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LIGHTNING REVIEW: Grossman shares story of brewery’s growth, success

Ken Grossman Ken Grossman

'Better beer movement'
Sierra Nevada was among the leaders in a revolution of craft breweries who pushed "the better beer movement" to give consumers an option besides light lagers. In 1982, its Pale Ale won a Southern California newspaper's taste test of top American and Europeans ales. Four years later, the San Francisco Examiner ran a five-page Sunday magazine feature on the brewery, "The Beer That's Making Chico Famous," causing a sellout of the product in the Bay Area. The success forced the company's move from its original space to a large space. Grossman installed a 1960 vintage German brewhouse with its shiny copper kettles, making the new brewery more of a showcase (as the Mills River brewhouse is).
By 1989, the company saw sales increase by 80 percent, from 12,000 to 20,000 barrels. Grossman and Co. expanded the plant again and again. Designed to make a maximum of 60,000 barrels a year, the brewery would ultimately produce close to 1 million barrels, straining it to a point that led to the Mills River brewery.
Grossman explains how some craft brewers use large breweries under contract to make their product, losing touch with the quality and violating a sort of unofficial craft brewery code. Most beer is pasteurized "to destroy bacteria that may cause off or unpleasant flavors," he says. He admits that he's with the purists who view pasteurization "as a crutch for technically deficient or lazy brewers and unnecessary if you pay attention to your yeast and the cleanliness of your plant."
A brewer from a large company once asked him how he slept at night, not using a pasteurizer. "In truth, I haven't slept that well for the past 30 years, although not owning a pasteurizer is pretty far down the list of things that keeps me awake at night," he answers.
Instead of paying himself a bigger salary or stashing cash in the bank, Grossman always found a use for money to improve the product. It might puzzle some people. " ... After all," they ask, "isn't that why you're in business, to make money? What drove me and many others into the business was the desire to make great beer."
This passage, Grossman's attempt to explain what really drives him, reminded me of something I heard when I was reporting the Big Forest story. "Remember, with Ken," a Sierra Nevada executive told someone in the Henderson County delegation visiting Chico, "it's not always about the money."

Becoming the sole owner
Money was at the root of "The Time of Troubles," Grossman's account of buying of his original partner in a painfully drawn-out process that involved both families, numerous consultants, appraisers, financial advisers, bankers and lawyers. Eschewing other options— larger beer companies taking over, heavily leveraged loan packages and so on — Grossman bought it all himself.
By now the reader is rooting for the family owned company to stay family owned and true to its roots. In his chapter "Fork in the Road," Grossman tells of his plan, kept secret from everyone but Katie, to sell the company and retire to a home on the Pacific Ocean.
"The more I thought about it, the tougher it was for me to move forward with the plan," he says. "How could I just walk away? When I told my kids what I was thinking, they were aghast ... They were shocked that I would consider selling the brewery; it had always been a part of their lives." (Pay attention to the revelation because we're the beneficiary of that here.)
In the last chapter, "The Future," Grossman explains that growth in sales spurred the decision to build the new brewery in North Carolina. Based on the growth rate in 2011, "I felt I had to pull the trigger on the new brewery or we would most likely experience shortages," he says. Sales slowed just as the team was making the decision to buy the land at Ferncliff Industrial Park. Then sales spiked by 23 percent in January 2012 (the month the company announced the Mills River plant), 18 percent in February, 10.5 percent in March, 12.7 percent in April and 21.4 percent in May.
The Mills River brewery "couldn't be done soon enough."
It's significant that Grossman sent his son, Brian, to run the new brewery, which is now making beer and ramping up production to take pressure off the overtaxed Chico plant. Brian "made the huge commitment to help lead the next phase of Sierra Nevada's growth" by moving to Mills River. First-born Sierra, a toddler when the Chico plant cooked its first brew, "has lived through much of this story first-hand," the father says. She is now in charge of the "customer experience," something we'll hear plenty about here. (Anyone thinking about working at the plant ought to be pick up a copy of the book and read Chapter 12, "Germinating a Work Force," on the company culture and benefits.)
The future is bright.
In big craft markets, such as the Bay Area, Portland and Seattle, craft beer accounts for 25 percent of beer sales and is growing. (Grossman does not report the percentage for Asheville, which has won the "Beer City USA" title.) The book's last section is titled "No End in Sight to Sales Increases."
In Beyond the Pale, Grossman has marshaled ample evidence as to why that is true, and why Sierra Nevada Brewing Co. has earned customer loyalty and growth. For Mills River and Henderson County, that makes for a very good forecast.

 

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