August, 2000

By Bobby Bush

Goes to show, you never know. New Knoxville Brewing Company, a popular local brand in the eastern Tennessee college town and beyond, seemed to have everything going its way. Founded in April 1996 as a distributing microbrewery, New Knoxville�s beers have won a number of awards and enjoyed a loyal local following, outselling Samuel Adams, Sierra Nevada and the imports- practically everything except the mega-brewed budmillercoors brands.

But behind the appearance of popularity and assumed success lurked a company that struggled financially. Under-capitalized from the start, president Ed Vendely never really had funds to grow the company like he wanted to. Even though 1999 production marked a significant increase over the prior year and this year�s output was on track to surpass �99 by 50%, New Knoxville (NKBC) was $350,000 in debt. Committed to the community, even with the bank knocking on his door, Ed and his dedicated staff sponsored May�s East Tennessee Brewers� Jam as that had for the past four years. And then turned to face reality. New Knoxville�s time was short, very short.

In an attempted joint venture with a local restaurateur, NKBC pursued acquisition of Great Southern Brewing Company, an old town Knoxville brewpub that had recently closed. Ed hoped to use the brewpub�s cash flow to support New Knoxville, temporarily. But the deal fell through, mired in redtape and bickering. And the clock ticked on.

But Vendely and crew had become part of the brick and mortar that insulated the steam-fired mash tun. For four years, their lives had been consumed by New Knoxville. Brewing, bottling, kegging, sales and distribution - they weren�t going down without a fight. New Knoxville wasn�t just their livelihood- it was their lives!

So Ed began his own trail of beers, meeting with local officials and downtown business people, seeking guidance and, hopefully some sort of assistance. Through his persistence, he planted the seeds of a grassroots movement. In several public e-mail letters he pleaded with city leadership to create a revolving fund for entrepreneurs, especially those locating their businesses in the still-redeveloping downtown section.

Whatever he said to whoever was listening, worked. His New Knoxville miracle is alive and brewing. Mostly by word of mouth, pledges for contributions and loans came Vendely�s way. First a trickle, then a small stream, enough to keep creditors from the door and allow New Knoxville to plan for its future. Even though the brew kettle was cold and the fermenters were empty, good things were happening.

So here�s the plan. The power of the local community�s grassroots effort was more than talk. Loyal patrons and investment-minded citizens pledged over $300,000 and provided enough money to get the brewery running again. New Knoxville beers - IPA, XX Pale Ale, Porter and Mild - hit the streets about two months after the lights seemingly went out. NKBC plans also to use the interim funding to register with the State to sell shares of the revived brewery via a Direct Public Offering. Small investors will be as welcomed as the big money traders.

Vendely was overwhelmed by the community�s response, but isn�t about to squander an opportunity. The company hopes to raise as much as $1 million to pay off old debt and institute a creative marketing campaign that will take New Knoxville to the next level of production.

When I interview Ed Vendely two years ago, I sensed that he was a man with big dreams. Taking the name of a regional brewery that prohibition closed in 1912, his goal in 1998 was to market NKBC beer in six or seven states and boost production into the 10-15,000 barrel range. I doubt his goal has changed, though the challenge has intensified.

Ed knows that this miracle, this second chance, means that he and the NKBC crew will have to work even harder and smarter than before. No one�s complaining.

Sometimes the good guys really do win. World recognized but made next door, so �Get some NooKaBooCa,� ya�ll. And check �em out at www.NewKnoxBrew.Com.

This article first appeared in Focus, a weekly paper published in Hickory, North Carolina.

� Bobby Bush