Wicked Pete sells $69 million in beer; chocolate is next

Comfortable working in Silicon Valley and reluctant to start his own company, Pete Slosberg established three objectives when a friend prodded him into marketing his home-brewed beer: create a gold-medal product or service; get in on the ground floor of a new industry or segment of one; and treat the product or service with reverence and everything else with irreverence.

Slosberg, who drank beer only after discovering microbrews in the 1980s and whose partner still does not drink alcohol, says the two of them got lucky. Financing their own initial investment, they launched the first batch of Pete’s Wicked Ale for $50,000 in 1986. Thirteen years later, they sold the company to the Gambrinus Company of San Antonio, Texas, for $69 million.

Speaking before 100 GSB students sharing pizza and his former company’s suds at Hyde Park Center on February 23, Slosberg said just a dozen microbreweries and brew pubs existed in 1985 but had enjoyed annual growth of 50 percent in their first five years. We thought maybe this is something we can get into and give it a whirl, he said. We wanted to try to make a world-class beer, but have a little fun.

Using Silicon Valley chip designers as a model, Slosberg and his partner elected to outsource manufacturing and focus on what they did best: marketing. Borrowing from Ben & Jerry’s Homemade Ice Cream and a popular comedian, they chose the name Pete’s Wicked Ale and branded bottles with a pretty funky label bearing Slosberg’s own white dog on a purple backdrop, an image he said was later borrowed to create Budweiser’s Spuds McKenzie. Thank God the beer delivered, Slosberg said. We won several Gold Medal awards. We got lucky with the idea, but had a good time.

Today, Slosberg is hoping to transfer his good fortune and early acumen to chocolate, launching Cocoa Pete’s Chocolate Adventures in 2002. Just as the big three companies capture 80 percent of the beer industry’s $50 billion market, the big three take the same percentage of chocolate’s $15 billion market. Our bet is there is room for regional player in the premium chocolate market for a low-price product with a good sense of humor, Slosberg said.

The event was sponsored by the Entrepreneurship/Venture Capital and the Corporate Management and Strategy student groups.

 

Phil Rockrohr