CBB // The past 18 months have certainly been a difficult one for the entire world. Are there any long-term changes that you see, any specific things [that make] you think that the business is going to be different from here on out?
KG // Well, certainly the consumers’ habits have changed pretty significantly. Online shopping—that whole direct-to-consumer part of the business—grew a lot through COVID. I think that’s here to stay. Every indication is that people got comfortable and used to that, and it worked pretty well. And it was convenient. And beer showed up at your door. So I think that’s here to stay to some degree.
CBB // It’s such a new aptitude for breweries who have been forced by law to sell through a three-tier system using this buffer between consumer and brewery. Breweries haven’t typically had that aptitude of figuring out how to facilitate that and to optimize for that.
KG // The wineries in California plowed that ground years ago with wine clubs and a lot of direct-to-consumer. And there are other states that do allow that. But in California, we were pretty unique in that we can—sort of—be the distributor and ship direct-to-consumer as well. We’ve had that model since we started. We have our own distribution company. We’ve been distributing beer, at least in our hometown, for the whole 41 years we’ve been in business. And a vital part of our growth and success is that we’ve been able to really make that connection with the retailers and the wholesalers [and] our own folks and had a pretty tight connection. [It’s] not practical in every marketplace and certainly not legal in every state. But it was part of our early success.
CBB // Let’s talk a little bit about innovation. I have been endlessly fascinated with how you launch a mass-market hazy IPA brand and blow it up into one of the fastest-growing beers in the history of craft beer. So, walk me through this—this process of creating and expanding that family of hazy beers.
KG // Well, the process has certainly evolved as the industry and the marketplace [have]. Going back to my early years, we launched with Pale Ale, Porter, and Stout. We had a pretty simple portfolio of three brands. Our first year, I decided I wanted to do a dry-hopped, IPA-style beer, and we did Celebration Ale our first full year in 1981. Made about 90 cases. And I remember hand-selecting the hops myself—I found a really nice field of baby Cascades that had a wonderful aroma and so chose those hops. Then we did Bigfoot the next year.
CBB // I love thinking about these beers that for me are touchstones—those classics—as once being innovation products.
KG // They were pretty far out in left field at the time. If you look at the beer landscape in 1980/1981, you had light lager, and then you had just a few distinctive beers. The consumer wasn’t ready for 50-, 60-IBU beer, or at least not very many consumers. Something like Bigfoot barleywine, with 10 percent alcohol and huge hops—it was one of those loved or hated styles. We did innovation different back then—they were small, and they were seasonal. We started to get more into it just for the satisfaction as brewers of being able to experiment with different yeast strains and, certainly, different raw materials. The more recent innovation has been quite a bit more focused. I think it’s part of the need to really pay attention to where the consumer is and is going. I’m asked at times—it’s been a number of years ago—but my employees were like, “Can’t we just make Pale Ale? Why are we doing all these crazy things?” But the consumer [wanted] to experiment with drinking beers that were very hoppy, or very salty, or sour, or all these styles. With the internet, and with the sophistication of the consumer, we really had to start playing in different areas than we had historically. So we started to focus on being innovative as brewers, and I think the brewing team really liked it. It was … problem-solving and working on recipes, troubleshooting fermentations—and again, using different strains that we weren’t familiar with. It’s way more fun and challenging to have to solve problems like that than it is to repeat the same thing. As a brewer, you also love dialing in and perfecting it over and … over again. But it’s also fun to solve new challenges.
You mentioned earlier that relationship that we have with our wholesalers and our retailers. We don’t want to taint that by producing products that don’t move through the marketplace. They don’t want things clogging the shelves, and we don’t want things that don’t sell. So [we’re] being more thoughtful about what the consumer is really looking for. … Often, the liquid may be great, but the brand or the branding, or the brand concept may not resonate with the drinker. So we try to figure out what it takes to bring all those things together—to come up with a great recipe and a great liquid, but also to have a brand that means something to somebody, or is memorable in some way, or takes someone someplace that they want to come back to. That’s [the hard part] of developing a new brand. You mentioned Hazy Little Thing. It was one that was way out in left field from a brand architecture look and feel. It doesn’t look anything like our historic brands that we’ve had in the marketplace. And I think there was an excitement to see how a different-looking and feeling brand would resonate with the consumer.
We have to keep looking for how to delight and excite new drinkers as well, so Hazy Little Thing was born out of that “let’s just try a style that we think is interesting and is easy to drink.” IPAs have gone from a range of very intensely hoppy and bitter, and maybe very aromatic, to more of a beer that still has got a lot of hop character and flavor but not necessarily a wallop of bitterness. We realized [we should] try to appeal to a different IPA drinker than one who might like Torpedo or one of our other hoppier, more intensely bittered IPA styles.
CBB // Does it start with a creative brief of sorts? Do you think, “Hey, we want to make this kind of thing?” Or does it start with just “Hey, let’s brew some things and try to create a broader spectrum, and then narrow down.” How does that creative process work? Do you articulate it in language first or think about who the consumer is and what flavors they want? Are there parameters that you define that are musts?
KG // It’s all of the above. Some of the ideas just come from … one of us saying, “Let’s try to do this,” or “Let’s use this hop,” or “Let’s dry hop this way,” or “Let’s make it slightly sour,” or whatever. Some of that’s just sitting around thinking about beer and beer styles and what we might enjoy experimenting with. Other times, it does come from, “We really don’t have this style of beer in our portfolio; we should try to figure out how to make a great one.” So it’s from both sides—from trying to listen to the consumer. We’re more focused there today than we probably were our first 20 or 30 years. We were just sort of doing our thing. And hopefully we hit the nail on the head, and the consumers liked it. But we weren’t necessarily doing any consumer research. I went to a lot of beer festivals, and I sampled a lot of people: 95 percent of people hated our beer, but the 5 percent that loved it, really loved it when we were starting out. People weren’t used to hops the way they are today, so we had to educate the consumer. Tastes [and palates] have changed. The availability of such a wide range of beers in the marketplace today has raised the bar for innovation or raised the bar for exploring flavors of beer that were unheard of 20 or 30 years ago.
CBB // Talk to me about that process of taking a general recipe and then dialing in the technical pieces of that, so that a beer performs the way that you want it to from a physical perspective.
KG // That is something that is really critical for a brewer like us—to make sure we’ve got the flavor stability, the physical stability—and particularly with something like a hazy beer. That’s even harder than with clear beer. To get to a product that is going to look the same, ideally, a month or two or three down the road and taste as close to the same as well. We’ve had a high focus and spent a lot of effort and energy and dollars on instrumentation—on laboratory equipment. On process improvements.
CBB // You do have beautiful labs.
KG // We had a laboratory when we opened in 1980. Many of our peers didn’t, and they didn’t really have much knowledge about either microbiology or chemistry. I studied chemistry in college—I was going to go be a chemist and ended up being a brewer, which does involve knowing a bit of chemistry. So it worked well. And my partner was focused on microbiology. We took it really seriously Day One that we better make great, consistent beer. And as we had cash flow, we kept investing in better technology for packaging, better technology for analyzing for oxygen pickup. And today, we’ve got a state-of-the-art lab with multiple gas chromatographs and instruments that can detect down to parts per billion of iron or copper, or some of the other bad actors for flavor stability. We keep focus on that at a very high level in our thinking, as we’re … growing, buying raw materials, packaging, and [sending] the beer out the door. It is important, and the bigger you get, and the longer the potential is for beer to sit on the shelf, the more you better focus on that. We try to be state-of-the art with the equipment and have it be part of our thinking, as we buy new equipment and grow.
As far as taking a brand like Hazy [Little Thing] or anything, we have a weekly sensory where we taste new products. I did that yesterday—every Thursday, we get together.
CBB // You still do that after all these years?
KG // Yeah, that’s the fun part. We’ve got small breweries, and we just ordered two new 3.5-barrel brewhouses. So each East Coast, West Coast brewery will have identical 3.5-barrel Ss Brewtech brewhouses. Chico has a 10-barrel brewhouse that I designed and had built by Paul Mueller Company about … 20 years ago. In Mills River, we have a 20-barrel Kaspar Schulz. We do a lot of R&D brewing on both of those brewhouses. That comes to the taste panel—the product-development panel—every week. Both beer and non-beer stuff we’re playing with, so whether it’s kombucha or some of the other sort of “beyond beer” products that we’ve got in the wings, we taste and comment and tally the scores, and we typically taste East and West Coast together. So we taste the same beers on both coasts.
CBB // You ship them back and forth?
KG // Yep, both for new-product development and ongoing product. Every week, beers get shipped between [the] breweries to blind taste the same brand produced at each brewery, to try to make sure that we’re aligned with flavor and consistency.
CBB // Fifty-two weeks a year, you’re shipping beer back and forth just to have a giant combined remote taste panel? That’s intense.
KG // We want to make the same beers as closely as we can. We jumped through a lot of hoops. I mean, we were shipping the same malt shipments out—lots going to both breweries from the same maltsters, same hop lots. And then we would get together and see what the differences were. The equipment is similar, but not exactly the same. Both brewhouses are built by Huppmann but [are] slightly different vintages and different designs. So, just trying to get all that stuff dialed in, so that if you get a Pale Ale in the middle of the country, or the East or the West Coast, it’s going to hopefully all taste the same.
CBB // You’ve been doing this an incredibly long time. Why do you keep doing it? It would be easy for you to step out of the business, to not be involved—to hand it off and move on. Or at least enjoy the benefits and the fruits of many, many years of labor. And yet you remain involved in the business.
KG // I’m supposed to be semi-retired. Right now, I’m working just about as much. I really do still enjoy the problem-solving—the mental challenge [and the technology] of beer and brewing. Dealing with people and personalities and insurance and all that kind of stuff, not so much. But I still get a lot of pleasure and joy out of being involved with the brewing team and being involved on the marketing side to some degree. I’m a participant—I’m not directing things at all anymore—but I still like to keep myself close to what’s happening. I was pretty involved in getting the kombucha project going and moving forward. Our team did an amazing job figuring out how to do it safely in a brewery. We worked hard on that project with a real cross-functional team.
CBB // What were the biggest challenges to figuring out how to go from brewing beer to brewing hard kombucha?
KG // I went to KombuchaKon maybe four or five years ago, and I saw a presentation that scared the hell out of me about the amount of Brettanomyces found in most of the kombucha cultures. After that, I was like, “I don’t know; I don’t think we should do this.” We worked really hard on designing our own SCOBY to not have Brett in it and have other yeast and bacteria that had great flavors but didn’t have the same kind of potential problematic issues you might have with Brett loose in the brewery.
CBB // What led you to be interested in kombucha? Certainly, in this current beer market, we have lots and lots of hard seltzer, and it seems to be taking off. Why focus on hard kombucha rather than, say, something like hard seltzer?
KG // Our feeling was if it’s going to be something we get involved with, it’s got to have more of a soul. And you know, our soul.
CBB // Beverages have soul?
KG // Of course they do. They’ve got some authenticity, and they’ve got a reason for being, [whereas] the seltzer direction is really alcohol and some flavor. And we thought that we were brewers, and we’d rather brew something like kombucha, which has got a blend of cultures and managing yeast and bacteria populations—we just thought that was a lot better aligned with who we are as brewers.
CBB // What does success look like to you? What is success for Sierra Nevada Brewing Company?
KG // We’ve certainly had success over the years. Like any business, we’ve had our challenges, and all sorts of modern ones come at you every day with changing consumers and a changing marketplace and consolidation and all the things that we’ve struggled through. For us, success into the future would be a stable, profitable, growing company; a happy, motivated, driven workforce; brands that resonate with consumers for a vibrant growth pattern for many years to come; and having just a great company culture focused on the environment and the things that are important to us as far as maintaining our company in the future for our kids and, potentially, grandkids to be involved with.
This interview has been edited for length and clarity.
For the full conversation with Ken Grossman, listen to Episode 200 of the Craft Beer & Brewing Magazine® podcast.