Sam Adams' Jim Koch And Other Billionaires Talk About Why It Pays To Manufacture In America
Samuel Adams, the Boston-based patriot who helped organize colonial resistance to the British, is synonymous with Independence Day to some people. But Jim Koch, the billionaire founder behind The Boston Beer Company, thinks his company — whose flagship beer is named after Mr. Adams — should also be kept in mind on a day celebrating revolution (and not just because there will be many cracking open cold ones come Thursday)
“I’m competing with imported beers and foreign owned global brewing conglomerates. And I wanted an assertively American name,” said Koch, who is credited as the “founding father” of the American craft beer movement. "Samuel Adams was a revolutionary and he was also a brewer. I hoped that I could start a beer revolution like Sam Adams had started a political revolution.”
Koch’s Boston Beer and other craft breweries aren’t the only ones getting rich on American manufacturing. Indeed, despite headlines and politicians claiming globalization has doomed U.S. businesses, American manufacturing still matters. Nearly 13 million Americans still work in U.S. manufacturing, or 8.4% of the workforce, according to the latest Bureau of Labor Statistics figures. Food manufacturing employs 1.6 million Americans, making it the second largest sector after transportation, and is only growing.
Rob Scott, director of trade and manufacturing policy research at Washington-based think tank The Economic Policy Institute, said that American manufacturing is still an important part of the American economy and one that food and beverage companies are particularly well-positioned to harness.
“In food processing, weight and distance matters,” Scott said. “We produce most of what we consume here.”
This has not been lost on several of America’s richest, who have amassed fortunes from manufacturing food in America. In honor of July 4, we spoke to six food billionaires and their companies about why in an age of outsourcing, it’s still good business to manufacture in the U.S.A.
All net worths are recent Forbes' estimates.
Don Vultaggio
Net Worth: $3.4 billion AriZona Beverages
The majority of his AriZona products are made in America, including over 90% of those sold domestically. Cofounder and chairman Vultaggio says it’s the right thing to do: “We’re proud to be Americans and we’re proud to produce in America because we believe if you can do it, that’s what you should do it.” At the same time, he notes the bulkiness of iced tea such as his, plus the desire to keep things fresh, makes going overseas impractical. “We have over 40 plants we produce with in America because we have to get close to market,” he said. “If you’re making a product that’s heavy to ship from offshore, it’s not like making a t-shirt in China.”
Lynsi Snyder
Net Worth: $3 billion In-N-Out Burger
All of the major components of In-N-Out’s eponymous burger are made in the U.S., from the beef to the buns to the cheese (though some of the tomatoes and chilies come from Mexico), according to In-N-Out Burger’s Vice President of Quality and Supply Chain Alex Frumusanu. The signatures patties and spreads are made in company facilities in California and Texas. For In-N-Out, freshness is paramount — the company’s rule is that all new restaurants fall within a day’s drive of the nearest warehouse. This means production isn’t just confined to the U.S., but the American West. “I don’t see us stretched across the whole U.S. I don’t see us in every state. Take Texas—draw a line up and just stick to the left. That’s in my lifetime,” In-N-Out President Lynsi Snyder told Forbes last year.
Jim Koch
Net Worth: $1.4 billion Sam Adams
While Koch is credited with launching the craft beer movement, he says it wouldn’t be possible without American ingenuity. “Everybody talks about STEM. We should think about STEAM and the A stands for artisanal,” said Koch, who samples every batch of beer at his brewery. “We can make extremely high-quality products here in the US at world class levels of quality with American innovation and creativity.” For Koch, who still produces 99% of his beverages in the U.S, American manufacturing is about more than good business. “One of the things that I’m most proud of is that I wake up every morning and I realize that there’s almost 2000 families that depend on me making the right decisions, and growing and innovating,” he said. “I’m very proud that we brought good jobs and kept them here in America. The more people who benefit from your success, the more success you’re going to have.”
Henry Davis
Net worth: $1.3 billion Greater Omaha Steaks
Davis, the president of beef supplier Greater Omaha Packing Co., said he keeps his operation in Omaha, where his grandfather started the business nearly 100 years ago, because that’s where the cows are plentiful. “This puts me in the middle of the highest quality cattle in the world,” he told Forbes in an email. Davis said other countries take note of this quality, which is bolstered by the presence of US regulatory bodies. “As I have traveled the world visiting customers of Greater Omaha, I have seen the confidence and faith in the USDA and the FSIS inspection systems which adds great value to my products,” he said. But in the midst of a trade war, Davis is worried the American allure is dimming. In 2017, Greater Omaha was the first American beef to land on Chinese shores after a 14-year embargo, a deal for which Trump took credit. But currently, Davis is skeptical Trump’s trade policies are paying off. “The trade tension and threats to change tariffs has encouraged my customers in other countries to seek backup suppliers in the event of the implementation of prohibitive tariffs,” he said.
Richard Yuengling
Net Worth: $1.3 Billion Yuengling beer
Dick Yuengling’s great-grandfather founded D.G. Yuengling & Son in 1829 in Pottsville, Pennsylvania. America’s oldest brewery still operates in the small Pennsylvania town, and all of Yuengling’s beer is made in America. Dick, the company’s current president, has always been proud of the family’s long heritage. “From the time, I was a kid, I was infatuated with it,” he told Forbes in 2016 of his desire to stay in the family business. Keeping manufacturing close to home is essential for Yuengling, who is a perfectionist about his product, spending 11 to 12 hours a day at his factory. “All of Yuengling's Beer is manufactured in the United States. We are one of the last and largest American owned breweries,” says a spokesperson.
GT Dave
Net Worth: $1 billion GT’s Living Foods
Not only does Dave produce his kombucha drink in California, but one of its most important ingredients, a fermenting probiotic called SCOBY, comes from the family kitchen. “Every batch of kombucha that we produce is from that first original culture my parents gave me in the early 90s,” said Dave recently. The entrepreneur, who grew up and brewed his first batch of kombucha in Los Angeles, still makes all his products in the southern part of the state and insists its critical that the imaginative and physical creation of a product happen in close proximity. “What a lot of companies overlook is the relationship between the content of the product, the physical packaging of the product and of course, the spirit and tonality of the product,” he said. “In my mind, I believe the most iconic products have a cohesive, uninterrupted connection.”
