The term “craft beer” hadn’t been coined 30 years ago when a smattering of entrepreneurs, many of them former homebrewers, turned their passion into a profession and launched the first microbreweries.

Reuse of materials, minimization of waste, equipment innovation, resourcefulness and thrift were essential if they were to have any chance at commercial success. Their early practices dovetail with the goals of sustainable manufacturing, and some are grabbing the lead in greenhouse gas reduction and renewable energy generation.

Ken Grossman was in the first wave of craft brewers. Grossman started Sierra Nevada Brewing Co. in Chico, Calif., in 1980, cobbling together used dairy equipment and packaging machines to make a distinctly hoppy beer for regional consumption.

“Our early years of frugality and forced innovation gave us no choice but to be efficient,” he says.

Business success gave Grossman the financial wherewithal to invest in high-profile renewable energy projects, which Sierra Nevada has done. But the core principles to renew, reuse and recycle permeate every production step and business practice.

With solar panels filling in the last few bits of open rooftop last summer, the brewery now boasts a solar array exceeding 10,000 panels. During June’s long, sun-kissed days in California’s Central Valley, panels delivered 247,263 kilowatt-hour (kwh) of electricity, says Cheri Chastain, Sierra Nevada’s sustainability coordinator. Another 678,266 kwh came from an on-site fuel cell stack. Operating the brewery, its brewpub, restaurant and ancillary buildings required almost 1.1 megawatt, leaving the operation 159,072 kwh short of the goal of being completely off the grid.

The fuel cells are the plant’s green-power workhorses. The four 300 kilowatt cells from FuelCell Energy Inc., Danbury, Conn., netted Sierra Nevada the Governor’s Environmental and Economic Leadership Award in 2005. In the dead of winter, the cells meet almost 90 percent of the plant’s electrical demand, and solar fills the rest. The cells are powered by natural gas, with waste heat captured and converted to steam for the brewing process. Water and CO2 are exhausted, and there are no transmission losses or carbon emissions, as would be the case if the electricity came from a distant, coal-fired utility plant.

Ambitious initiatives like fuel cells and solar arrays became feasible when production reached a critical mass.

“A small brewery can’t install fuel cells because they require a fairly stable energy load and round-the-clock production,” Grossman says. Thanks to sales, “today we’ve got more money so we can put in larger capital projects that have longer paybacks.”

Another example is the CO2 recovery system commissioned in 2005. Carbon dioxide is a byproduct of the fermentation process, and most brewers that produce 2 million barrels-plus have recovery systems that wash out the ethanol, organics and noncondensable gases before liquefying and storing the CO2. Dan Gruber, CO2 technical manager for Rockford, Ill.-based Norit Haffmans NA, recalls discussing the technology with Grossman as early as 1993. Recovery systems aren’t economically feasible for small breweries, but Gruber and Grossman kept crunching the numbers as production volume grew.

Once a five-year return came into view, Sierra Nevada began using recovered CO2 for carbonation at bottle filling, keg pressurization and counter-pressure in holding tanks. The purity is food-grade and has turned the brewery from a buyer of the gas into a supplier. Sustainability is a continuous improvement journey, and Sierra Nevada ownership now is eyeing a heat-recovery system that would eliminate the need for refrigeration by using stored liquid CO2 to condense incoming vapors. The economics are attractive, but that’s icing on the cake for Sierra Nevada, Gruber says. “Ken did this for several reasons: first, to be environmentally friendly, and second, to be a good neighbor,” he says. “A reasonable return ranked third.”

Meat and potatoes projects
Breweries worldwide routinely recycle spent grain for animal feed. Sierra Nevada takes the practice to its closed loop conclusion: Through a cooperative program with California State University at Chico, Sierra Nevada’s grain helps feed 60 head of cattle raised by UC-Chico agriculture students. Post-harvesting, the beef ends up on dinner plates in the brewery’s restaurant and taproom.

Last spring, 26 acres of barley planted a mile from the brewery were harvested. It will be malted and combined with fresh hops grown on nine acres next to the brewery.

“It would be way too challenging to do everything with locally sourced raw materials,” Grossman says, but autumn’s debut of a limited-edition beer called Chico Estate Harvest Ale is the brewery’s salute to the ideals of locally grown, locally processed food.

Hops grow best in a cool, damp climate, which is why the Pacific Northwest has emerged as one of the premiere hop-producing regions in the world. Growing hops under the scorching Central Valley sun demands large amounts of water, a resource Sierra Nevada is committed to conserving. Beginning in July, as many as 5 million gallons of treated and filtered water that used to flow to a municipal treatment plant began to trickle into the adjacent hop field. Because organic certification is being sought, the field requires manual weeding and tending. Sierra Nevada staffers pick up extra hours by tackling those jobs.

Recycling efforts also can be tedious, and California doesn’t make it easier. Until recently, staffers were required to bundle and tape old batteries to satisfy a state toxic-substances rule.

“People were having taping parties at the landfill,” Chastain says. Separating paper, plastics by grade and other materials is similarly time consuming, but the payback is both environmental and financial. Only 306 tons of waste, mostly restaurant food scraps and miscellaneous plastics, went to landfill last year, Chastain says. More than 68,000 tons were diverted, saving the company $4.7 million in disposal charges.

Creative reuses help make a successful diversion program. A barter deal was struck with local beekeepers, who trade honey for the burlap sacks used to ship hops to the brewery. The boxes in which bottle crowns arrive are flattened and sent to a supplier for the next order of Sierra Nevada T-shirts.

Efforts to boost energy- and resource-efficiency have a long track record. Heating coils replaced steam jacketing on the wort kettles a decade ago. More recently, boilers were retrofitted with online oxygen sensors and variable-speed blowers to increase efficiency and minimize emissions. T-5 and T-8 fluorescent lights on motion sensors are found throughout production areas. New warehouse and office space completed last year makes use of natural lighting, and salvageable windows, light ballasts and other building materials were donated to Habitat for Humanity for recycling. Thick concrete tip-up walls were used to eliminate the need to heat or cool those structures.

Heat exchangers and variable frequency drive systems on motors and compressors are in abundance in the brewery. Those are efficiencies Grossman has sought from the outset, when ice for production was made at night, and electric rates were low. Often, he was deploying technology that wasn’t ready for industrial prime time.

“When we first put in frequency drives 20 years ago, they were super expensive and not very reliable,” Grossman says. Today’s drives are relatively inexpensive and much more robust. They also lower maintenance, thereby lowering workplace stress. The human effect of technology must balance technical efficiency: High-pressure sodium lighting is very efficient, but workers must contend with poor color, which drove Sierra Nevada to switch to high-efficiency fluorescent ballasts.

Some projects fall into the conversation-piece category, though they also speak to the company’s values and culture. An event trailer equipped with tappers has been outfitted with solar panels to help refrigerate beer kegs. Used fryer grease from the restaurant is dumped into a biodiesel processor that takes two days to complete a 50-gallon batch.

Last April, the first diesel-electric hybrid tractor sold by Peterbilt Motors Co. was delivered. The tractor is dedicated to local delivery routes to maximize the mileage boost from the electric motor.

Public tours of the brewery are everyday occurrences. For beer distributors and other honored guests, a grander behind-the-scenes look is provided in what is officially known as the touring bicycle but more commonly referred to as the bar cycle. Built on a BMW chassis and equipped with a three-speed International Harvester transmission, the bar-on-wheels is pedal-powered by passengers seated at a dozen barstools flanking the driver in front and beer kegs in the back.

Chico is a bike-friendly college town, and many Sierra Nevada employees are alumni of the local college. Instead of pedaling to class, the company encourages them to pedal to work or on short errands to lower their personal carbon footprints. Of the 490 Sierra Nevada staffers, 90 participate in the Green Machine bike program, Chastain estimates.

Business of brewing
Grossman maintains his original devotion to hops and attachment to dairy equipment. The dairy tanks that held fermenting brew in the original brewery didn’t make the transition to the current facility, which was built in 1989 and doubled in 1998. But flowverters, the precursors to mix-proof valves in dairies, can be seen throughout the facility, and the nameplates of Fristam on pumps, Alfa Laval on heat exchangers and Mueller on tanks are everywhere.

Microbiological testing is another dairy practice Grossman has retained since the early days. The quality assurance lab now goes well beyond bacterial tests to a wide range of chemical analyses, with mass-spectrometry analyzers and high-performance chromatography equipment available. The clean-in-place system runs between batches, aiding sanitation, but contributing to the plant’s wastewater stream.

By the late 1990s, Grossman recognized the need to address the effluent issue. Municipal treatment rates had more than tripled, discharge was increasing in parallel with production growth and the need for a pretreatment system was apparent.

“We weren’t forced into it, but I could see the writing on the wall,” he says.

As one of the city’s largest wastewater generators, the brewery either had to build its own treatment plant or expect to help finance expansion of the municipal facility. An upflow anaerobic sludge blanker digester backed by an aerobic system came on line in 2002. The digester’s methane was flared until a few years ago, when it started to feed the plant’s boilers. More treatment upgrades have followed, the most recent being final filtration of suspended solids prior to hop field irrigation.

Anheuser-Busch started compressing and filtering methane-rich biogas from anaerobic digesters at about the same time Sierra Nevada was starting out, though that doesn’t necessarily mean Sierra Nevada is late to the game. Two years after Sierra Nevada began using its biogas to fire boilers, A-B’s 6 million-plus barrel brewery in nearby Fairfield, Calif., became the 10th plant in its system to reuse digester methane; two A-B breweries continue to flare the gas. And Sierra Nevada was the first brewery to attempt using digester methane to power fuel cells.

Unfortunately, gaps remain between what is technically feasible and what is doable. The supply of biogas is variable, depending on brewery throughput and atmospheric conditions. Biogas must be blended with natural gas, and the blend is constantly changing. The controls technology delivered by FuelCell Energy wasn’t up to the challenge, and the effort was suspended last spring. The fuel cells now are running entirely by natural gas, with the biogas rerouted to boiler use.

It was neither the first nor the last sustainability setback the company likely will experience. Hydrogen batteries for lift trucks were demonstrated unsuccessfully a few years ago. Technology to turn spent yeast into plastic was too immature, despite Sierra Nevada funding of university-level development work. Undeterred, the brewery is working with E-Fuel Corp. of Los Gatos, Calif., to recover ethanol from the 1.6 million gallons of inactive yeast it generates each year.

Water conservation is a priority for most beverage manufacturers. In the last two years, Sierra Nevada cut water consumption per unit of production by a third. Restaurant operations work against conservation efforts, skewing the ratio of gallons for consumer to finished goods, though Sierra Nevada’s 5.1:1 ratio is in line with industry averages. Water and electricity are consumed when stripping out alcohol in the CO2 recovery system. The bio-fuel processor consumes 45 gallons of fresh water for each 50-gallon batch it produces, though managers hope to switch over to the purified wastewater for this. But resource tradeoffs are inevitable in sustainability efforts. In the end, “do what you think is best” is the guiding principle, according to Grossman.

In craft brewing circles, “Ken’s the technical go-to guy,” says Paul Gatza, director for the Brewers Association, Boulder, Colo. As president and sole owner, Grossman doesn’t require board approval to undertake a project. Nonetheless, hundreds of workers and their families depend on him to operate a sustainable business. “I have a sliding scale for the ROI,” he explains, “and if it’s something that I really believe in, I’ll accept a return that would normally be considered a poor economic investment.” In the end, however, environmentalism must coexist with capitalism.

Grossman is uncertain if the goal of carbon neutrality is even possible for a manufacturer, and he frets that efforts to reduce greenhouse gas emissions might devolve into a marketing ploy. He perceives growing public awareness of the environment and a mindshift change among many manufacturers. And while voluntary participation in greenhouse gas reporting programs like the Climate Registry and numerous awards from waste reduction groups are good for Sierra Nevada’s image, the main motivation is to do the right thing and to encourage the Sierra Nevada community to do likewise.

“People should drink our product because it’s a high-quality beer,” Chastain emphatically says, not because of the brewery’s sustainability efforts. BI

Related Links: Cover Story: Sierra Nevada celebrates 30 years of craft brewing and  More news on sustainability initiatives by beverage companies.