Brewing Up Business
Despite awards and national attention, New Knoxville Brewing Co. is still trying to win over the hometown crowd.
By Jesse Fox Mayshark
NOVEMBER 16, 1998: Ed Vendely squishes some foamy fluorescent plugs into his ears and flips on a stereo system against one whitewashed cinder-block wall. The folk-rock strains of Billy Bragg and Wilco rattle from a large speaker, singing about Walt Whitman's niece as something like a train whistle whines from across the sunlit concrete room. The whine is followed by a rush of soundschugging and spraying and rolling and glass clanking. The bottling line at the New Knoxville Brewing Company is in motion.
The four guys gathered here on a Tuesday afternoon all have fancy titles: the bearded, easygoing Vendely is company president; Al Krusen, tall and bushy-haired, is vice-president and head brewer; Tom Adkisson, his long hair pulled back from his impish face, is packaging and warehouse manager; and clean-cut Tommy Higdon is sales and promotions manager. They are also the complete staff roster at New Knoxville, which means that several days a monthhowever many are necessary to meet demandtheir duties are much more narrowly defined.
Krusen puts the bottles on the belt. Adkisson monitors their passage through the filling station, a merry-go-round that picks up each bottle, fills it full of beer, and sends it down the line to be capped, sprayed clean, and slapped with a label. Higdon checks the final product to make sure the fill levels are right and the labels are straight. Then he puts them into boxes holding four six-pack containers apiece. Vendely, his calf-high rubber farmer's boots guarding against the rivulets of water that run along into a drain in the middle of the room, closes the boxes, then seals and stacks them.
This is the world of microbrewingreal microbrewing, not the fake small brews perpetrated by Anheuser-Busch and Coors, or even the mass-produced premium beers of Sam Adams and Pete's Wicked Ale. For two years, New Knoxville has brewed, bottled, and shipped its beers from this warehouse at the eastern end of industrial Depot Street. The company has had success both commercial and critical, winning converts as far away as Florida and taking awards at national juried conventions. But all of the acclaim hasn't yet done what Vendely and his colleagues most want to doestablish the company as an institution in its hometown. Now, with its first concerted marketing campaign and a tighter focus on the brewery's local identity, they're aiming to change that. Their struggle is a story of business in the '90s, a story of beer, and a story of Knoxville.
We didn't get the kind of response from the community, from Knoxville, that we expected," Vendely says candidly, leaning back in a chair at the plain wooden table that serves as New Knoxville's cafeteria, meeting room, and display area. "In most of the research that we did, when a small brewery started up, the community really embraced it. And this town hasn't done that."
Not out of the gate, anyway. New Knoxville has in fact built a strong and growing following in the local market, with its beers now available at major supermarkets and on tap in many restaurants and bars. But at first, it's fair to say Knoxvillians didn't know what to make of the amber beers with the bears on the label.
In the original plans, Knoxville seemed to Vendely and co. like a natural place for a microbrewery. A taste for good, hand-crafted beers had started on the coasts in the 1980s and picked up momentum across the Midwest. By the mid-'90s, it was making inroads in Tennessee. The Smoky Mountain Brewing Company (now the Great Southern Brewing Company) opened on Gay Street in 1994, and even convenience stores started selling the occasional six-pack of Sam Adams.
Vendely, a banker and financial planner by background, started homebrewing beer in the late '80s. As his expertise grew, he eventually met up with Krusen, a fellow enthusiast (and a forester by trade). But it wouldn't be fair to say the founding of their company was entirely a labor of love.
"From my perspective, I was trying to find something for the 60-plus hours a week I worked that would build some equity, that was at some point going to be worth something," says Vendely, who is at 43 the senior member of the New Knoxville team.
From the start, New Knoxville focused on English-style ales, beers with rich, complex flavors. The water they use in their beer is treated with minerals to mimic waters used in parts of England. All the grains and hops come from Britain, as does the powerful strain of yeast that Krusen scoops off the foamy tops of New Knoxville's open fermenting tanks.
The brewery itself, however, took its name from a source closer to home. The original New Knoxville Brewing Company operated on McGhee Street from 1886 to 1910. Vendely thought it apt to revive the name for Knoxville's first brewery since Prohibition. On the first New Knoxville beer labels, however, the brewery itself was de-emphasized in favor of the beer name: Swanky. The labels, featuring cartoonish bears, were only one of the beer's problems.
"We quit doing Swanky because there was a segment of people out there that didn't like the name," Vendely says. "It was a type of beer that Knoxville just wasn't ready for. It was way too flavorful."
So they regrouped, retooled the label so people would know it was a local brew, and toned down the English-style bears to more natural (i.e. unclothed) Smoky Mountain specimensalthough if you look closely, you'll see they're still holding beers in their paws. (One of the company's new bumper stickers asks, "Does a bear drink in the woods?")
The next line-up was far more successfulwith the new labels and a host of new varieties, bottle sales tripled. The dark porter, the light honey wheat, and the mellow mild ale all found fans. But the beer that made the biggest dentand has become the brewery's signatureis the India pale ale, or IPA as aficionados call it. Vendely says IPA is the number one seller in bottles and a close second to the mild ale on draft. In a review this summer in the trade journal Southern Draft Brew News, master beer judge Ed Westmeier raved, "Great beer! Exactly the right color for an IPA, a deep, dark golden. The aroma is a wonderful blend of several hops...I wish more brewers would get it this right." At the 1997 World Beer Championships, both the IPA and the mild ale took silver medals.
Still, acclaim will only get you so far. Although growth was steadyproduction has doubled each of the brewery's two yearsthey sometimes had to go far afield in search of sales. At one point, New Knoxville was distributing from Chantilly, Va. to Orlandoquite a stretch for a four-man show.
Bobby Bush, a North Carolina reporter who covers the beer industry nationally for several magazines, says many microbreweries have run into the same thing. "There's been a boom and maybe a mini-bust for some of the people," he says.
As microbrews flooded the market, grocery stores found their shelves increasingly crowded with colorful labels that often couldn't be restocked regularly or that failed to catch on with local consumers. In the meantime, Bush says, the major beer conglomerateswhich he calls "Budmillercoors"fought back with "all these so-called 'hand-crafted' beers, like Plank Road or Red Dog, or even Killian's Red, which is just Coor's with food coloring."
"It's an uphill battle," Bush says. "Right now, nationwide, 5 to 6 percent [of beer sales] are imports and microbrews."
New Knoxville didn't set out to convert the PBR and Coor's Light crowds. But they found that among the people they did want to reach, the Knoxville name presented something of a conundrum. While it sounded exoticor at least interestingelsewhere, it didn't exactly ignite the hometown crowd.
"There seems to be this attitude in Knoxville that if it's from Knoxville it can't be any good," Vendely says. "We've heard feedback from the retail sector particularly like that," he adds, adopting a skeptical tone. "'It's from Knoxville?'"
That attitude may be particularly prevalent among the natural audience for premium beerthe 25-to-45 college-educated crowd that sees drinking beer from Britain or Beijing or Baja as a mark of sophistication. What they don't understand, Krusen says, is that beer, like bread, is best fresh. However good it may be when it comes out of the vat, it's bound to lose a lot of flavor in shipping and shelf-sitting.
"The advantage we have is that craft beer is an Epicurean delight, and the beer is fresh and local," Krusen says. It's not uncommon to go into a local store and find New Knoxville beers that were bottled just weeks earlier.
So how to sell that advantage? That's where the marketing team came in. Vendely admits that up until now, New Knoxville relied mostly on word of mouth and some limited promotional materials, letting the beers sell themselves. Fortuitously, some of the people the beers sold themselves to had ideas about how to sell more of it.
Over the past year, Vendely and Krusen have accumulated an ad hoc group of marketers and designers, professionals willing to moonlight at New Knoxville for deferred payment and a steady supply of beer. One of them is Julie Hagler, by day the brand manager at Bush Brothers foods.
Hagler first encountered New Knoxville when someone brought IPA to a Super Bowl party. From then on, she was a convert. After meeting Vendely at a brewing exhibition, she realized she might be able to help the company out. "It's what I believe about marketing," she says. "If you have an extremely high-quality product and nobody knows about it, then you're sitting on a gold mine."
Vendely introduced her to other members of the emerging marketing teamincluding Chuck Morris of Morris Creative Groupand the group took to meeting every Tuesday evening, brainstorming slogans and logos over cold bottles of beer.
The result is a campaign designed to make New Knoxville seem prestigious and approachable at the same timeplaying up its awards but also its personality. Morris came up with a new slogan"NooKaBooCa"incorporating the NKBC acronym. They also want to play up the guys themselves, a lą Plank Road except for real.
"I would hope people get to know who Ed and Al and Tom and Tommy are and give them their due," Hagler says. "Lynchburg, Tennessee, has made a lot of hay out of the Jack Daniels distillery guys being nice, normal guys. And people make it a point to go visit the distillery."
In fact, New Knoxville is getting attention for precisely that reason from the Greater Knoxville Chamber Partnership. Brewery tours are available to groups by appointment, and local leaders see it as a possible tourist drawa historic step of sorts for a city that has spent most of this century disapproving of alcohol (officially, at least).
"They've kind of taken us on as a project to help promote us and get additional capital," Vendely says. "It ties in with economic development, tourism, developing a small local business that is out there trying to promote Knoxville."
The president, vice-president, warehouse manager and sales manager of New Knoxville Brewing Company are taking a break for lunchtake-out food in styrofoam containers from the Philippine Connection on Magnolia Avenue. They're talking brew lingomaltodextrins, esters, how honey can "dry out" a beer. After 45 minutes or so, it's time to go back to the bottling line. They figure to crate up 380 cases today.
They take their positions along the line, and Krusen gets ready with the first batch of bottles.
"All right, guys," he yells.
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