Sierra Nevada Brewing Company's Thirty-Year Journey Toward Sustainability
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Sierra Nevada Brewing
Company’s Thirty-Year Journey
Toward Sustainability
Angela Casler, Michael J. Gundlach, Bonnie Persons and Suzanne Zivnuska, California State University, Chico
The authors sincerely thank Ken Grossman (CEO,
founder, and owner of Sierra Nevada Brewing Com-
pany (SNBC), Sierra Grossman (brand manager of
SNBC), Carrie Alden (director of Human Resources
for SNBC), and other members of the SNBC team
for the time they offered during interviews and the
information they shared that enabled the produc-
tion of this article. Without their cooperation and
passion for their business, this article would not
have been possible.
44 PEOPLE & STRATEGY
Ken Grossman is an avid outdoorsman. He is also the founder, CEO, and owner of Sierra Nevada
Brewing Company (SNBC). To understand the culture at SNBC, and the competitive advantage it
brings, you have to start with Ken.
The Dual Nature of of a company” (Elkington, 1997, p.2). Not
surprisingly, its genuine dedication to sustain-
Not surprisingly, this HR approach has led to
the generation of many cutting-edge sustain-
Sustainability able management has earned SNBC many ability initiatives that have benefited the
accolades. In 2005, SNBC received Califor- company. In 2007, SNBC started a program
Ken founded the company in 1980, with the nia’s top environmental honor for sustainable to use spent vegetable oil from its restaurant
intention of running his company in a way practices regarding waste reduction and recy- as an alternative fuel source. It purchased a
that allowed him to respect and pay homage cling. Additionally, every year since 2001, biodiesel processor to provide alternative fuel
to the Sierra Nevada mountain range, where SNBC has received the prestigious WRAP to be used for truck deliveries. Likewise,
he had spent so much time backpacking. (Waste Reduction Awards Program) award SNBC provides feed for dairy and beef cows
Thirty years later, he still is personally from California. through the spent grain, hops and yeast it
involved in all aspects of the company’s collects. In turn, the cow manure is used as
operations and just as passionate about the However, when anyone mentions the awards fertilizer for SNBC’s onsite nine-acre experi-
beauty and wonder of the natural world. SNBC has received and its reputation for mental hop field. These are just a few examples
being a leader in sustainability, Ken is reluc- of employee-generated suggestions that have
Ken’s abiding love of the great outdoors is tant to discuss these issues from a marketing been implemented successfully.
evident in his personal life as well as the perspective. He does not promote the idea of
operations of SNBC. As he explains it, sus- showcasing SNBC’s leading sustainability SNBC’s human resource practices are aligned
tainability describes business practices that practices as a strategic approach for the com- strategically with the company’s emphasis on
have a positive impact on the social and pany. He and his employees embody these sustainability. SNBC has created two sustain-
natural environment, but that also enable a practices because they make good business ability coordinator positions, a full-time
business to maintain and grow. sense, and they feel like the right thing to do manager and a full-time assistant. SNBC was
from the heart. In fact, the SNBC sales force an industry leader in designating the official
From Ken’s perspective, this dual meaning of is specifically instructed to refrain from pro- job title of “sustainability coordinator.”
sustainability is vital to understanding the moting SNBC products as being “green.” SNBC’s sustainability coordinators are
success of SNBC. He believes a company Rather, they sell their beer based on its evi- responsible for organizational effectiveness
should pursue sustainable business practices dent quality and taste. and efficiency by identifying sustainable
because they benefit the social and natural opportunities that will create new revenue
environment, and because they drive the suc- streams and reduce operational expenses.
cess of a company. To him, focusing on people Human Resource
The new employee-orientation process
and the planet as an integrated, strategic cen-
ter improves profitability. Practices emphasizes the values and practices of sus-
tainability that characterize the company.
This philosophy drove Ken throughout the These sales and marketing policies illustrate a The sustainability coordinators train new
start-up of the company and it still does key point in the relationship between SNBC’s employees on the company’s environmental
today. It only has become stronger over time corporate culture and its human resource management policies and procedures. SNBC
and has influenced every aspect of the com- practices. Because sustainability is such a encourages new employees to offer feedback
pany’s operations. Now, SNBC is the six`th natural element of its culture, a sustainable and ideas to enhance the spirit of sustain-
largest brewery in the United States, and it mindset directly feeds into its human resource ability. SNBC views the achievement of
produces a wide variety of award-winning policies and practices, but not in a contrived employee-culture fit as equally, if not more
ales and lagers. Moreover, the many sustain- or obligatory manner. The human resource important, than establishing employee-job
able business practices at SNBC all have been department has made a concerted effort to fit. Its rationale is that if an employee is not
a natural outgrowth of the talented human develop policies and practices that support comfortable with the company’s emphasis on
resources personnel that Ken and his staff employee engagement and foster commitment sustainability, then this person will not fit the
have hired and trained. to the firm’s goals. Employees are actively culture and will compromise employee pro-
encouraged to develop new ideas through a ductivity and engagement.
formal suggestion process and an employee-
Sustainability from the Heart run continuous improvement group. SNBC also focuses on hiring from within the
Clearly, SNBC is a company with a culture Innovation related to sustainability is reward- company. The company recently filled
that values the triple bottom line: “the eco- ed explicitly through recognition programs approximately 80 percent of its production
nomic, social, and environmental performance and the performance management process. positions via internal transfer. This is a ➤
Volume 33/Issue 1 — 2010 45
powerful way to maintain the culture. SNBC strong but lean structure, with about 350 full- managers cook for their employees. Like
plans on sustaining its culture with its succes- time employees, 100 part-time employees and “Lunch with the Chief,” this program is
sion plan that involves the second generation an active roster of about 15 on-call employ- highly anticipated and has the feel of a holi-
of Ken’s family. Sierra Grossman, Ken’s ees. Of these, a small group of eight day—with managers bringing joviality and a
daughter, is currently the brand manager of comprises the senior management team, who heartfelt sense of appreciation for their orga-
SNBC. She worked her way from the bottom are supported by an additional 12 managers. nization and their employees. This event
up, and over time proved that she was excep- They have achieved an average 82 percent demonstrates to employees that they are seen,
tionally qualified for the high-level position retention rate across all functions of the brew- valued and cared for; and management is not
she now holds. Likewise, Ken’s son Brian has ery, and are above average in retention in all only willing, but also enthusiastic, to take
worked in every entry-level position at the three of SNBC’s separate industries (brewing, time to support employees.
company and now serves as the brewery restaurant and events). Ken and Carrie Alden
general manager. (director of Human Resources) credit this suc- These two programs reinforce the high prior-
cess in maintaining a committed workforce to ity the organization places on the development
various employee-focused programs initiated of quality relationships. The senior manage-
SNBC’s People: Human Capital to support the core values of Quality, Heritage ment team sees these programs as an essential
Investment and Tradition. They foster the development of cultural building block. Efforts to connect
Today, SNBC has emerged as one of the coun- high-quality relationships among senior man- employees to the organization as a whole
try’s most successful microbreweries, agers, managers and employees through complement these relationship-focused
outlasting the competition and establishing a creative HR initiatives. efforts, thus enabling workers to participate
brewing tradition that is mimicked by its com- in the core business. The “Brewer for a Day”
petitors. The company has maintained a program allows employees from different
Leadership and Human Resource functional areas to take part in the brewing
Management Practices process as an apprentice. This promotes cross-
functional relationships between employees,
Ken Grossman is an active, visible and
increases appreciation for the work everyone
approachable leadership figure in the brew-
in the organization does, and helps employees
ery. Ken’s perspective on social and
in support areas feel more connected to the
environmental sustainability is that it needs
product and core mission of SNBC.
to be modeled at all levels of the organization
and spreads from one’s immediate contacts
into the greater community. He makes a par-
Employee Empowerment
ticular effort to demonstrate true care for his
employees by investing in his relationships Another example of a program that connects
with them. He trusts them to take that mes- all employees to the organization is the Con-
sage into the larger community of customers, tinuous Improvement Group (CIG,
suppliers and locals. pronounced “keg” as in “beer keg”). This
employee-level committee meets monthly to
For example, every other week he hosts a discuss and problem-solve areas where the
“Lunch with the Chief,” in which a random- brewery can improve, be it related to product
ly selected employee is invited to a one-on-one quality, process costs or even employee reten-
lunch at any restaurant of his or her choice. tion. After developing a solid plan, the
One of his most recent lunches was with Kim, committee reports to a larger group, and
a local college student who is a recent hire in then, after any necessary revisions, may even
the restaurant. She admitted to being a bit have the opportunity to present to senior
nervous about the lunch, and took him out management. Participation in this committee
for sandwiches and salads at a nearby restau- enables employees to take quite a bit of own-
rant where they talked about her schoolwork ership and pride in all aspects of the
and future career plans. Afterward, she com- organization’s functions. Furthermore, the
mented enthusiastically to Carrie about what opportunity to present their ideas to senior
a great time she had and how approachable management and see them implemented is a
and open Ken had been. His next lunch date clear demonstration to employees about how
is scheduled for the nearby Costco food court much senior management values them. The
with Earl, a 20-year employee in brewery process by which used vegetable oil is con-
operations. Based on his long-time relation- verted into an alternate fuel source for
ship with Earl, Ken predicts the conversation transportation is one such example.
will revolve around ideas for process improve-
ments in the brewing cycle, over pizza and a
hot dog.
Training, Benefits and
Sustainability
Similarly, Ken encourages his managers to The human resources team has been instru-
follow his example. The brewery sponsors a mental in creating innovative programs that
quarterly employee-appreciation meal where support the organization’s commitment to
46 PEOPLE & STRATEGY
Quality, Heritage and Tradition, as well as pro-environmental lifestyles. Employees who the two sustainability coordinators are
sustainable business practices. The brewery ride the bus or bike to work are offered $20 responsible for aligning business systems,
heavily invests in employee training and subsidies each month. This helps defray any education and motivation, as well as quanti-
development, a strong benefit plan, and piv- costs of bike maintenance or bus fare and fying sustainable management practices.
otal employee programs that support helps employees save money on gas and car These sustainability coordinators will help
individual efforts at social and environmental upkeep. For those who bike, this program guide the brewery to the next level.
sustainability. encourages more physical activity, thereby
creating a healthier and more sustainable Currently the brewery faces many challenges
SNBC has developed a state-of-the-art train- workforce, while reducing greenhouse gas in its water and energy usage, costs of distrib-
ing center, complete with computer labs and emissions from cars. uting their product nationwide from their
tutorials. The training center’s offerings single brewery, and not just meeting, but stay-
range from internal managerial training to Social responsibility also is encouraged ing ahead of, ever-tightening environmental
skill development for employees in areas through an optional volunteer program that regulations in farming and brewing. SNBC’s
such as Microsoft Office Applications. SNBC provides opportunities for employees to investment in its workforce facilitates
will offer training to teach the implementa-
tion of sustainable brewing practices in the
future. The return on investment of these
efforts is measured at the employee level,
with regular surveys of employee engage-
With a strong focus on human resource management
ment and exit surveys. and all of these programs in place, SNBC clearly
The employee benefit structure at SNBC recognizes that sustainability is a journey rather than
similarly is geared toward promoting quality;
a culture aimed at social and environmental an end state…the company is constantly seeking
sustainability and healthy employees. To that
end, the company offers a comprehensive,
to improve.
innovative wellness program that includes
on-site healthcare for employees and their
dependents and massage therapy. A Healthy
Opportunity Program (HOP) encourages engage within the local community. A com- successful environmental achievements, as it
employees to examine lifestyle behaviors that mittee coordinates this program that provides trains employees to identify and create solu-
can improve their long-term health (e.g., time and opportunity for employees to sup- tions that positively impact the environment
smoking cessation, weight management and port local residents. The volunteer program and social fabric. SNBC focuses on waste,
stress management). builds employee self-esteem and a sense of energy, water and pollution as key environ-
satisfaction by contributing to the commu- mental factors that drive successful sustainable
In addition, the company recently opened an nity’s quality of life. At the end of each year, management practices.
on-site daycare program for employees to those who have participated are recognized
support the need for greater work-family bal- in a special ceremony that highlights their
ance. Other work-family balance initiatives achievements and commitment to socially Environmental
include “beef, juice and beer bucks” with each
paycheck. These “bucks” are redeemable in
responsible action. Management Systems
the brewery to supplement employee grocer- Another way in which SNBC encourages and Profitable Results:
ies. Free T-shirts are offered not only to help healthy lifestyles is by providing employees
promote the brand, but also to create a sense with their own organic-garden plots, which Reduce, Reuse, Recycle
of pride and belonging among employees. For assists them in engaging in sustainable prac-
employees actively involved in the brewing tices. Employees plant organic gardens with SNBC achieves environmental stewardship
process, special footwear is required. These fruits, vegetables and flowers of their choice. due to the dedication and innovation of its
employees participate in a shoe voucher pro- In working these gardens, employees gain an owners and employees. Great ideas are gener-
gram that defrays the costs associated with appreciation for nature and learn about the ated from the front line of the Tap Room and
purchasing expensive required safety gear. science of growing that underlies all of the Restaurant, the Big Room for entertainment
yeast and hop production inherent in SNBC’s venues, bottling, and warehouse and admin-
Senior management is convinced, by both business process. Even better, employees get a istrative offices. Employees follow the mantra
qualitative and quantitative data, that by break on their grocery bills come harvest time. “Reduce, Reuse, Recycle” to decrease expens-
investing in people in a socially responsible es and generate new revenue streams by
way, their triple bottom line is enhanced. With a strong focus on human resource man- reducing waste and energy usage, reusing
agement and all of these programs in place, water and recycling.
SNBC clearly recognizes that sustainability is
Effective Motivation and a journey rather than an end state. Rather
Outreach Techniques than seeing their work in this area as com- Waste
SNBC offers transportation subsidies to plete, or even satisfactory, the company is At SNBC, as at many other companies, sus-
encourage employees to directly engage in constantly seeking to improve. For example, tainability management begins with ➤
Volume 33/Issue 1 — 2010 47
How do all these business practices posi-
tively impact the Triple Bottom Line? SNBC
reduced expenses for landfill tipping fees
by $4.5 million in 2008, and the recycling
program generated approximately $800,000
in new revenue. These new revenue streams
and cost reductions allowed the brewery to
invest further in excellent employee benefits,
hiring sustainability coordinators, new
machinery and equipment, expanded opera-
tions and philanthropy.
Water
On average, SNBC’s wastewater treatment
facility treats 280,000 gallons per day of
brewery water using a two-stage anaerobic/
aerobic digestion process. The treated water
is then used to irrigate the hop field. Because
SNBC is the largest water user in the county,
Ken decided to build a wastewater treatment
developing metrics so the company can quan- the spent feed local and reduces green- facility to help mitigate the company’s impact
tify and report the benefits and outcomes of house gas emissions. on the water supply. Wastewater treatment
environmental management systems. To also reduces the firm’s utility expenses. Reus-
develop the metrics, many organizations 2. Packaging materials, such as cardboard ing 280,000 gallons of water per day
practice Life Cycle Assessment (LCA), which and shrink wrap, are baled and sold to represents significant environmental stew-
is a tool to track material and energy input recycling companies, which has created ardship that does not place stress on local
and output through the entire system (Senge, generous new revenue streams and divert- aquifer reserves or the city municipal water
2008). Instead of managing a linear business ed landfill waste. treatment facility.
process, life cycle assessment creates a
circular process in which nothing is wasted. 3. The recycling program makes it easy for The local community celebrates the brewery
The assessment assists businesses to evaluate employees to separate and recycle bot- as an active partner in preserving the area’s
“what it takes, what it makes, and what it tles, glass, bottle caps, labels, cardboard, natural resources. In addition, SNBC has
wastes” by assessing core products/services, paper, wood and metal. Signage clearly partnered with California Water Services to
their environmental and social impact, and marks each bin, and employees have conduct employee training on water conser-
methods for using resources differently made recycling a daily routine. Helping vation at both home and work. Several
(Hawken, 2005, p. 21). Companies then to make recycling easy and convenient partnerships help support SNBC’s drive for
adopt practices to reduce what they use in the has been a key success factor for SNBC’s sustainable management, which is difficult to
first place, reuse all by-products, and recycle diversion rate. achieve alone.
all residual materials; the “3 R’s”: reduce,
reuse and recycle. 4. The composting program diverts one to
two tons per day. SNBC collects pre-con- Energy
SNBC’s goal was to utilize the 3 R’s to reduce sumer food scraps in two 32-gallon bins Combine waste and water reduction with
waste to landfill both up and downstream at its restaurant. California State Univer- energy conservation and you have a winning
and reduce stress on finite natural resources. sity, Chico’s (CSUC) Associated Students formula. SNBC is 100 percent energy efficient
To implement LCA practices, the company Recycling Organization picks up the scrap on a sunny day, and roughly 88 percent self
began with management decisions that they bins that are later composted at CSUC’s sufficient throughout the year, due to a mix of
could control internally. Longer-term, col- farm in windrows. Landscaping waste is power sources and conservation techniques.
laboration up and down the company supply composted at the Chico Regional Com-
chain would be necessary to engage external post Facility. Food scraps from break 1. A 1.4-megawatt (MW) rooftop solar
partners to formulate greater environmental rooms also are collected and composted in array provides approximately 25 percent
impact. SNBC has achieved a terrific 99.5 an onsite worm bin. The latest initiative is of the energy needs of the facility. SNBC
percent diversion rate due to some of the fol- to invest in an in-vessel compost machine, has installed more than 10,000 photovol-
lowing internal practices: so SNBC can compost all organics onsite. taic panels to date, covering roughly
SNBC’s on-site compost is used as fertil- 185,000-square feet of rooftop space.
1. Spent grains and yeast feed local cattle izer in the hop field, barley field and the
herds within a 150-mile radius. SNBC employee vegetable garden, which reduces 2. In addition, a separate solar-tracking system
helps the local farming community with expenses on purchasing compost and fer- powers approximately 25 percent of energy
healthy feed for livestock and their own tilizer. Finally, SNBC then brews a special needs. A solar-tracking system pivots 180
herd that it raises for the restaurant. It also Chico Estate Harvest Ale from the hop and degrees to follow the sun throughout the
reduces transportation modes by keeping barley fields for the local community. day to maximize energy production. The
48 PEOPLE & STRATEGYtracking system covers roughly three acres ucts. SNBC is currently working with E-Fuel Greening the Supply Chain
of parking spaces at the brewery, and creates Corporation in processing spent yeast by-
SNBC continues to integrate sustainable
an added value of shading customer vehicles products into ethanol biofuel as well. In
practices throughout the supply chain,
throughout the day. 2009, it purchased a hybrid-engine for local
including agriculture. The most important
delivery route trucking. It is a certified mem-
external stakeholders are the hop and barley
3. SNBC installed fuel cells in 2005, to ber of the Environmental Protection Agency’s
farmers. SNBC’s talented people have now
complement the power mix, and generate Smart Way program, which focuses on driver
formed direct relationships upstream with
approximately 50-55 percent of energy training, recycling tires and truck parts, and
growers. They regularly visit them to advo-
needs. Fuel cells use natural gas to extract no-idling policies just to name a few. SNBC
cate for sustainable farming practices, such as
hydrogen, which is then converted to elec- even has two electric car charger stations for
no-till farming to ensure healthy rejuvenated
tricity. Hot exhaust from the fuel cells also employees, vendors and patrons.
soil quality, water conservation and organic
is captured to produce steam that is recy-
farming to reduce pesticide and herbicide
cled directly back into the plant, adding Carbon dioxide (CO2) produced during the
fermentation process is recovered and reused usage. They offer up-front incentives to farm-
15 percent efficiency to the functioning of
again in the plant, allowing SNBC to reduce ers per acre to encourage and motivate action
the fuel cells.
expenses. It is able to offset 60 percent of its for sustainable farming practices, as organic
CO2 needs with recovery. Particulate matter farming oftentimes produces lower yields.
4. Numerous heat exchangers and heat
recovery installations at the plant help to from emissions results in negative health
impacts because it creates smog, which affects In addition, SNBC helped establish the
conserve energy and improve efficiency.
the immune and cardiovascular systems, and “Grower Partnership,” which creates strong
oftentimes causes asthma and emphysema business-to-business relationships that benefit
5. SNBC installed conservation measures
(Emissions and Health Impacts, 2008). both suppliers and manufacturers. The pur-
with convenience in mind. Instead of con-
stantly reminding employees to turn off pose of the partnership is to share sustainable
lights when not in use, SNBC installed Reduced emissions from transportation and practices, receive updates on new technology
motion-sensitive lights in low-use areas biodiesels lower pollution emissions (Stern, and equipment, conduct field trial research on
and uses ambient lighting complemented 2008). Greenhouse gas emissions, such as new barley varieties, and inform members of
by skylights and timer systems through- CO2, also create heat-trapping gases in the world barley opportunities and threats.
out the plant. stratosphere (Staff Report: Initial Statement
of Reasons, 2008). SNBC’s effort to reduce For risk management, SNBC has implement-
Innovative capital financing strategies greenhouse gases positively impacts both the ed what it refers to as a “traceability program.”
enabled SNBC to offset the cost of investing natural environment and society. It now utilizes a “chain of custody”—a paper
in renewable energy. With a mix of federal trail to track production of raw materials to
and state tax credits, and rebates offered from SNBC’s sustainable management practices finished goods that assists in selecting and
the Department of Defense and Pacific Gas & reduce expenses, create new revenue streams comparing suppliers who are engaged in sus-
Electric, the solar arrays payback period was and generate great new ideas. Internal, or t a i n a b l e f a r m i n g p r a c t i c e s . S N B C ’s
only seven to eight years and the fuel cells six controllable, initiatives are systemic, but Ken collaboration with suppliers ensures a strong
to seven years. SNBC focuses on long-term Grossman knew it was a pivotal juncture to supply chain working toward the same goals,
energy independence to run a long-term sus- begin working through the supply chain with though other partnerships are necessary to
tainable business. SNBC creates so much external stakeholders to achieve even greater manage the traceability program.
power it provides excess power to the grid on results. As of 2009, SNBC is now managing
many days. for sustainability throughout the supply SNBC works with several certifying bodies
chain as a long-term strategic initiative. and third-party agencies to inspect product
Pollution
Biodiesel, carbon dioxide recovery and effi-
cient transportation modes are all ways
SNBC reduces pollution impacts to land, air
and sea. In 2008, it switched from truck to
rail to transport malted barley from Canada
and ship finished products nationally. The rail
system is 60 percent more efficient in weight
capacity and only emits 3 percent of truck
emissions. The rail system allows efficiencies
of scale to ship more products, which saves
significant supply-chain-management costs.
Additionally, the vegetable oil from the res-
taurant is processed in a biodiesel converter,
and SNBC produces 50 gallons every other
week to use in its fleets. Reusing the vegetable
oil also reduces expenses by reusing by-prod- ➤
Volume 33/Issue 1 — 2010 49along the supply chain for quality control. share from Budweiser. Other large commer- in sales positions. Should trends continue,
For instance, two outside companies inspect cial breweries were forced to respond in kind. this increased availability should affect a
the documents, or chain of custody, from Preceding this last round of mergers, beer wider range of positions.
growers to the malt company. Then a differ- prices were maintained at artificially low lev-
ent company samples both pre- and post-malt els due to price wars among the major
or barley shipments. Finally, a fourth com- commercial brewers. With a joint venture Concerns for the Economy
pany monitors fuel consumption and product between SABMiller and Molson Coors, the A dramatic economic downturn could be
efficiencies throughout the system. market powers of the second and third largest cause for alarm for any business, and Ken
companies have combined and created tre- Grossman is quick to point out that no busi-
These partnerships allow the supply chain to mendous market-pricing power. To date, ness is completely immune to the current
use a consistent metric system to quantify and InBev has not responded. There is speculation economic downturn. However, craft brewers
communicate results. Using respected third- that this restraint is a result of the recognition generally view their industry as recession-
party inspectors and certification agencies that further price wars would not be advanta- resistant. In fact, some economic indicators
increases quality assurance and healthier end geous due to the debt burden remaining from related to craft brewers are showing promise.
products for consumers. From seed to pint the merger. The first half of 2009 reflected real promise
for the beer industry according to the Brew-
er’s Association. Craft Brewers reported a
5 percent increase in volume and a 9 percent
Partnerships allow the supply chain to develop a increase in dollars over the preceding period
in 2008. Likewise, SNBC continues to expand
consistent metric system to quantify and communicate and is showing no appreciable impact from
the current economy. Nonetheless, the indus-
results. Utilizing respected third party inspectors and try as a whole has not been totally immune,
certification agencies increases quality assurance and and the local community surrounding
SNBC certainly has been heavily impacted.
healthier end products for consumers.
Hiring the Next Generation
of Workers
glass, SNBC plays an integral role in making While the major producers are a market unto The new generation is matriculating into the
a positive environmental impact greater than themselves, the product and market can dic- workforce. “Gen Y” is the generation born
it had ever hoped it could achieve. In turn, the tate what consumers will pay. The current between approximately 1977 and 1994. By
company has more control over the quality, absence of a price war among the major reputation, Gen Y is a group with lofty work-
heritage and tradition customers expect from industry brewers has resulted in a reasonably place expectations. For example, Gen Y’ers
their ales and lagers. secure platform for craft brewers for the time have been reported to expect immediate chal-
being. To date, SNBC has not faced with sig- lenges and/or upward mobility in the
Challenges Ahead nificant downward pricing pressures. workplace (Trunk, 2009). When these expec-
Although SNBC has achieved phenomenal
triple bottom line success during its 30 years,
important challenges lie ahead. As Ken and
his management team look toward the future,
From seed to pint glass, SNBC plays an integral role in
several noteworthy issues emerge. making a positive environmental impact greater than
they had ever hoped to achieve.
Volatility in the Industry
From October 2008 to January 2009, the
large commercial beer producers saw unprec-
edented consolidation that radically altered Also, for the first time in many years, the cost tations are not met, resultant turnover may
their landscape. This recent consolidation of labor has stabilized as the labor pool has be likely. Managing this group will pose chal-
marks the biggest beer industry shift since grown, due to both industry consolidation lenges and many opportunities for HR
Prohibition. In November 2008, Anheuser- and the high unemployment rate. As of Director Carrie Alden.
Busch (U.S.) was acquired for $52 billion by November 2009, California was facing a
InBev (Belgium). A year earlier, U.S. opera- 12.3 percent unemployment rate. Butte Many Gen Y employees approach employ-
tions of SABMiller merged with Molson County, in which SNBC operates, was hit ment positions as personal joint ventures.
Coors Brewing Company (Molson and Coors even harder. The local unemployment rate Although work is a priority, it often trails
merged October 10, 2007). increased from 8.8 percent in October 2008, behind competing commitments to friends,
to 13.3 percent in November 2009. SNBC families, communities and other personal
When South African Breweries bought Miller has been able to take advantage of this larger pursuits. To assimilate the new generation
in 2002, it slashed prices to secure market applicant pool and seen the greatest benefit of employees and to address some of the
50 PEOPLE & STRATEGYpriorities these applicants hold, Carrie and
SNBC are experimenting with a variety of
Beyond the immediate benefit to SNBC, this
approach also helps support family farms and
References
workplace programs, like the ones previously contributes to economic health and recovery. Elkington, J. (1997). Cannibals with forks: The triple bot-
discussed. Carrie is confident the next gen- tom line of the 21st century. Gabrioloa Island, Canada:
eration of innovation resides within these
workers. The key will be providing the job
Conclusion New Society Publishers.
Emissions and health impacts from diesel trucks
incentives and tools to retain and adequately and buses. (2008). Retrieved Nov. 25, 2008, from:
For 30 years, the journey toward sustainabil-
motivate them. http://www.arb.ca.gov/msprog/onrdiesel/documents/FS_
ity has been amazing and rewarding for health.pdf.
SNBC, and the remarkable leadership of the
Supply Chain Management company is well-respected within the craft Hawken, P. (2005). The ecology of commerce: A declara-
beer industry. Selling the beer for its high tion of sustainability. New York, NY: HarperCollin.
The supply chain is frequently an area of vul-
quality has been a key to sustaining long-term Senge, P., Smith, B., Kruschwitz, N., Laur, J., & Schley, S.
nerability for manufacturers. The
brand value and price, as well as internal and (2008). The necessary revolution. New York, NY: Dou-
consolidation of large beer manufacturers
external stakeholder satisfaction. Ken Gross- bleday.
has created a ripple effect on the power of
man’s leadership has built a strong company
distributors. To meet the distribution needs Staff report: Initial statement of reasons. (2008). Retrieved
culture that supports human resource prac- Nov. 25, 2008 from http://www.arb.ca.gov/regact/2008/
of customers, small breweries must compete
tices and environmental management systems truckbus08/truckbus08.htm, Appendix G: Emissions
alongside powerful conglomerates and
that respect the natural environment and the Inventory ~ Methodology and Results, http://www.arb.
respond to distributor demands on price, ca.gov/regact/2008/truckbus08/appg.pdf.
people who live within it. SNBC has achieved
quantity, and logistics. SNBC will have to long-term, sustainable growth that it believes Trunk, P. (2009). Motivating Gen Ys in a downturn.
ensure that its talented people can continue can endure future challenges. BusinessWeek Online. June 10, 2009, 11-12.
to navigate this important arena.
The beer industry also faces challenges sur-
rounding the current high price and scarcity Angela Casler prepares future leaders on how to manage for sustainability on behalf of
of quality hops. In the early 1990s, excess the Department of Management, College of Business, California State University, Chico.
production resulted in a worldwide glut of Casler is also the Sustainable Business Partnership Coordinator and serves as the faculty
hops. The oversupply pushed down prices advisor for the student organization Sustainable Consultation of Office Practices.
and drove hop farmers to plant more profit-
able crops. By 2006, the acres planted with Michael J. Gundlach, Ph.D., teaches, conducts research and consults in the areas of
hops worldwide were less than half the acre- human resource management and general management. He has published numerous
age planted in the early 1990s. During 2008, articles on a variety of topics in these areas, and has presented his work at national and
the combined effect of shrinking hops pro- international conferences.
duction and growing demand fostered a
market where specialty hops were selling for Bonnie Persons, J.D., MBA, is an attorney in Silicon Valley, California. She teaches in
as high as $25 an ounce on the retail market. fields of law and communication. In addition to substantial pro bono pursuits, she is the
While some substitutions are possible, they President of the Western Academy of Legal Studies in Business and a faculty advisor for
can adversely impact the product. the sustainability organization Net Impact.
To mitigate these risks, SNBC has chosen to Dr. Suzanne Zivnuska is a professor at California State University Chico specializing in
secure its supply directly with growers. The Human Resource Management. Her doctorate is in Organizational Behavior and Human
goal is to foster mutually beneficial and long- Resource Management from Florida State University. She has published 20 articles and
standing relationships that will stabilize the book chapters, including Journal of Applied Psychology, Journal of Organizational
availability and cost of good hops, because Behavior, Human Relations and Leadership Quarterly.
without them, SNBC can’t make great beer.
Volume 33/Issue 1 — 2010 51You can also read
