Brewery CEO: How to build a winning business
In 1990, four years after opening its doors, Boston’s Harpoon Brewery celebrated its first Harpoon Oktoberfest, despite early growing pains and uncertainty about the brewery’s future.
The celebration, which the founders thought might serve as a farewell party, turned into a huge event that solidified Harpoon’s place among Boston’s then-emerging beer scene. While the brewery’s ownership, processes and beer offerings have changed since then, Harpoon Oktoberfest has remained a constant (and constantly growing) affair.
Dan Kenary, Harpoon’s CEO and one of its three founders, acknowledges the role of timing in the longevity of a microbrewery business. He and his two business partners embarked on the microbrew industry just before it started growing, and that gave the team an early edge in the market.
“Other than a few years in the late ’90s, it has really been a positive environment for craft beer,” says Kenary. “After those first five years in business — and learning about the business — we felt we were on the right trajectory and solidly established for the long haul.”
Marketing in a competitive market
According to Kenary, when Harpoon made its debut, there were fewer than 50 breweries in the United States. Today, there are more than 4,000 nationwide. Despite this growth in numbers, Kenary says that it’s the bars and stores carrying the product — as opposed to the breweries themselves — that have heightened the competition most.
“I would say this market is unprecedentedly competitive,” he explains. “We’re talking about a product that is dependent on shelf life and space. Whether it’s tap-handle space in a bar or cooler space in a grocery store, it is fiercely competitive.”
Marketing and sales has been crucial to Harpoon’s success since its inception, Kenary says. In the late 1980s, no one really knew what microbrewed beer was. Then in the ’90s, the term changed to “craft beer,” which gave the brewery an opportunity to change how it presented itself.
Even today, Kearney and his team “constantly adjust and hone our brand” to remain competitive. “We’ve always been the tiny guys who have targets on our backs, whether it was the big brewers questioning what we were trying to do early on, or local microbreweries changing the landscape of our competition.”
The Vistage sounding board
Despite the constants of high-quality production, good beer and solid relationships, Harpoon has experienced hiccups along the way. During these times of transition, Kenary turned to his Vistage group for insight and advice.
For example, in 2014, Kenary and co-owner Rich Doyle decided that they would make Harpoon an employee-owned company. To that end, Kenary had to structure and complete a buy-out transaction with Doyle before giving 48 percent of the company to its employees. This was an unusual move in his industry; only a handful of breweries have adopted private ownership in lieu of selling out to big guys like Budweiser or Heineken — and even fewer with such a high percentage employee ownership.
Throughout this process, Kenary used his Vistage group as a sounding board. In addition to asking his group for advice on financial, legal and operations issues, he turned to Vistage speakers and the peer network for business guidance.
Vistage members “care about each other and each other’s success,” he says. “We have each other’s backs.”