SOUTH BURLINGTON, VT
An Industry Life: The Beverage Journey of Mark Hegedus to Magic Hat & their return to relevancy
INTERVIEWED MARCH 6, 2018
AT THE ARTIFACTORY – SOUTH BURLINGTON, VT
From Pepsi and Red Bull to Coors to Deschutes and Goose Island, Mark Hegedus has been a beverage industry journeyman. With decades and thousands of miles under his belt, he’s seen it all and seemingly drank it all. Born and raised in Chicago, Mark has since spent time all over the U.S. helping businesses get back on track, and to grow strategically. In fact, he helped maintain the integrity of the Goose Island brand and innovation after their sale to A-B in 2011. And in his latest–and current–role, he’s been tasked with righting the ship at craft beer stalwart Magic Hat Brewing Company, in South Burlington, Vermont. For a brewery that admittedly lost it’s identity and innovative brewing charm, they’re now poised to again play the role of leader in the craft beer space, and not just ‘the brewery that makes #9.’
We caught up with Mark in Vermont to help document his extensive career path, and discuss his plans for getting folks excited about this original Vermont brewery again. And while he admits it will take regaining trust, fandom, and market share, he’s confident that’ll happen in part by letting his team get back to being who they are: quirky, innovative and ‘weird.’
Mark, you’ve had a long path that got you into the beer industry–what’s the CliffsNotes version of that beer journey?
Let's see, the short version of my life… I grew up in Chicago, a South Sider and a White Sox fan, still–and my wife grew up in Boston, so all my kids are Boston sports fans… We’re all for the 'Sox'. So, we just discuss who's got red and who's got white.
...But yea, grew up in Chicago. And then after a short stint with Procter and Gamble got into beverages–first soft drinks with Pepsi and then got into big beer with Coors, who moved me around the country from the East Coast out to Colorado.
Was that just a natural transition within the beverage industry or were you trying to go in a specific direction?
I've been thankful that my wife has been willing to move a lot. You know, obviously, it's not something that's available to a lot of people. When there was an opportunity to grow into a different position at Pepsi, or Coors, I was able to take it, and travel for it. I started in New England, and then moved to Ohio, then Indiana… And then in Colorado I had four different positions at the headquarters. I was able to keep growing, keep learning. I wouldn't be where I am if it wasn't for taking those kind of weird paths through my life.
After your long stint with Coors where did you progress from there?
Well, Red Bull was looking to hire a new position to help handle on-premise accounts. it was really interesting because they were such a different business model than what I was used to. I met with the folks there, and just loved the culture. Immediately I just kind of said, “Wow, this is really different.” You know, I've been doing big beverage with Pepsi and Coors for 16 years, and we–everyone–did the same thing. Everything was about, ‘What's my ROI? How do I maximize my investment?’ But Red Bull was totally about about connecting to the consumer and living with this brand.
And so for me, it was a great experience. I think I got to a point where my hair was turning gray, and I'm hanging out in clubs ‘til three in the morning, “Who’s that gray haired narc hanging out in the corner?” You know, I said, “Maybe I need to slow my lifestyle,” and that's how I got back into beer.
What was next in the world of beer?
One of the great things about the beverage industry is that over time, you build out this network of folks, and every once in a while your name may come up in conversation… So, some of these guys said to me, “Hey there’s this is brewery out in Oregon [Deschutes] that’s growing and wants to expand cross country. They’ve got this position to run both the sales and marketing side of their business….”
And were you a craft beer drinker at the time, yourself?
You know that was a great thing–with Red Bull, I got to dabble. I was trying all different things because we were in accounts all the time. I wasn’t an expert at that point by any means, but I definitely had been dabbling just thanks to living in Colorado. Obviously they have great craft breweries, between New Belgium, and Odell…and I had a friend that I worked at Boulder Beer….
So when I got the call from Deschutes, I was already a big fan of Black Butte and Mirror Pond. I thought, “This is a really cool thing that I need to learn more about.” So that was it—I went out to Oregon, met those guys and fell in love with the brewery, the pub, the people… And I was fortunate enough to get brought on to take over sales and marketing at Deschutes.
You were there to witness the market really start to take off then. You must have some really great stories from, being able to see the industry really tick up.
Oh yea. One of my favorite stories–I was only at Deschutes maybe four or five months when we were in San Francisco for a national beer wholesaler meeting. I went to a bar with with Gary [Fish of Deschutes] one of the nights for a craft beer event. After a little while he says, “Hey, some of us are gonna go grab a bite to eat, you wanna join?” We walk across the street to this restaurant, I sit down to the table, look to my left, and there’s Sam Calagione [Dogfish Head]. And then Gary’s on the left of Sam… And across from Gary was Dick Cantwell of Elysian. Next to him was Kim Jordan of New Belgium… And next to Kim was Ken Grossman from Sierra Nevada… And there [pointing], where you were sitting, was Charlie Papazian, the father of homebrewing. And I’m looking around the table and just thinking, “Wow. I don’t think Coors, Busch & the Miller family were ever sitting around any table, and if they had it was probably just for a photo opp.”
And here we all were, just talking about beer, and drinking whoever’s beer was available. But we’re here, drinking beer, talking about beer and talking about the business… That for me was a kind of epiphany moment. I said to myself, “Alright, this is a really awesome place to be right now.” It was so cool because this is just about people with passion to make great beer and to take on–and change–an industry. That for me was like that moment it all kicked in, “This is gonna be a lot of fun.”
There’s an obvious atmosphere of sharing resources and insight within the craft beer world that’s unique to the industry. I can’t imagine that’s commonplace in a lot of other industries.
No, you know, I’ve been in the business world for a while. And I didn’t see this until I got into the craft beer side. Brewers are chatting on the phone all the time–whether it’s ‘Hey, somebody needs a few extra pounds of a certain hop,’ or ‘I’ve got a couple bags of malt to spare.’ Or even situational advice–’Have you experienced this or that before?’
And that’s the cool thing. Because we’re all competing for the same share of mouth out there with the consumer. But at the end of the day, we’re all trying to do really cool, fun stuff. So, our teams are able to separate the business aspect, from the passion and energy about being really creative and doing just awesome things in beer.
After Oregon and Deschutes you ended up back in your hometown, Chicago, working with Goose Island…
Yea, it was a weird how it happened actually. My wife and I had gone to see a movie while we were in Bend, that was set in Chicago, and you know, it had all these great shots of the city and the neighborhoods… And while we were walking out of the theater that night, I said to my wife, “I never thought I would move back to Chicago, but man they did a great job with that movie–making the city so attractive…” And the next morning, I got this email from Tony Bowker the CFO at Goose Island, and John Hall… I’d met John at multiple CBCs [Craft Brewers Conference] and got to know him pretty well. I was actually at the conference where he spoke right after Goose’d sold to A-B [in 2011]. I remember telling him, ya know, ‘keep the faith.’ They’d only been sold for a month at that point, and they were just getting slammed and crucified for it…
So I chatted with John again a bit down the road and he said to me, “It’s been six or seven months since A-B bought us, and now we're starting to begin having conversations about where they want to go and what we’re trying to do here. You know, there are some philosophical differences… I wanted to reach out to you because I remember from conversations with your Coors background that you understand how ‘big beer’ thinks and you also understand our side.” And he says, “I wanted to see if you might be interested in in coming to help us, because I want to protect my company.”
That was certainly an interesting time for Goose Island.
Yea, absolutely. I happened to be going to Chicago that week. I mention to John that I’ll be flying through Chicago, so how about I stop by and we can just chat. I went and sat down with those guys for about three hours. We did a little sampling of a few things there in the brewhouse and we just had a great conversation. A few weeks later we continued it…
That must’ve been a bit of a daunting task, to consider joining their team amidst such a change to their image.
I looked at it at the time of saying you know, obviously they’re getting destroyed in the court of public opinion. Being my hometown craft brewery, I’d had them enough times previous to meeting John [Hall], and I always really liked what they were doing–with their sours…their Belgians–I mean Sofie is still one of my favorite beers.
I really wanted to help John. This could be really interesting, to prove all the naysayers wrong. A big company, like A-B–let’s make sure they don’t destroy ‘Goose.’ You know the standard operating procedure: big guy buys the small guy, and turns the small guy into the big guy…and whatever happens, happens. Well, obviously, in the craft world, that's destruction. That's death.
Small task, right...?
Haha, right, small task. I do have to give those guys [AB InBev] credit. Obviously, they had made mistakes regarding brewery purchases in the past–but, they learned and they listened. And when we got in there, they basically said, “Hey, your job is to tell us what to do or what not to do. Because we don't want to turn Goose into us.” They're like, “We need to learn because this is where beers going. This is what the consumers want. And we want to change our own culture to be more like this.”
Was there a moment where people in Chicago or the beer community at large was getting that ‘this’–the buyout–was working; and that those three things still exist in the brewery: quality, innovation, experimentation?
I think, it was when we started to see those discussions on some of the beer sites and blogs. I remember specifically, there was an incident on BeerAdvocate where I was following a chain of comments and it got into discussions about Bourbon County. For all the people saying, “Oh Goose sucks! They sold out, I’ll never buy them again”, somebody else would chime in and say, “Ya know what, why don't you send me your Bourbon County bottles–I'll send you my address.” For us that focus was always on the innovation, and doing a lot of local stuff like the ‘Fulton & Wood’ series or the collaborative stuff with the employees. We focused on doing all the things that protected the culture of the employees of Goose. Nobody was telling us how to make anything or what beers to make. That was all coming from our brewing team.
It’s such an interesting thing, that some beer drinkers would toss a brewery like Goose out the window because they sold, but then still clamor for one of their specific beers. You can’t just choose a slice and disregard the rest of the pie.
I totally understand the difference of being ‘small’ and wanting to make sure the business thrives. At what point does who your banker is define who you are? How do we get to a consistent understanding? It’s bad if you are a bigger brewery, but it's okay if you're financial interest is behind the scenes and nobody talks about it? And so, if you've got partnerships and ownerships and outside entities, then maybe you don't belong in the ‘craft beer club.’ But let's all get a little more consistent about how we apply the rules.
There is sometimes a breakdown between how we talk within the industry and how people actually spend their money.
I totally agree. I mean bottom line is–there are still millions of people in the U.S. that have not had a single sip of a craft beer. In many cases, they may have no intention. And obviously they're not going to come in and get involved in all the minute detail of what's going behind the industry. That’s why to me, it's all about making great beer and doing it the right way and engaging and empowering the team to just be who they are.
That's what I've had a blast doing–whether it was telling stories about Deschutes to our customers, or Goose Island or then getting the opportunity to integrate Blue Point when that became the next acquisition. And then, you know, I got the call from these guys here at Magic Hat.
What was the situation you walked into here at Magic Hat?
I felt bad for these guys because of what was done to them by the financial bankers who bought the brewery. These guys got just crapped on. They lost their appeal. Everything that they were…had disappeared. They’ve always been a crazy innovative company. They may not have been the top-five-best-brewery-list type of brewery, but they were the ones people looked at, and would say, “Man, at Magic Hat they put beats in a beer.” They did some really crazy stuff that was still really drinkable, and they had a great brand personality. And that's why I shifted out of the A-B group and came up here to Vermont to help Magic Hat, and start this journey. And it's been a crazy ride.
In what ways?
Well, obviously we didn't have the kind of money that A-B had to support their craft group. But I think it's also, to be very honest, people need to want to be helped and be willing to seek it out. You can't achieve that success until you, as an individual are ready to seek out getting the help to do so. Our team here in Burlington had lost their voice, they were challenged. They wanted to to have fun again, and they wanted to do great things again.
The two or three years before I got here they had some marketing people in New York where [Magic Hat backer] North American Breweries is headquartered, and the brand team–doing their research–would say, “Hey, you know, I think we need to have a grapefruit IPA,” or whatever and so they’d send the order over to the brewing team here. And you know, the passion wasn’t in it, because they're like, “They’ve got somebody telling me what to do that doesn't even live here!”
How do you go about getting the brewing team to be excited again after that?
So, I was here about 30 days and I did one-on-one interviews with the whole company, “Number one question: If you were in my shoes, and you could change one thing what would it be?” And 70% of the people here said, “Help us fix the beers. We want to make great beer again.”
And so that became our number one focus. I had the whole brewing team together and we went to dinner… We pulled every beer that we had in a package and brought it to the basement of this restaurant downtown. And I said, “Okay, starting today, no one that is not in this room is ever going to ask you to make another beer again. You are gonna make what you want to make. And we're gonna live who we are.” So we did thumbs up or down for each beer. Do you drink it? Do you like it? If you don't like it, what would you do to make it better?
And we got into some great conversations that night. A lot of the innovation that we're doing now started that night. You can't stop being who you are and expect people to still be interested.
Yea, you can definitely see that from looking across the taproom menu here. I’m drinking your ‘wine hybrid’ Saison with elderberry…
Yea, last year–2017–I brought in who has basically become our Brewmaster now, Rob Kuntz, from Sleeping Giant in Denver. He's a he's a real technician, you know–he's the guy that can take really good beer that's a ‘97’ and get it to 100. He's a scientist that knows all the little nuances. And that’s just it, for us–we’re trying to get ahead of the curve again.
Sounds like Magic Hat is getting the chance to let their quirkiness and creativity flow out in front of beer drinkers again…
That’s what it’s all about — it’s what craft beer has always been about. From the first wave of it with Fritz Maytag, Ken Grossman, Jim Koch, John Hall…all those guys. All they were trying to do was make great beer, and share it with everyone. It’s always been about innovation, creativity, and about honesty. People don’t want you to dress everything up and hide all your secrets–they want to know what’s going on. At Magic Hat, our mantra is, ‘the world is our stage, and we’ve gotta put on a show–the best damn show we can.’ It might not be the prettiest show, but we’re gonna make sure we’re putting our best foot forward. It’s like a traveling circus; the tent might look like shit, the poles are bent, it’s been all over the country. But what happens inside that tent is what it’s all about.
If we were having a conversation a decade from now, how would you hope you’d be able to describe the brewery–what’s Magic Hat look like in an ideal future?
Our goal is that five, ten years from now, that Magic Hat is writing the second chapter of the story of what our two founders, Alan Newman and Bob Johnson started. And that is: being this brewery that is slightly weird…a brewery that you can trust is going to do some really crazy innovation. Some stuff that may make you a little nervous, but you’ll trust they’re not going to put something out that is totally worthless. They’re gonna take me on an interesting journey and maybe take me into that ‘circus’, or that traveling sideshow… That I’ll get to enjoy something from Magic Hat that I know will make me feel like I am pushing my comfort, and going to my ‘edge.’ I love that kind of experience, so that’s what we’re looking for.
“#9.” It’s a beer that has such a prominent place in a lot of people’s craft beer drinking histories. How have you been able to carry that beer along and aim to maintain its relevancy?
It’s our ‘not quite pale ale.’ When Magic Hat started, it was one of just 400 breweries, and now we’re one of 5,300+… At one point I think it was the number three beer in the pale ale grocery store category, behind Sierra Nevada and Deschutes’ Mirror Pond. #9 is based off of a pale ale recipe with the fruit flavor added. Part of the mystery to it was that it was initially released as just a summer seasonal, but it was such a great tasting beer and a flavorful beer… Everyone was really intrigued as to what was in it, what made it so ‘different’. Obviously at that time there weren’t really any other beers touting fruit flavor… It always had a unique place in the market. It still has a huge fan base. We often hear from people, “I love that beer, that was the first craft beer I had in college”, etc. It’s maybe not as big as it was once, but it’s coming back in to its own a bit. We’re making sure it has that iconic taste, but with today’s profile–meaning, customers are maybe looking for a little less malt body but still be able to recognize the hop profile in it. We’re really excited about where #9 is right now.
To a lot of people, #9 is Magic Hat to them.
And I think that became part of our Achilles’ heel. When I first came here and starting just talking to people around Burlington, at bars and whatnot, they’d say, “I love #9. And I love that other beer, in the yellow box.” Or, “I love that purple beer.” They knew all the other brands by package color and graphics, but not necessarily by name. But they knew #9. Unfortunately, that brand became our sole spokesperson for so many–but that’s part of what happens when a company sells you, and they just want to scale–all they did was ship #9 everywhere. But they didn’t invest in telling our story or building our story. Our goal’s been to tell our story again, and build a full cast of characters…
Hah, you never know! Ya know, we may have to go down that path if anything just because it’s getting so damn tough to find a name that you can trademark in this business, it’s ridiculous [laughing]!
Well, I think a lot of people will be eager to see what the next chapter of Magic Hat does end up looking like.
Yea, it’s just…bringing back who we were. Alan [Newman]'s gone now obviously, but he’s been very complimentary and kind of excited about where we're going with this. This was his company. He was the central character. When I come to a brewery–and this is my fourth craft brewery–my job has always been to figure out the story, and the conflict at the center of that story. As you know, the best movies, or the best books, are where there's this great conflict that you're hoping gets resolved. At Magic Hat, it was that theatrical aspect of founder Alan Newman–a guy with yellow glasses, big beard, and a vibrant personality. He was the energy and the driving force behind Magic Hat.
But on the counter-side was Bob Johnson, his Brewmaster–a very matter of fact, straightforward, down to earth guy that just wanted to make great beer. Bob was willing to go on these creative journeys. He had the skills to make those beers really good and follow when Alan said, “Man, let's make a beer with beats, we'll call it Wacko.” So it was that great tension between the two of them, and I think you’ve gotta keep some part of that ‘conflict’ alive.
If we make great beer—if we can find a way to get ahead of the curve… If we can do that, then our personality and our name recognition and acting like who we need to be again–just a bunch of people having fun. That's what I hope for with Magic Hat.
What are you drinking if you’re not drinking Magic hat?
I was recently back out in Oregon and I bought some of the [Deschutes] Abyss variations, because I’ve always been such a fan of that beer. I’m also a big fan here on the East Coast of Maine Beer Company. They're doing some really sharp stuff. And here in Vermont, Sean Lawson [Lawson’s Finest Liquids]–is doing some awesome stuff. And if you’re in Burlington looking for great beer, you’ve got to go to Farmhouse–the best craft beer bar in Burlington, in an old converted McDonald's–they’ve been some of our toughest critics, but it’s been great. We’ve got a couple of alumni down at Foam Brewers doing great stuff too.
You know, it goes back to that initial conversation–of us in San Francisco, going out to dinner with Sam [Calagione] and Kim [Jordan] and everyone–that changed my perspective from that old business model of ‘you only drank what you made,’ to now: it’s all about exploring.
Photography by Matt Tanaka for The Hop Review.
Thanks to the Mark and Magic Hat’s Artifactory for hosting
and discussing his industry path that eventually led him to Burlington, Vermont.