Bringing Self-Management to the World of Craft Beer
“We will embrace and refine the philosophy [of Organizational Self-Management] as it works for the company. Each employee will be held accountable for their actions for setting, tracking and reporting performance-related goals to one another, ultimately strengthening the mission of the business.”—Sudwerk Brewery
Sudwerk Brewery was reborn in 2012, after being founded in 1989 and producing award-winning lagers for the previous twenty-three years. Its strategy was to fill a void for high-quality lager beers in the existing craft beer market, which is generally dominated by ales that can be less capital intensive and less time consuming to produce. Sudwerk’s strategy is to become California’s premier craft lager brewery.
According to the Brewers Association (BA), the national governing body for small and independent craft breweries, the U.S. is currently in the largest craft beer boom since pre-Prohibition with 2016 retail sales at over $23.5 billion, up 5% from the prior year. In the overall craft beer market, California commanded 18% of retail sales. Craft breweries are defined as small, independent and innovative companies that use traditional ingredients and brew less than 6 million barrels per year (1 barrel = 31 US Gallons). Is craft beer a viable long-term business? Currently, craft beers are 12.3% of the total U.S. beer market, up from only a 5.7% market share in 2011.
Trenton Yackzan (grandson of one of the original Sudwerk founders) and his childhood friend, Ryan Fry, had an opportunity to take over the operation in 2012 with new investors and a laser focus on high-quality lagers. A clear opportunity existed in the burgeoning total beer market of over $100 billion dollars. As Sudwerk says: “Opportunities are not missed—they are taken by others.”
Strategic assets include the following:
- Strong regional brand serving the local market for over 25 years
- 100,000+ U.C. Davis graduates living in the SF Bay Area who know the brand
- Underutilized state-of-the-art brewing equipment operating at 1/3 capacity
- World-class brewmasters (U.C. Davis Master Brewing Program graduates)
- Commitment to Organizational Self-Management
Yackzan and Fry have intentionally adopted the philosophy of Organizational Self-Management for running their business, treating all team members as sentient, self-organizing professionals and allowing them to coordinate their activities with others absent directives from managers. Their strong belief is that collaboration, accountability, transparency and clarity can be achieved through voluntary agreements between independent agents—creating great teamwork and a positive sense of self-worth.
Methodologies and Tools used:
- Self-Management Education
- Informal Peer Agreements
- Mentoring and Coaching
- Principle-Centered Leadership
- Expanded Revenues 366% from 2013 to 2017
- Expanded Sales throughout California and into Nevada and Missouri
- Received Top Gold Medal Honors in 2016 at three major beer competitions, including the Great American Beer Festival in Denver, for Funke Hop Farm Dry-Hopped Sour Saison
- Entered into powerful strategic partnerships with the Master Brewer’s Program at the University of California, Davis (educational) and White Labs, Inc (brewing yeasts R&D)
- Completed a successful rebranding (a California bear on a bike) to reflect its central location and community involvement in Davis, California—known as “The Bicycle Capital of America”.
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