John McDonald talks Boulevard Brewing Co. turning 26 today

%{[ data-embed-type=”image” data-embed-id=”” data-embed-element=”aside” ]}%

Today marks Boulevard Brewing Co.’s 26th birthday. It’s an anniversary marked in Boulevard lore with the sale of the first keg of Pale Ale to Ponak’s Mexican Kitchen — a delivery the brewery’s founder John McDonald made himself. 

Last year, I chatted with McDonald about the state of Boulevard on the brewery’s 25th anniversary — a conversation that included a bombshell: Boulevard would begin canning some of its beers.

A year later, I caught up with McDonald via phone. This conversation came as the Duvel Moortgat family, which Boulevard became a part  of in October 2013 with McDonald selling his controlling stake in the brewery, had grown; in July, Duvel bought into California-based Firestone Walker. 

McDonald’s sale of Boulevard now looks like a forward-thinking move with several major craft breweries either selling completely or in part. Last December, Founders Brewing Co. partnered with Mahou San Miguel, which bought a 30 percent ownership stake in the Michigan brewery. In September, Heineken bought a 50 percent stake in Lagunitas. And just this week, Constellation Brands bought Ballast Point for $1 billion.

“You’re starting to see more of this stuff happening,” McDonald says. “And I think it will continue. It’s a growing industry.”

McDonald says selling his stake was the right move. He points to the extension of Boulevard’s beers into the international marketplace as well as the growth locally. 

“You can’t deny that the new company hasn’t invested very heavily in Kansas City,” McDonald says. “I’m sure we’ve hired  50, 60 people and spent millions of dollars on Cellar 5. Getting ready to build a 400,000 square foot warehouse. They are really committed to Kansas City and Boulevard. Within the organization of Duvel Moortgat … it’s really a family of small brewers who are kind of connected together at a certain level to help each other. So there’s lots of collaborative things that are starting to happen and those things are not always easy, but I think they give us a great advantage going forward and they can compete with really large brewing operations because of our international reach. I had a Tank 7 in Paris two weeks ago. Next spring, I’m going to China because we’re selling beer in China now.

“It really gives us the ability to play as a craft brewery but on an international scale,” he adds. “That to me is an advantage that we’ll have over a lot of craft brewers who don’t have access to that. It’s still very frothy in the craft beer industry, but nothing goes up forever. But there will be a shakeout at some point, and I think Boulevard and its partnership with Duvel Moortgat and Firestone Walker is going to be a real advantage when that happens.”

The door is wide open for collaborations too with those family members. 

“Absolutely,” McDonald says. “We’re looking at all kinds of things that make sense. I think right now, it’s just getting a plan together and doing a lot of administrative things. But, yeah, we have great respect for Firestone Walker.

“I know that Steven Pauwels and their head brewer are good friends, so there are all kinds of collective things that we can do to help each other out,” he adds.

The needle for craft beer is still pointing upward. In the last year, the number of breweries in the United States exceeded 4,000, which McDonald says “is the most breweries ever in the U.S.”

“It’s a vibrant time,” he says.

%{[ data-embed-type=”image” data-embed-id=”” data-embed-element=”aside” ]}%
Even big beer has changed with the $107 billion agreement by AB InBev (maker of Budweiser) to purchase SABMiller. 

“It’s a continuation of what I really don’t like,” McDonald says of beer’s biggest makers joining forces, “which is where these giant companies become so big, and it’s all about the money. Now, I don’t think it’s good for the world, but I think it’s good for other small players because there are more differentiation. I think there’s even more differentiation between the smaller, more craft oriented people vs. these ginormous operations. It doesn’t matter if you’re a brewery or in the steel business or the flower business or whatever, when you get to be companies of that magnitude, I just don’t think it’s good for the world because it’s not about job creation, it’s not about the local economy, it’s just about this term shareholder return or shareholder value  and they no longer value the people and the products that are important. It’s all about money.”

So what does the future hold for Boulevard? More aluminum. 

“Just make more cans,” McDonald says with a laugh. “They sold really well, so just figuring out ways to do more. Cellar 5 is almost complete now. I went through it the other days, and we’re looking forward to having that capacity coming online the first part of next year. That gives us a lot of opportunity there. … I think just in this first phase probably 80,000 barrels and probably phase two, which I think we’re already looking at pulling the string on, which is going to add six new tanks. The cellar was designed for 12 tanks, so we put six in for the first phase. So I think we’re already looking at speeding up second phase, which is going to start to happen next year, which will really bring up capacity substantially.”

As Boulevard enters its 26th year, McDonald says he’d like to see his beers grow organically. 

“I think when all the newness of new beers coming out all the time wears off, which it will, we want to make sure that we have half a dozen or a dozen brands that are go-to brands for consumers,” he says. “That’s something that we’ll be working on as the years come. It’s fun coming out with all of these new beers, but it’s also challenging, and I think ultimately it’s confusing to the beer consumer. So that’s something we’re already talking about as a lot of other small breweries are. Sometimes more is not better.”

McDonald admits that Boulevard’s release calendar has seen several new beers, and he admits that it’s “not sustainable.”

“It’s great, but we’re on the verge of confusing the consumer,” he says. “One of the great things about the beer industry over the wine industry is that a wine drinker will drink a certain style of wine but they’re not brand loyal. …. They’re always trying something new or different. Beer, we really want regular consumers of our brands, even though that’s changed a lot do to all of this experimentation. I want somebody who Pale Ale or our Wheat beer or Tank 7 is something that they order regularly from the brewery. And I think every brewery needs that and wants that. I think the the consumer is eventually going to get confused about all of these beers coming out, and they’ll say I’m just going to go back to drinking these 10 or 15 of my favorite beers, which is a far cry from 20 years ago in this business.”

The experimentation has brought new beers that McDonald is proud of — even one he didn’t expect. 

“I hate pumpkin beers, to be honest with you,” McDonald says. “And I thought our Funky Pumpkin this year was really great. Tank 7 is probably 50 percent of the whole Smokestack Series. Probably next to Wheat beer and Pale Ale, probably one of our largest brands. And so we’re always looking for a new Tank 7. I think the Calling has performed that way for us. Really out of this experimentation, you ultimately want those great experiments to turn into beloved brands. Duvel has been a special brand for 50 years and has commanded a high price in the beer market for 50 years. Every brewery wants a Duvel that you sell a large quantity of and it’s so great and unique that it can stand the test of time.

“Local is great,” McDonald continues. “But really what you want is a product that local people want to drink and regional people want to drink and national people want to drink and that you can sell internationally. That’s a winning combination.”

After more than two decades, Boulevard appears to have unlocked that combination.

To celebrate year No. 26, Boulevard is throwing a Class of ’89 Pub Crawl on 39th Street Saturday, November 21, 1–6 p.m.

And for more on McDonald, read The Pitch feature: “In the East Bottoms, John McDonald sets out to brew the future.”

Categories: News