remains a challenge. Currently, Samuel Adams shares information about the program through ACCION and local partners, through traditional media/press connections and via social media—but there is still opportunity to connect with more food and beverage businesses that are looking for the unique combination of lending and expert advice that the program offers.
As the program scales, Samuel Adams must also be mindful about how they reach more people and maintain the high-touch nature for which the program is known. A key defining feature of the program is the relationships the brewer maintains with many of its small businesses. Moving forward, Samuel Adams must find a balance between scaling the program while maintaining the intimate experience that makes the program so valuable to participants.
Lessons Learned: Start small, learn and then grow the program. When Samuel Adams first launched in New England, the program was relatively small. It took three years before expanding into larger markets, but this time was critical for allowing BTAD to learn what was working well and adjust what areas could be strengthened. For instance, it took some time to understand how to tailor program components for small businesses – such as the number of coaching stations to include at each speed coaching event, or the need to design a website that is easily accessible on handheld devices, since many food and beverage entrepreneurs are typically on their feet and away from computers. Similarly, Samuel Adams learned that Monday night events were better attended because restaurants and bars were already closed on Mondays or had slower nights, making it easier for business owners to attend.
Moreover, while Samuel Adams already had insight as to the needs of small food and beverage companies, BTAD has reinforced the need for access to both capital and coaching. When BTAD first launched in 2008, this was perhaps all the more relevant: the economic downturn instilled fear in many small business owners and capital markets were constrained. The combination of capital and coaching has shown to be an effective mechanism for helping these businesses to continue to grow and expand, in spite of otherwise tumultuous economic conditions.
For more information, visit: http://btad.samueladams.com/.