The rise of the Sierra Nevada Brewing Co. is in many ways a classic American success story. The company was born out of founder Ken Grossman’s passion for the process and product of craft brewing and systematically innovated its way step-by-step over market hurdles. In other ways, however, Sierra Nevada is also the story of the rise of a very non-traditional business – one that had sustainability at its core decades before it became popular – and now, as one of the nation’s oldest craft brewing companies, stands perfectly positioned to appeal to the “new food consumer” that cares a lot more about how the food and drink they buy is made and where it comes from.
To learn more about what Sierra Nevada is doing on sustainability (and it’s a lot) – and what they have learned that might help other brewing companies, I talked with the company’s Sustainability Manager Cheri Chastain.
CBB: You have a business that sends almost nothing to the landfill. How is this possible – and does this have financial as well as environmental benefits for the company?
Chastain: Environmental concepts have been drilled into us from the beginning. We divert 99.8% of our “waste” material away from the landfill. Within the brewing industry, that is a realistic number to achieve. It includes spent grain, leftover from the brewing process, which is a great source of feed for cattle and other livestock.
In addition to benefiting the environment, there are also significant financial benefits. For every ton of waste sent to a landfill, tipping fees are charged. After including tipping fees, bin rental, waste hauler fees, it is about $120/per ton in our region – so it behooves you to keep material out. Additionally, we pre-sort waste materials (cardboard, plastic, glass) and are then able to broker and sell them as a commodity for recycling.
CBB: You have a number of sustainability initiatives you focus on. How did you choose the areas you are working in? What is your process for reviewing/adding other priorities to this list over time?
Chastain: The priorities and goals come directly from the owner, Ken Grossman. It’s just who he is – he has a strong environmental ethic, but he didn’t have a formal education or training in sustainability. We continue to add sustainability projects and ideas on the fly.
I report directly to Ken and help develop ways to track our progress. My background is in environmental geography.“Sustainability is not 100% about tree hugging hippies. It’s about your ability to sustain something – whether it’s a business, culture or lifestyle – so employing ways to reduce your operating overhead is a way to offset some of those costs. That’s an important thing. Being resourceful and creative with resources is a natural fit.”CBB: It seems that the craft brewing industry is far more in sync with sustainability as a core way to operate a business than many other legacy food companies. What is your opinion on why that is so?
Chastain: My personal view is that the typical craft brewer also tends to have an adventuresome, outdoorsy spirit to them and has a connection to people around them. The business relies on connecting to high quality ingredients and local sourcing. It is an innovative and progressive industry made up of a lot of people who think this way.
Sustainability is not 100% about tree-hugging hippies. It’s about your ability to sustain something, whether it’s a business, culture or lifestyle. So, balancing your economic stability with environmental protection and social equity all need to be factored into decision making. Being resourceful and creative with resources is a natural fit.
CBB: Tell me about what Sierra Nevada does on the social side of sustainability with your workers and the community.
Chastain: For our employees, there’s a huge list of things the company provides. We have a really active wellness and safety department. We have wellness activities and information that we regularly share with employees focusing on food and exercise, and how these things affect health. For example, we took control of our vending machines, which now have healthy options in them. We are a smoke-free environment, but we will help pay for products that help our employees quit smoking.
We have a free onsite health care clinic and massage therapy. Seven years ago, we launched The Oasis onsite health care clinic that has a dedicated physician with staff that can see employees five days a week at no cost to employees. We also provide access for the employee’s spouse, children and roommates. Employees can use the service anonymously.
Since the clinic is located onsite, we are able to eliminate a co-pay for the employee or family member. This service also reduces our overall healthcare premiums and time away from work for employees, who can drop in for 15 minutes to address an issue like back pain or check out a potential infection. By cutting through the hassle and expense of getting in to see the doctor, this service helps our people deal with small problems early and, hopefully, avoid the progression into bigger health problems.
In addition to the clinic, if employees opt-in to a process to get a thorough health screening, they can cut their healthcare premium in half. Having the combined program (clinic and screening), we are seeing the number of claims going down as well as the severity of claims and directionally seeing health care cost going down.
Our experience has been that if you develop healthy lifestyle habits, you avoid a lot of healthcare problems. Overall your health care costs come down. We are now finally able to see the impact we are having on health costs.
Also, with every pay check, employees earn beer bucks and the company offers employee-only Beer Camps. There is also a generous retirement and profit-sharing program that the company has in place as well.
CBB: This is incredible! I’ve never heard of a benefits package like this – have you?
Chastain: We have probably the best benefits package out there. We talk about what we do in our CSR report – but we struggle with how much to promote that.
We do this stuff because it is important to us, not for the marketing value or the PR. The marketing benefit is something that we struggle with. We want people to buy our beer because it’s really good beer, and if they find all the other stuff we are doing appealing, and it makes them like the brand better, that’s great.
CBB: Looking at the next 20 years, what it takes to be “sustainable” will change, especially in certain areas where water is already scarce. What is your plan to manage the resource challenges that face your industry? Is this an individual company effort, or is it an industry-wide effort?
Chastain: Our industry does face challenges around certain parts of our supply chain, especially looking out into the future. Sierra Nevada consumes more whole cone hops (as opposed to using hops extract) than any other brewer in the world probably. There are not enough organic hops or barley to supply our demand.
To address challenges, there needs to be a company-specific effort around what we can control, combined with a larger industry-wide set of actions, especially on water. On the company-specific side, Sierra Nevada installed four 250-kilowatt co-generation hydrogen fuel cells at the brewery and began down the path to clean, consistent energy creation. To date, the brewery is powered by more than 10,000 individual solar panels that create more than 1.5 megawatts of AC electricity.
As an industry, we are working through the Brewers Association, which has a technical committee and a sustainability subcommittee. There are maybe 11 breweries on the sustainability subcommittee that I am co-chairing, and we have all come together to better engage the industry on sustainability practices.
Staying true to the “share-and-share alike” ethic, other brewing companies can learn about industry best practices through how-to manuals on topics like energy efficiency, water use and waste management that are available for free online. The group is also working on a green building manual, a wastewater-specific manual and an industry benchmarking study.
CBB: How have your customers responded to the sustainability measures you have pioneered? Do you have any evidence or feedback that these are important to them?
Chastain: We don’t have a lot of evidence about how our customers react to our sustainability performance because we do not track that information since we are not doing it for marketing purposes. Still, we have a lot of anecdotal reports that customers love it.
CBB: Craft breweries are legendary for the bond they seem to share with each other – is that true?
Chastain: There does seem to be a unique culture surrounding the craft brewing industry: an industrywide camaraderie and a sense that when one succeeds, everyone succeeds. This doesn’t seem to be common in other industries. There is a great sense of friendship and collaboration that doesn’t just apply to our beer, but to everything including shared information with other craft brewers on machines, equipment and processes.
Come back next week for case study #2 in our series: a look at what Stone Brewing Company has been up to on sustainability.
Thanks to Sara H Harper, Director of Sustainability Solutions at K•Coe Isom for contributing this feature.