Steve Koenemann

The Magic Hat Experience

A while back I had the very great pleasure of again visiting the Magic Hat Brewery in South Burlington, Vermont. I say again, but you should understand that my visits to their facility were about 15 years apart. Though not first on the Vermont beer scene, Magic Hat embodies the essence of what is “right” about many of the brewers in Vermont. Magic Hat sits just outside Vermont’s largest city and is no longer the small brewer I visited back in 1995. As they did 15 years ago, they continue to acknowledge the importance of more than the production of fine beers for sale. The “conductors” (they do not use traditional job titles here) that I spent time with during my visit, made sure that I understood the importance of what they referred to as the “Magic Hat Experience”… a combination of manufacturing excellence, business ethics, environmental friendliness and socially responsible operations, which include how they treat their employees (they were a happy and hardworking group) as well as embracing the community that they live and work in. Many of their longest term employees (of about 120) have started somewhere near the “bottom” of the company and worked their way up.

The Magic Hat Brewery was founded in 1994 by Alan Newman and Bob Johnson. Alan and Bob met at 7^th Generation, an environmentally friendly home products supplier, which Alan co-founded more than 20 years ago. In their earliest days, Bob was responsible for the brewing and Alan handled the business and marketing aspects of the fledgling venture. From the very beginning, Alan set out to put a new spin on the drinking public’s perception of what constituted a micro-brew beer manufacturer… everything from the branding to the non-traditional styles of their beers were to be different. A quick look at their Web site (http://www.magichat.net/) will tell you that their tradition of being non-traditional continues even today. Bob eventually left Magic Hat to pursue other interests, but his original beer recipes, including “Humble Patience”, their very first beer, were the staples of Magic Hat’s sales for many years after his departure.

Mardi Gras "dummy" hanging over manufacturing floor

Magic Hat’s incredible success over the last 16 years never really ceases to amaze me. In 2009, their production and sales grew about 21% or roughly three times the annual growth rate of craft brews nationally. They have actually grown over 225% since 2004 and are now listed among the top 10 craft brewers in the US (and one of the fastest growing). They produced over 150,000 barrels of beer in 2009 and have targeted 200,000 barrels for 2010. A recent major expansion of their Vermont facilities should help make that come true. In 2008, Magic Hat purchased Pyramid Breweries Inc., a Seattle-based brewer. This merger should help make it possible for Magic Hat to meet its goal of distribution of its beers to all 50 states by 2012 a reality.

Magic Hat manufacturing floor, complete with Mardi Gras float pieces

In keeping with its community-minded focus and being a group of fun-loving folk, Magic Hat has over the years offered up several carnival-like events to the public. Their first was called “Night of the Living Dead”, a Burlington-based Halloween-oriented party, which grew rapidly in popularity, peaking at about 2,500 attendees in its final years. Their current and most ambitious community party is their annual Mardi Gras held in Burlington every year. Now in its 15^th year, the event raises money for the Burlington Women’s Rape Crisis Center. The event has grown significantly since its inception and the Mardi Gras parade through downtown Burlington this year attracted approximately 25,000 happy people. This Mardi Gras celebration is one of the largest in the US; second only to the one more familiar to the rest of you in New Orleans. A previous article of mine, “Socially Responsible Beer” highlighted this event as a part of Magic Hat’s significant socially responsible efforts in the community.

The Magic Hat beers in production the day I visited

I haven’t really talked about their beer much in this article and I don’t want to give you the impression that the beer is not an important focus of this rapidly growing company. I would have to say that Magic Hat’s approach to beer making is every bit as non-traditional as their marketing approach. This is not so much evident in how they make their beer, although 15 years ago they were fermenting their beer in large open vats, but more in the style-breaking “experimental” nature of some of their brews. They definitely have made some excellent beers over the years and some of them are near the top of my Ratebeer rating listings. You can get a sense of the tremendous variety of beers they have produced over the years by looking through the Magic Hat Ratebeer page for this brewer. Not only do the unusual names of their beers jump out, but if you look at the “commercial descriptions” for some of them, you begin to see some of the “unusualness” that I have discussed already. Their most popular beer is Magic Hat #9, a “not quite pale ale”, according to the brewer. The sales of this beer have seen 15 years of consecutive double-digit growth in the marketplace; its distributions grew by about 20% in 2009 alone.

Clearly Magic Hat’s desire to be a “different” kind of brewer works well as a business model; their track record speaks for itself. However, what I find most unique about this company is not the business model or even the beer that they produce. They are outstanding in my mind for the emphasis that they place on the very deep culture of their company and how it plays out in everything that they do. It is this “Magic Hat Experience” that makes their business model sustainable and virtually assures their future success.

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