Pull Up A Stool With Brian Grossman

Sierra Nevada Brewing Co.

January 18, 2014 By Julie Johnson

Brian Grossman, whose father, Ken, founded Sierra Nevada Brewing Co. in Chico, CA, in 1979, has been overseeing construction of the company’s new facility in Mills River, NC. The new brewery has already brewed its first batches of beer and will open officially later this year.

AAB: Ultimately, how big will the new facility be?

BG: The initial phase, which we’ve got the fermentation structure in place for, is 28 vessels. The structure is actually a 44-vessel structure, and that’s a mix between fermentation, maturation and brite beer tanks.

With the 28 tanks in place, we should be able to do roughly 350,000 barrels a year. Chico is running at about a million-barrel clip, which is a little bit of a stretch for that brewery. Chico likes to run between 750 and 850,000 barrels, so we’ll actually pull the 350,000 barrels right out of Chico. Obviously, there will be a ramp-up to make sure everything is working, but it will be a relatively quick scale-up here in North Carolina. Then we’ll get Chico back where it likes to be very quickly.

Our sales are roughly 50 percent east of the Mississippi and 50 percent west of the Mississippi. Our current trends show that the area east of the Mississippi has more of the growth, so that’s where the barrels will come from to scale this brewery to its ultimate capacity right around the 750 to 800,000 barrel mark.

What do you think accounts for the continued impressive growth of craft beer?

The catch-all term would be the Slow Food movement, which is more the mindset of where your food is coming from—and, obviously beer is a food. It’s nice to have the ability to go down to your local brewery and see Joe Smith the brewer making the beer and come in the next day and there that individual is, drinking in the pub. There’s a connection that people love about craft beer. I think that’s where craft beer gets a lot of its push—the authenticity behind it.

As companies like yours, and the other prominent craft brewers grow larger, how do you hang on to that attractive aspect of craft beer?

That’s definitely difficult and something we have to deal with. When you’re successful in business, people buy your beers, which then in turn makes you larger and larger, and you get to the point where a lot of people say, ‘Well, now they’re too big.’ The reason we believe we can remain relevant is that we haven’t changed our approach to our beers.

Staying relevant is hard. We don’t do the large ad campaigns like some of our peers do, like some of the domestic brewers do. That’s not us: I don’t think our consumers would be happy if we started doing that, either, because that’s not staying true and authentic to who we are as a company. We are a family-owned, family-run company, and that’s one of our biggest things—community, family, grass roots. That’s how we got to where we are today. It would be awkward for us to change.

Sierra Nevada and a number of other craft brewing companies have made the decision to open new facilities. What was behind the decision for you?

It was, “Sell-sell-sell; we need everything you’ve got.” We saw the writing on the wall. We had a lot of years of positive growth. We started adding the numbers up and saw that in four or five years we’d run out of capacity.

We started asking, What happens if we expanded Chico? Or if we did something on the East Coast? We realized we had to change something.

So, OK, we’re going to have to add capacity. That’s where it became a family decision. We all sat down together, because we knew it was going to change the dynamic. We have a very tight family group: Even as adults, we would always make the time for family dinners. We understood that a second facility would greatly complicate the business and personal side. I would be relocating thousands of miles away. We talked about it, and the whole family said, yes, this is a good idea.

We sourced a site selection consulting group. What did we love about Chico? If we could do it over again, what would we improve upon? We came back with roughly 200 cities that would fit our criteria, and we started going down from there: distribution routes, access to cattle for spent grain, crime rate—all the other things you don’t think about as much, but are certainly important.

We got it down to roughly 20 sites, did a preliminary look and then engaged three or four finalist sites as a family. We settled on Knoxville, TN, and we were about 90-95 percent of the way pulling the trigger on Knoxville, then Asheville came up.

One of the site selection criteria, actually, was that we didn’t want to be within 50 miles of another small craft brewer. We didn’t want to be the 800-pound gorilla coming in: If we’d had a larger craft brewer coming into our back yard, we would have wanted a conversation. It definitely would have been a little awkward, and we wanted to respect that.

The local brewers heard that was part of our reasoning, and they invited us for a conversation. Myself and my father sat down with the local brewers’ guild and had a very open, honest Q and A. Some of the answers they didn’t like, but we were honest, and they’ve given us a lot of support to come here and engage in this area. From a state, county and city level, it’s been a great relationship.

I’m a huge fan of Oscar Wong [founder of Highland Brewing Co.]; he’s been the lynchpin to the development of good beer in the Asheville area.

We have a great friendship with his daughter Leah [Wong] and [her husband] Brock [Ashburn]. Leah and I talk a lot about family business dynamics. Family businesses are a unique thing, and to have another family beer business is fantastic. We got together about a month ago at my house and had a margarita party along with folks from Appalachian, another local brewery. A bunch of brewers got together and drank margaritas!

The image of craft beer that consumers love is that it is a collegial business, without the cutthroat tactics of some of the big guys.

Well, we’re definitely competitors of some sort, but that doesn’t mean it has to be dirty. That’s not what craft beer is. At the end of the day, we all love our passion, which is making beer. You’re an idiot if you think you can walk into the craft beer industry as an easy money-maker. I don’t even want to know the number of hours I’ve put in. It’s crazy, but it’s very rewarding, and worth it. Thank God my dad didn’t make cat food.

Will you brew the full Sierra Nevada portfolio at Mills River?

Roughly 80 percent of our sales are made up of Pale Ale, Torpedo and our seasonal: that’s our core, one-two-three in that order. Then there’s roughly 20 percent of supporting brands: Porter, Stout and Kellerweiss, and specialties. We’ll definitely be brewing the one-two-three at both locations. The supporting brands, we don’t quite know which brewery will brew which beers. We’re very passionate about getting the very freshest beer we can to the consumer. But it’s not just freshness in proximity; it’s also freshness in rotation. For the smaller brands, it doesn’t make a lot of sense to brew 100 or 200 barrels and sit on them.

When we get going here in North Carolina, we’ll have two 200-barrel open fermentation vessels, and that’s a little different from the four 100-barrel open fermentation vessels we have in Chico. The Mills River vessels have top-cropping ability and an integrated CIP [clean in place] ring in them. So it will keep those beers easier to manage than in Chico, where we have to physically hop in the open fermentation vessels to clean them. That was actually my first job, scrubbing the open fermenters.

So we’ll probably do more of the open fermentation-style beers out here, but we haven’t decided which ones yet.

In the early days of the magazine, Sierra Nevada was a very conservative company. There was a small handful of beers that were brewed. The only thing the company advertised was the brewery gift shop. Then there was a change in philosophy. What we noticed was full-page ads—which were of course very welcome! But more importantly, the company started brewing lots of new beers. How do you balance innovation with your traditional line-up?

Innovation is a unique term. Look at the brand Torpedo, which is the number one selling IPA in the nation. The [hop torpedo] itself is the epitome of innovation, but it’s a very traditional style of beer. But that was also our sustainability philosophy. We were doing brands like Celebration and other traditionally dry-hopped brands, and finding that the center of these hop bags were not getting utilized—there was dry content inside of them, which didn’t fit our concept of sustainability. So we thought there had to be a better way of getting 100 percent utilization of your raw material. That’s what led to the hop torpedo.

Then there are innovative beer styles—brands like Brux that we do with Russian River. I love Brett-finished beers. My father thought I was crazy when I said we’re going to do a Brett-finished beer here at the brewery. No way in hell! But we came up with a whole campaign with Brux, and no Brettanomyces contamination. We call it “domesticated wild ale”—but if you think you’ve got that thing domesticated, it’ll turn around and bite you!

Those innovative styles are huge. When you see those changes you were talking about, you didn’t reference the biggest thing, which is the consumer. Now you’ve got these on-line forums, and you’ve got—I use this term in the most positive way—these beer geeks out there that have access to a huge audience, and they can have a very large influence on people. We have to stay relevant with them, as well. How do you do that? People have been drinking our beers for so long and, in their minds, they’ve already talked about them. Will they go back and taste the older beers, or will they just pay attention to the new stuff?

So it’s a balance between the reliability of Sierra Nevada Pale Ale, and new things that get the talking classes talking.

A lot of people will say, oh, Sierra Nevada Pale Ale, that’s the old standby. We need to make the point that, yes, the beer is always good, but it is also one of the revolutionary beers that started the whole idea of craft. But some beers have three or four times the IBU content—I call it the Cascade Effect. Hoptimum for us is 100 IBUs and 10.4 percent alcohol. Who’da thunk? People are down on these things, loving them. The consumer shifts, the beer styles shift.

Do you have new projects on the beer side?

We just announced Beer Camp Across America, coinciding with the opening of this facility. This is one of those things that sounded like a really good idea before we had to do it. …

We selected 12 brewers to collaborate with, which was one of the hardest things to do. We wanted to brew across the nation, and brew with a bunch of buddies, which is always the best thing to do. The problem is there are 2,500 brewers out there.

We came up with 11 breweries, and the 12th is the Asheville Brewers’ Alliance. We’ll brew 12 different beers and have a 12-beer variety pack, one bottle from each of these collaborations. … We’re doing, I think, eight parties across the country, going from the West Coast to the East Coast, and ending up here with our opening. That’s 2014.