Cover Story: Sierra Nevada Brewing Co.
“ It’s been 30 years of hard work,” says Ken Grossman, Sierra Nevada’s founder. “A little bit of timing â€” we were sort of at the right place at the time. And I think our consumers have liked the styles of beers that we’ve come up with.”
Some of Sierra Nevada’s proof is that its Pale Ale leads the craft beer category as the No. 1 selling craft beer. Sierra Nevada Pale Ale posted more than $81 million in sales, up about 2 percent, in grocery, drug, mass merchandise and convenience store outlets, excluding Wal-Mart, for the year ending Dec. 27, 2009, according to Information Resources Inc., Chicago. Sales for Sierra Nevada’s seasonal beers grew nearly 22 percent in 2009 to $17.8 million, IRI says.
Sierra Nevada sold about 720,000 barrels in 2009, and is hoping to achieve about a 7 percent growth rate this year, Grossman says.
Celebration of craft
In its 30th anniversary year, Sierra Nevada intends to pay homage to other craft brewing pioneers, who help put the hundreds of craft brewers back on the map.
This month, Sierra Nevada will launch the first of four beers in a collaboration series with craft brewing pioneers: Fritz Maytag, owner of Anchor Brewing, San Francisco; Jack McAuliffe, founder of the no-longer-in-operation New Albion Brewery; and authors, homebrewers and beer advocates Fred Eckhardt and Charlie Papazian.
“Those pioneers were very instrumental in showing a way forward for the current industry that we have today,” Grossman says. “It’s our way of saying, ‘thanks,’ and being able to give some credit to some people who really jump started the whole craft movement.”
Grossman started out as a homebrewing hobbyist, and then opened a supply store for homebrewers and winemakers in the mid-70’s. When the craft brewing industry started to develop, Grossman visited Anchor Brewing and New Albion. The visits inspired Grossman to establish his own brewery, and he sold his homebrew shop and began to make plans to open a small brewery in 1979. In 1980, Sierra Nevada started brewing.
Leading up to the craft movement, beer had been moving toward being a generic product, viewed similarly to milk, Grossman says. When the founders of the craft brewing industry began, a trend toward artisan products had started across food, tea, bread and wine, he says.
“There was a certain percent of consumers that want different styles and want different types of beers that had been available in the past or were available in other parts of the world,” Grossman explains. “I think the consumer was ready for the availability to sample different styles.”
Sierra Nevada’s homage to the founders of the craft beer movement will begin with its first beer under the Sierra 30 label â€” Fritz & Ken’s Ale. Maytag joined Grossman at Sierra Nevada, and the pair refined the recipe for the beer together.
“We wanted to do something that was a bit different and unique, so we’re putting it in a bottle with a cork finish, and making a fairly robust stout together,” Grossman says.
Described as robust and hoppy, the ale pays tribute to the first five-barrel batch of stout Sierra Nevada produced in its brewery and the dark stouts from Europe that Maytag enjoyed drinking while he was purchasing and rebuilding Anchor Brewery in 1965.
Sierra Nevada also will be working with Papazian and Eckhardt. Grossman anticipates creating a strong lager to pay homage to Eckhardt’s work in documenting lagers. Sierra Nevada and McAuliffe also will collaborate to create a barleywine-style ale, similar to a stronger ale that McAuliffe used to brew for parties.
The first three beers will be released periodically throughout the year, and the final beer, which Sierra Nevada is producing itself, will be released to coincide with its anniversary on Nov. 15. The Anniversary Ale will be a unique barrel aged blend, Grossman says.
All of the limited-release 750-ml. cage-and-cork bottles will be available at select retailers and beer-centric bars. The proceeds of the beers will go to benefit charities chosen by the four pioneers.
“The whole idea of doing this was really to honor the pioneers who got the craft movement started, and we figured let’s let those people designate a charity and we’ll donate the proceeds to a charity,” Grossman says.
In honor of its anniversary, the brewer also is working on a nationwide toast on Nov. 15.
Last year, Sierra Nevada introduced two new beers to its year-round portfolio, marking the first changes the brewer made to its year-round lineup in more than a decade.
“We had a lot of these beers available in our restaurants, and they just weren’t widely distributed â€” they were only draft products,” Grossman says. “We got a lot of demand and interest for some of those brands and up until then just hadn’t wanted to, I guess, complicate our lives by adding more brands to our portfolio. We realized that the consumer really is looking for different styles of beers to try, and there is a lot more experimentation taking place today than there had been. There are brewers who are meeting those consumer demands, and we thought we were sort of missing an opportunity. We decided to spread our wings a little bit and take some of the brands we had been playing with at our restaurant and pub operation and start packaging them.”
Sierra Nevada first released Torpedo Extra IPA. The American IPA receives its name from a long cylinder device Sierra Nevada calls the “hop torpedo,” which it invented at the brewery to infuse fresh hop aroma into the beer as it ages, Grossman says. The brewer packs fresh cone hops into the large stainless steel vessel and circulates the beer to extract some of the aromatic oils to give the beer a unique character and flavor, he says. Sierra Nevada brews completely with whole-cone hops, which offer subtle flavors and complexities, the brewer says. Designed with a mixture of hop varietals, Torpedo Extra IPA has layers of flavors ranging from citrus, herbs, black pepper and pine, with delicate hints of tropical fruit. Torpedo is a deep reddish-gold color, with a smooth and bready malt presence and over-the-top hop aromas, the brewer says.
Sierra Nevada next launched Kellerweis Hefeweizen into its year-round portfolio of beers. The brewer experimented for several years with different strains of wheat beer yeast from Europe and had gone on a pilgrimage to Germany to meet with some traditional wheat beer brewers. In the process, Sierra Nevada perfected its wheat beer style with the help of yeast from a small brewery near Nuremburg, Germany. In addition, the brewer realized the advantages of making wheat beer using the traditional system of open fermentation.
“It is fairly unique these days to have small, square open fermenters,” Grossman says. “It enhances the flavor characteristics of the yeast with the fermentation system that we use.”
Kellerweis is a light beer with deep complexity of flavor, and its yeast provides hints of fruit flavors and spices, including ripe banana and clove, the brewer says.
Last fall, Sierra Nevada entered into its first collaborative partnership with Dogfish Head Craft Brewery, Milton, Del., to release Limb & Life, a draft-only beer, and Life & Limb, which released in 24-ounce bottles and limited draft. Over the years, Grossman and Sam Calagione, Dogfish Head’s president and founder, had become friends in the industry. Life & Limb and Limb & Life were dedicated to the family of beer drinkers and enthusiasts who continue to support the entrepreneurs and pioneers who are shaping the craft brewing community, the brewers said. The two beers were brewed at Sierra Nevada and released through Sierra Nevada’s distribution network.
“The camaraderie in the craft brewing industry is something that we’ve benefitted from going back to our founding,” Grossman says. “The help we got from Fritz Maytag and Jack McAuliffe and even some of the major breweries back when we were first trying to get established was instrumental in us getting up and running and to our success. I think the craft brewers have a very congenial relationship even though we compete against each other, we do help each other out. Even the large brewers have been helpful to many small brewers over the years, so I think it again shows that we’re partners in this, and there are things that we can learn from each other and hopefully help the whole category and help the industry rise together. The ‘lifting all boats’ theme for breweries â€” there is some relevance there.”
Transparency, social responsibility and sustainability play a large role in Sierra Nevada’s operations. Sierra Nevada has pushed to generate its own electricity, and is up to 90 percent of its power being produced at the brewery, Grossman says. This year, the brewery is building a new warehouse for cold storage beer that will feature an entire roof covered with more than 11,000 solar panels in place by the end of the year. Read more on Sierra Nevada's Chico, Calif. plant.
Sierra Nevada also is in the process of putting in a large garden to grow produce for its restaurant as well as a composting facility to produce its own compost. In addition, the brewer is researching a system that produces methane from spent grain to provide its own gas from its waste products.
“As a manufacturer who uses a fair amount of resources, from water and energy and other raw materials, it’s just as important that we do as good of a job in limiting our waste as being efficient in our operation,” Grossman says.
This year, the craft beer segment is expected to continue to perform well as consumers gain a greater awareness of beer and brewing styles, and craft brewers push the envelope by creating new styles and innovating from old styles.
“The consumer is demanding it, and the brewers are providing and creating a lot of excitement and interest around the things that they are doing,” Grossman says.
Craft brewers also have been able to perform well while other beer segments have struggled.
“The consumer appreciates the authenticity of what we’re doing,” Grossman says. “…There are many of them who are very, very passionate about beer and the breweries that they buy beers from. So it seems like they haven’t changed their buying habits as much and maybe sort of have refocused on beers they feel are giving greater value for the dollar.” BI
Related Links: Plant Focus: Sierra Nevada's sustainability initiatives and 2010 Beer Report: Sub-premium, crafts lead the way.