The Alchemist is a small brewery in Waterbury, VT, owned by John and Jen Kimmich, that grew from a small local brew pub to become a world-renowned brewery with a cult-like following. Their growth and success can be attributed to the effective alignment between their business and operating models. The Alchemist sells Heady Topper, a double IPA, that holds the highest ranking, a perfect score of 100, on the Beer Advocate. Heady Topper is an unfiltered, unpasteurized beer that stands out among other IPAs because it provides an accessible, high-quality hoppy taste.
The Alchemist creates value by focusing on quality, freshness, and staying connected to their local roots. Heady Topper is only sold in a select number of stores, mainly mom and pop shops, all within a 30-mile radius of Waterbury, VT. Staff from the Alchemist package the beer themselves, deliver the beer to each store in their own refrigerated trucks, and personally put each case into the cooler at the store. This gives the company direct control over how fresh the beer is and ensures that the quality of the beer is maintained throughout the delivery process. They do not ship beer and deliver all beer within three weeks of being canned. To demonstrate their commitment to quality and ensure the best taste experience for their customers, the Alchemist outwardly insists that Heady Topper be served fresh and at a cool temperature, even writing multiples times on their cans “Drink from the can!” Their operating system has been designed to allow the company to guarantee the fresh and high-quality taste that is unique to their beer.
Since Heady Topper is only sold in a select few shops in VT, it has become an exclusive commodity and something that people travel from far and wide to obtain. The Alchemist’s website lists when deliveries are made to each store, often causing there to be long-lines to purchase Heady Topper. Consumers are only allowed to buy one case, usually of four 16oz cans, at a time. The beer often sells out within three hours of being delivered and every barrel made is sold. The Alchemist’s decision to only sell their beer locally not only allows them to gurantee the quality of the beer, but creates more value through the exclusivity of Heady Topper. The beer has become so revered that there is even a website and twitter account, HeadyStopper, dedicated to “the hunt for the most elusive beer in the country.”
The Alchemist’s distribution system directly aligns with their desire to stay connected to their local community, by bringing in new consumers to Vermont businesses and allowing their community to have more access to Heady Topper than anyone else. While the brewery is mainly focused on Heady Topper, the brewers experiment with making different beers in small batches. Those beers are made available to the local community through truck sales that often happen in conjunction with town events.
The company’s emphasis on community is not just a result of its strong local roots; it is good business. The Alchemist differentiates itself by not just demonstrating a respect for the quality of their beer, but by respecting their community and their consumer. The Alchemist has relied fully on word of mouth promotion, which is driven by building positive experiences for and relationships with consumers. Their insistence to only distribute locally and emphasis on contributing to the community enables them to build better relationships with their biggest advocates. Even though they have the opportunity to set a high margin on Heady Topper, they further demonstrate empathy with their customers by maintain a relatively standard price for premium beer of around $14 for a four pack. This community focus counters the backlash that the company could foreseeably receive for its exclusivity.
A common inclination for companies that have high demand for their products is to grow as quickly as possible. But instead, the Alchemist has chosen to expand in a responsible way that stays true to their values of quality, freshness, and community. Their decision to focus on Heady Topper almost exclusively and to control their entire distribution process have been instrumental in ensuring that their business model is directly aligned with their operating model. Just recently, they announced the groundbreaking on a second production brewery of equal size with a large-capacity retail space attached. It will be incredibly interesting to see how they adjust their operating system to accommodate this increase in volume, while striving to stay true to their business model.
- WCVB: Heady Topper: Sacred Beer http://www.wcvb.com/chronicle/heady-topper-sacred-beer/33092380 May 19, 2015.
- Lorre, Rossa Maura. Munchies by Vice: This is What It’s Like to Make the World’s Most Sought-After Beer http://munchies.vice.com/articles/this-is-what-its-like-to-make-the-worlds-most-sought-after-beer June 2, 2015.
- Ramos, Nestor. The Boston Globe: Craft Beer Fans Go to Great Lengths to Buy Top-Rated Brew https://www.bostonglobe.com/metro/2015/01/25/atop-beer-food-chain-heady-topper-spurs-vermont-liquid-gold-rush/BLlk4nHgfBXkD9std009pI/story.html January 25, 2015
- Kristi. Boston.com: How to Get Your Hands on Heady Topper Beer http://www.boston.com/travel/new-england/road-trip-where-find-the-wildly-popular-heady-topper-beer/KbDEBQe020VHFOa0NxkrZI/gallery.html#slide-1 September 16, 2014
- The Alchemist’s website. http://alchemistbeer.com/
- The HeadyStopper website: http://www.headyspotter.com/
- Heady Topper review on the Beer Advocate: http://www.beeradvocate.com/beer/profile/27039/16814/