Q. How long have you been in the brewing business?
I’ve been in the brewing business for as long as I can remember. My earliest memories include taking rides down the conveyor on the packaging line in Chico. Throughout my teens and early twenties I worked at the brewery off and on in various capacities, and eventually was fortunate enough to become the Co-Manager of our new North Carolina brewery. My father founded Sierra Nevada in 1980, and was home brewing for some years before that.
Q. What was it like in the early days when you were just starting the business?
When my father started Sierra Nevada in the 80s, he owned a home brew shop. He also worked for a bike shop (cycling is another one of my father’s passions, and one of the reasons he discovered and fell in love with Chico). During this time, he was taking classes to learn how to build, modify, and repair refrigeration and brewing equipment since he could not afford to pay someone. He has always been a very hands-on person. His days often merged into one another with little or no sleep. Money was very tight, and on several occasions, he and his partners had to go back to their families to ask for additional loans. He drove around California scrounging for parts, and found much of the original brewery on old closed down dairies or soda bottling plants, which he would load up on his flatbed pick-up truck and haul back to Chico. In the formative years, my father and his partners never imagined that the brewery would become what it is today. They were in it because they loved to brew, and more importantly, drink great beer. As they found out, they were not alone.
Q. How did your company choose the name of the business?
In addition to cycling, my father has always loved mountaineering. The Sierra Nevada mountain range is one of his favorite places. The mountain range has been such an important part of his life that he named his first daughter, my oldest sister, Sierra.
Q. What is your corporate structure?
We have always been, and hopefully always will be a family-owned and family-run company. Decisions always come down to what is best for our family, our employees, and our beer. From an organizational chart perspective, my father is the President of the company. We have a team of incredibly bright and motivated directors that serve as our Action Team. Then we have our Management Team, and often, Department Supervisors who oversee the day-to-day operations of their respective departments.
Q. How many people does your company employ?
Between our two breweries and our sales force, we have over 700 employees.
Q. What were some of the challenges you face in the brewing industry?
The brewing industry is always changing. Right now, we’re experiencing an influx of new brewers to the craft scene. When my father started Sierra Nevada, there were roughly 40 American breweries, partially as a lingering after-effect of Prohibition. Today, there are about 3,200 registered craft brewers in America, and that number is ever growing with approximately 1.5 permits applied for per day. Many of these brewers have a lot of talent, and are making some great beers. In an effort to stay relevant, we need to constantly be looking to innovation in our brewing methods and recipes.
Brewing also requires a lot of raw materials (water, malted barley, hops, and other special ingredients). Water quality is extremely important, especially when you have two breweries across the country from one another like we do. If our water chemistry is not aligned, then our beer between both locations won’t be aligned. This was one of our main initiatives during the commissioning phase of our North Carolina brewery – flavor profile alignment. Barley and Hops vary from crop to crop, as they are living, breathing organisms, and accounting for these minor changes often takes a lot of time and resources.
Q. How does your company recruit/hire employees?
At Sierra Nevada, we look for the right employees. This does not necessarily always mean the best employees. We want employees who want to be here. We want people who are passionate about craft (insert interest here), the outdoors, and their community. If people have the right attitude, they can, and will succeed with the company. It all starts with the right attitude.
Q. How did you finance the business in the early years? Are you profitable? How long did it take to reach profitability?
My father and his partner had a little bit of money saved up, but got most of their start-up funds from family loans. Present-date, we are in the black, and that is greatly attributable to our sustainable philosophy of minimizing inputs and maximizing outputs.
Q. When problems arise how do you resolve them?
Resolution depends on the nature of the problem. Equipment and brewing-related problems arise more often than we’d like, but we trust in our directors, management team, and employees to brainstorm and come up with solutions and workarounds. They generally do an excellent job. This is a testament to our philosophy of hiring the right people with the right attitude. A can-do attitude will trump the feeling of discouragement almost every time.
Q. How do you train new employees?
We engage in a lot of on-the-job-training. We have monthly sessions on various management topics. We send employees out to workshops. We have 90-day introductory reviews, Coaching Sessions, one-on-one meetings, and annual reviews to gauge how our teams are doing, and where we have room for improvement. We also love employees who are motivated and proactive and read, watch documentaries, visit other breweries, distilleries, and production plants and come up with new and fresh ideas on their own.
People often ask what it’s like to work for Sierra Nevada, and I share an analogy I’ve come up with: Working for Sierra Nevada is like biting on to a high-speed carousel and trying to hold on for dear life.
It is challenging and fast-paced, but extremely rewarding.
Q. How do you motivate and reward people? Is there profit sharing or employee ownership?
We do have a profit sharing plan built into our 401k plan, but money only motivates people to a certain point. Being a part of the craft beer industry is a special thing, and our team recognizes that. If you go to a beer festival or craft beer conference, you can see it for yourself. Strangers in the morning are good friends by the end of the day. It is truly a great community to be a part of. I’ve met some of my closest friends through craft beer. Vinny Cilurzo from Russian River Brewing Co. presided over my wedding. That’s pretty special. On top of the privilege of working in this industry, Sierra Nevada is in the very fortunate position to be able to offer a great benefits package to our employees, including medical insurance, massages, annual health screenings, Fresh Fruit Fridays, and yes, beer. Most importantly, though, we look for people who are self-motivated.
Q. How do you reprimand employees?
We do not engage in progressive discipline. We are believers in the Hot Stove Theory.
Q. What is the current status of your company? Are you growing, down-sizing, or staying the same?
We are currently in a growing phase.
Q. How much product do you ship in a year?
We ship approximately 1 million barrels of beer annually.
Q. How do you market your products?
We engage in grass roots marketing strategies. We also have a great events team that participates in festivals and celebrations across the country. Social media has become a useful tool in recent years too, and our target audience is folks between the ages of 25-45, with a higher education and a bit higher disposable income.
Q. Who is your biggest competitor?
Our largest competitors are still the large foreign-owned macro-breweries. Craft beer still represents only 10% of the beer consumed in America. The craft beer segment has a lot of room to grow, and it is. In fact, craft beer is the only segment in the beer industry that is growing. Because of this, the macro-breweries are putting out “craft-y beers” to try to maintain market share.
Q. How do you keep up with current best practices in the brewing industry?
I do my best to keep abreast of current best practices, trends, and shifts in the market by reading and talking with my peers in the industry. It goes back to that sense of community. I can pick up the phone and call a buddy at another brewery and have a candid conversation about new developments, new hop varieties, and brewing processes. My father is on the BA Board, and I am part of the BA Safety Subcommittee. We also have a brewery ambassador at both our North Carolina and Chico facility whose job is to stay ahead of the curve on new trends and news.
Q. What are some of the quality control problems associated with brewing?
As previously mentioned, barley and hop deviations from one crop to the next is always something we pay attention to. This can drastically impact our product quality and profile. Thorough cleaning and sanitization of everything our beer touches is perhaps the most crucial step in brewing. Infection in beer can produce a variety of off-flavors, some subtle, and others intense. Aside from that, there are many things that can affect the quality of the product. Yeast health is among the most important. Happy yeast makes happy brewers. Without healthy yeast, we cannot have healthy fermentation or high quality beer. On the other side, we have quality control initiatives on our dry goods products such as cardboard for cases. Keeping our relative humidity down below a certain threshold in the warehouse is necessary to maintain the integrity of our packaging materials. We track complaints from consumers in our Key Performance Indicators (KPI) program on beer quality, broken glass, and packaging quality, to name a few. We are running constant quality analyses in our lab to determine how the temperature and movement in trucks will affect the beer during shipping. To add, we need to stick to a strict production timeline of brewing, fermenting, packaging, and shipping to ensure that our beer hits the shelves at its peak freshness.
Q. How do you develop the recipes for your beer?
Some of our staple brands are brewed with the same recipe that my father created more than 25 years ago. We love those beers, and consistency is key. However, we are always experimenting with new brews. We have our R&D pilot brewery in Chico, and one coming soon in North Carolina. Our brewers are free to experiment on this system, and every so often, they come up with a recipe that we love. We do a lot of research on hops and the development of new varieties and often brew test batches with these experimental varieties. We also have a program called Beer Camp where we invite folks to come to the brewery for some brewing education. At the end of the program, they are asked to come up with a unique recipe, as a team, and with the help our brewers, they brew the beer. Several of these brews have knocked it out the park and have been released.
Q. How do you name your products?
We typically have roundtable discussions to bounce product names back and forth. Sometimes, we will name a beer after the brewing processes used to create that beer. For example, Torpedo Extra IPA is named after the hopping mechanism we created, The Torpedo. We also have seasonal beers whose names reflect that time of year (e.g., Summerfest Lager, Celebration Ale, etc.)
Q. What are some of the fixed and variable costs associated with a brewery?
Some costs that are relatively fixed for us as payroll, insurance costs, and our energy model. For example, regardless of whether or not we are brewing, our glycol system is still running.
Some variable costs would be malt and hops, which change from year to year depending on crop yields, and other market factors. Glass is one of our largest costs, and is variable.
Q. What do you do to keep costs low?
We ask our employees to view company money as their own. We like our teams to know the costs associated with running the brewery, and really focus on minimizing any and all waste. We also try to hedge ourselves against market volatility by entering long-term agreements for the purchase of malt and hops.
Q. How do you maintain the atmosphere or environment of your business?
We have some long standing traditions that are engrained our company DNA. We have specialty high-altitude brews like Hoptimum, Narwhal, and our Harvest Series, all of which create excitement around the brewery when it’s that time of year. We hold annual employee parties like Single, Fresh, Wet & Wild, which is always a great time for employees and their families. We maintain our sustainable living initiatives which include reducing water consumption (both at the brewery, and in employees’ every-day lives), biking rather than driving, and recycling and composting. This all plays into the
Sierra Nevada family values, and we find that the positive, active environment sort of perpetuates itself.
Q. What advice you give to someone starting up a brewing business?
The main focus should be on product quality. The main focus should not be on making quick money. Quality always needs to come first.
