Many within Boulevard Brewing Company believed Jeff Krum was preparing for retirement.
Krum, Duvel USA’s vice president of corporate affairs and a 22-year Boulevard veteran, had spent 18 months months away from the brewery’s day-to-day operations after being assigned to complete special projects, such as a new visitors center and beer hall, which opened in July on Kansas City, Missouri’s Westside.
Then, in mid-August, Simon Thorpe left his post as CEO of Duvel USA, vacating a position he’d held since 2009. Duvel Moortgat CEO Michel Moortgat called Krum with a question: Would you take over the Belgium brewery’s U.S. operations?
“It was nothing I saw coming,” Krum told Brewbound during a mid-September interview at Boulevard’s headquarters in Kansas City. Krum, who was fighting a cold, spoke in a soft tone and chose his words slowly and deliberately. His head crowned with salt-and-pepper hair, Krum at times revealed a wry, gentle smile as he spoke.
“Really, my first order of business is just reeducating myself and getting my arms fully back around the business and all of its now much more complicated forms.”
So why would Duvel tap Krum, who appeared to be sunsetting, to lead its U.S. operations at a time when the craft-beer market had grown more crowded and complicated?
The answer dates back to 2013, when Krum played a key role in negotiating the sale John McDonald’s Boulevard to Duvel Moortgat. He’d built trust with the Belgian company’s executives.
“From the time they started looking at the brewery, he had already impressed them as the a really sharp business guy,” McDonald told Brewbound. “He’s one of the greatest all-around business guys that I’ve known. He’s made me a lot of money over the years.”
Of course, Krum had McDonald’s endorsement. Krum had served as a pro-bono financial advisor to McDonald dating back to 1988 when he and his father were among the brewery’s 17 initial investors.
“He was helping me out of probably not wanting to lose the money that he invested in the brewery,” McDonald joked. “Jeff really has been the business strategist for the brewery for all of these years. He’s probably saved me millions in legal fees.”
In Boulevard’s early days, McDonald leaned on Krum and Bob Sullivan, then vice president of sales and marketing, to set the fledgling company’s strategy.
“Jeff’s been there longer than anyone else in providing critical advice to help navigate a business that required constant cash infusion,” Sullivan told Brewbound. “He was really, really good at securing and financing the brewery’s capital expenditures over the course of my time there. A lot of credit can be given to Jeff for making sure that we really never got ourselves in a financial jam by overextending ourselves from a capital standpoint.”
So when McDonald and Michel Moortgat discussed who should lead Duvel USA, Krum’s name was a natural. He’d always wanted to be Boulevard’s CEO, and McDonald said the organization “needed a nuts-and-bolts guy” to lead it forward.
“Simon did a great job of doing a lot of things and putting breweries together,” McDonald said. “But we really needed a detail, in-the-weeds guys. Jeff was just stronger there.”
Krum said he doesn’t anticipate a “radical departure” from past Boulevard regimes. However, one key difference from Thorpe’s time as Duvel USA CEO will be a less aggressive approach to mergers and acquisitions, something that had been a hallmark of Thorpe’s tenure, including the purchases of Boulevard and, later, Firestone Walker.
“Right now, we’re in a sweet spot,” Krum told Brewbound. “We have some great breweries, we have some great brands, and we need to really focus on execution, paying attention to what we’ve got and making it the best that it can be and not worry right now about adding to the mix further.”
McDonald agreed: “We’ve got our hands full with what we have.”
Of course, the door is not completely shut on adding to the Duvel family should the right opportunity arise.
“I wouldn’t say that it’s closed,” Krum said, “but it’s nothing that I’m going to be spending a lot of time pursuing.”
Krum told Brewbound that his strategy for Duvel USA is to stay focused on the company’s “obsession with quality, in not just the beer but everything that we do.”
“Really, that’s kind of an overarching philosophy,” he said.
So, in 2017, Duvel will focus on the strengths of its core brands.
For Brewery Ommegang, that means continuing to make “complex Belgian-style beers” with “measured innovations where it makes sense,”
“I think there’s some real opportunity for iconic brands like Duvel that are well known and well respected to make some hay over the coming years,” Krum said. “It’s fair to say Duvel has gotten less attention in recent time than it deserved. It’s a matter of emphasis and setting priorities and being smart about picking opportunities. We’re not going to sell a lot of Duvel in c-stores, but there are plenty of accounts where it does have a place, and we will be focusing hard on those.”
One Duvel-owned property that Krum won’t have to worry much about is Firestone Walker, which is up 48 percent in 2016, according to market research firm IRI Worldwide. Krum said he’s planning to take a hands-off approach and allow brewery founders Adam Firestone and David Walker to retain control of the brewery’s day-to-day operations.
“Fortunately, that’s not something that I need to worry about,” Krum said. “They’ve got their arms fully around that business. That’s not to say we won’t collaborate and integrate, but they’re continuing to run that business as a largely separate entity.”
Meanwhile, Boulevard will continue to push a thick portfolio of beers in 2017, focusing on core brands such as Tank 7 while continuing to innovate and releasing 13 new beers. However, the lineup will begin to evolve: Boulevard is ceasing production of Smokestack staple Long Strange Tripel and the once-popular limited-release seasonal Chocolate Ale.
“Brands, especially nowadays, have life cycles,” Krum said. “Chocolate Ale was a phenomenon such that we’ve never experienced. But we only have so much human capacity and bandwidth.”
More lineup changes are likely to come in 2018. Boulevard brewmaster Steven Pauwels told Brewbound that it’s time to slow down the innovation.
“We have to be smarter about it,” Pauwels said, “and I think that’s what we’ll do in 2018.”
Krum added that Boulevard won’t be releasing new beers just because of the flip of a calendar page.
“We want to be thoughtful about it and do it because it’s the right thing to do,” Krum said, “and because the beer needs to go out into the world and not because we have a hole that we have to fill.”
For the Boulevard brand, an ambitious strategy of adding new markets, which put Kansas City’s biggest brewery’s beer into 37 states, will also slow, Krum said.
“We will undoubtedly continue to add new markets where it makes sense,” he said, “but we’re not going to try to add those remaining 13 states in the next two years or anything like that.”
The look of Boulevard’s beer has already evolved with an ongoing packaging refresh. The brewery has also begun to de-emphasize 750 ml. bottle releases, transitioning the popular Bourbon Barrel Quad to a year-round release in 4-packs of 12 oz. bottles. Imperial Stout will receive similar treatment next year. The changes were due to an “undeniable” decline in demand for large-format bottles, Krum said.
“Clearly the consumers are speaking and saying, ‘We prefer to not have to open a 750 ml. bottle. We’d rather have it in 12 oz. format,’” he said. “So that’s the direction that we’re heading.”
Boulevard is also pushing forward with plans to build a dedicated facility for canning its beer on about an acre of vacant land located on the south end of its Kansas City campus that will serve as an addition to Brewhouse No. 2, Krum said.
“We’re hoping to break ground this spring,” he said.
When the project goes live, it’ll be one — of many — under Krum’s direction.