John McDonald reflects on 25 years of Boulevard beer and looks to the future

John McDonald limps into Boulevard Brewing Co. on Election Day. The brewery’s founder took a spill on the stairs of his West Side home, and one of his feet hurts. He’s in a sunny mood anyway, though, and he greets everyone he passes — in cubicles, desks and offices — with a “good morning.”

McDonald, wearing comfortable blue jeans, boots and a button-down shirt, spots an employee in a suit.

“Going to a funeral or something?” McDonald asks.

“Tax adviser.”

“Tax adviser?” McDonald asks. “For you?”

“For the brewery.”

McDonald continues to his modest office, which overlooks Interstate 35. He takes a seat on a blue fitness ball. It’s there to combat what he confesses is a fidgety nature. He can’t sit still longer than 15 minutes, he says.

We’re here to talk about a much longer stretch: Boulevard’s 25th anniversary. On the walls and shelves of McDonald’s office are reminders of the steps that he and the company he founded have taken along the way — artifacts commemorating milestones. A framed photo of McDonald with his home-brewing operation in his wood shop, which doubled as the original brewery, in the late 1980s. Photos of the late Bob Werkowitch, the master brewer who helped advise McDonald and who became the namesake of Bob’s 47 Oktoberfest.

“This is my stuff,” McDonald says of the mementos. “This is cool. You know, I’m working on redoing the old Heim bottle shop in the East Bottoms, and this is an old bottle from the Heim brewery. They started mid-1800s, were already troubled, but went out of business during Prohibition.”

Boulevard is far from limping into its silver anniversary. A year after McDonald sold his controlling stake to Duvel Moortgat, Boulevard beers are now available in 29 states and the District of Columbia, after adding New Jersey, Pennsylvania, Florida and South Carolina this year. The brewery has a 600,000-barrel capacity, and it produced 184,692 barrels last year. And Duvel plans to take the limited-release Smokestack Series global.

This week, Boulevard celebrates its shared birthday with Fort Collins, Colorado’s Odell Brewing Co. The breweries sold their first kegs a day apart: Boulevard on November 17, with McDonald delivering a keg of Pale Ale to Ponak’s Mexican Kitchen, and Odell a day later.

McDonald reflected on the last 25 years. Here are excerpts from our conversation.

The Pitch: How hard was it to raise money for the brewery?

McDonald: The financial institutions were like, “Are you crazy? You’re going to compete with Anheuser-Busch?” I went to 25 banks. I was turned down by all of them. So, originally, my dad was the bank. I put all of the money that I had into the deal, which was $100,000, which I’d made from selling a house. I was a carpenter, and I had redone an old house at 2808 Charlotte. I had bought it for $7,000 and sold it for $85,000 10 years later, right before I started the brewery.

My dad said, “OK, I’ll loan you the money, but that’s your inheritance.” It started out $250,000, and at the end of the first year, I owed him $350,000, and he said, “Dude, that’s it. It either goes or …” [Laughs.] My father, who helped me a great deal in the early days, never owned any of the brewery. He just made these loans. He died eight or nine years ago as we were building this building. He always wanted me to go to work for him back in the ’70s and ’80s, and I tried it a couple of times and hated it.

After 25 years, what do you look back on now and say, “That really worked?”

In the ’80s, nobody thought we’d make it. I mean nobody. I can remember when I signed up our beer distributor in Wichita in the first year or two, and none of the people there would even try the beer. They were just going to drink Coors Light and Coors, and I’m there talking to them, trying to get them interested in selling my beer, and some of ’em wouldn’t even try it. And some would try it and say, “Oh, this is horrible.”

They just didn’t think there was a lot of potential. It’s not that big breweries are bad; it’s just what they are is bad. They just got too big. They don’t employ people. And I think that’s true in so many other fields. This whole idea that the world is going to be dominated by a couple of large players in every field, whether it be food or agriculture or beer or pretzels or anything, I think is really harmful. You’ve gotta have jobs.

What’s cool in the beer industry today is, even though craft brewers are only 8 percent of the volume, we’re, like, 60 percent of the [beer] jobs in the United States. That’s amazing. Look at all of these people who are going to work. We have eight or 10 other small brewers that are starting in Kansas City, and they’re going to employ three or four or five people. In 1880, there were 3,500 breweries in the United States. By 1980, there were 42 left. Now, by the end of 2014, there will be 3,500 breweries in the United States again.

[page]

Is there a ceiling?

There are very few things in life that go just like this [motions upward], and the craft beer went like this [gradual rising motion] until the mid-90s, and then it kind of flattened out for about five or six years and then it started growing again. We’ve really only had one flattening correction, in the mid-90s, and I think in the next two to five years there will be another correction of some sort. Not all breweries that are starting today are going to make it, but the ones that make it will come up with something new and different and interesting, and really push the envelope of craft brewing.

What advice do you have for aspiring brewers?

The model that works best today is, you start out with a small brewery, but you have a retail component. That way, you can make a pretty good income while you’re developing you brands. Having said that, you have to make great beer, because there’s so much great beer out there that people who aren’t making great beer aren’t going to make it.

What’s the future look like now?

The craft-beer business is going to continue to grow. I do think every five to six years, there’s going to be a downturn. Consumers want choice now, but there’s going to come a time when they get tired of that. I think people are brand-loyal. In the old days, a guy’s dad drank Budweiser, so he drank Budweiser, and he died drinking Budweiser. Today, brand loyal is, I drink Boulevard Pale Ale during the week. Friday night, I buy a six-pack of something more exotic, and I have some exotic stuff in my house, but I like these three beers most of the time, and I drink those every day.

What are you drinking now?

I drink everything: beer, wine and scotch. Scotch is what young beer drinkers eventually drink when they get old like me. I went to Costco yesterday, and I bought a 20-pack of Pale Ale and a case of Tank 7.

You buy your own beer?

I do. A guy told me a long time ago that you should always buy beer at retail because then you see what the consumer is buying. Occasionally, I get beer from the brewery, but I’ve always tried to buy it. But also, it’s good to talk to your retailers.

As far as growth goes, you have Cellar 5 coming. What else?

We’re starting to noodle, and something that we’ve been working on is this piece of ground out here that would be a new addition to our packaging facility. Probably put in a can line and probably upgrade our 750 ml cork-and-cage finish. So we’re looking at the whole canning thing a little bit.