2016 has seen a profusion of high-level corporate shuffling in the craft beer industry. CEOs have departed national breweries like Dogfish Head, Ballast Point, Stone and SweetWater in recent months. Co-founder and CEO of Athens, Ga.-based Terrapin Brewing John Cochran recently left the company just prior to its buyout at the hands of Miller-Coors craft division Tenth and Blake, and New Belgium CEO Christine Perich surprised the industry by announcing that she would be moving on from the company in coming weeks.
Cochran’s and Perich’s career transitions have direct implications for the Asheville craft brewing community as Perich oversaw the development of New Belgium’s Asheville production facility, and Cochran purchased Altamont Brewing in West Asheville, now rebranded as UpCountry Brewing. The disproportionate degree of changeover in the highest echelons of corporate leadership has prompted speculation on the part of industry analysts as to the health of the craft beer business landscape and the prospects for its continued growth.
One person uniquely suited to comment on the significance of strong corporate leadership in the burgeoning craft brewing industry is Scott Hickman, new CEO of Riverbend Malthouse. Riverbend founders and co-owners Brent Manning and Brian Simpson brought Hickman on board in August to help facilitate the maltster’s growth and future expansion plans. On the state of the craft brewing industry, Hickman cites corollary antecedents in his assertion that the explosion in craft consumption is not a bubble, but a growth curve that must be managed responsibly.
“With American tastes, the genie is out of the bottle in terms of consumption behaviors for beer,” says Hickman. “In the same way that, if you look back at the wine industry in the ’70s or coffee in the ’80s, when suddenly good and then great products became available, nobody said, ‘Oh, this was a bubble, now we’re going back to drinking Sanka and cheap central-California wines.’ The consumption pattern won’t change; it’ll continue to grow. We might argue over whether that will be single-digit growth or double-digit, but I think we’ll continue on a monotonic trend toward increasing the percentage of beer by volume and by dollars that is craft.”
Riverbend was the third craft maltster in the nation and the first in the South, and Hickman was attracted to the idea of partnering with Manning and Simpson on the basis of their company’s business model and strategic position in a rapidly expanding market.
“Within 500 miles of us there’s about 170 million pounds of malt consumed annually just for beer, excluding secondary markets like craft distilling and tertiary markets like chocolate,” he points out. “The capacity to provide malt within that region is about 2 million pounds. If one of the primary reasons people drink craft beer is that it’s produced locally, where is all that malt coming from?”
Hickman, who earned his bachelor’s degree in industrial engineering from Stanford and a master of business administration degree from Harvard Business School, formerly headed up tech giant Sun Microsystems’ Eastern European division and served as CEO for an industrial manufacturing company here in Asheville before joining Riverbend. Simpson and Manning similarly hold multiple degrees and had successful careers in other industries and also come from multigenerational North Carolina farming families. One of the primary motivations behind Riverbend was to provide a source of revenue for local farmers and manufacturing jobs for Western North Carolina workers.
“Brent and Brian have a real passion for the local aspect of what we’re doing, they really want to help the farming community, and I applaud and support that,” Hickman says. “I have an equivalent passion for creating manufacturing jobs in the United States and specifically in Western North Carolina. We have a lot of great people here who have been whacked over generations by the loss of the textile and furniture industries, and America just has to be a manufacturing country. We’ve got 22 million people who work for the government and 12 million that work in manufacturing, and that ain’t right. So I’m motivated by the prospect of a local entity that creates a lot of good-paying jobs.”
Hickman is quick to point out that Riverbend’s business model is substantially different from that of a typical small brewery, but the craft malting business is nevertheless inextricably tied to the beer market and Manning and Simpson are on the cutting edge of their industry.
“What they’ve done in the first six years of Riverbend reminds me a lot of the early days of Sierra Nevada, with a lot of skinned knees and duct tape and trying to figure out ‘Will this work?'” says Hickman. “Because these guys have built such a great brand with a great product, over the last 18 months we’ve turned down $2 of business for every dollar we accept. We have to increase our capacity to meet that demand, and that’s what we’ll be focusing on over the next year.”
While “corporate” may sound like a dirty word to many in the craft beer business, Riverbend is a prime example of how solid executive leadership and an innovative corporate culture don’t have to be mutually exclusive. Hickman points out that a firm grasp of the business side of brewing is essential to any growing brewery’s continued success.
“You can’t grow without having a certain amount of structure,” he says. “As companies get larger, the ones that are going to be successful are going to have that, but without losing that renegade spirit that is at the heart of what the craft brew industry is about.”