Lotus Guide Interview with Ken Grossman at Sierra Nevada Brewery on Sustainability

sierra nevadaKen Grossman, the owner of Sierra Nevada Brewery, was one of the state’s first business owners to sign on to the California Climate Action Registry. As a member, Sierra Nevada works with the registry to annually track, report, and certify its greenhouse gas emissions, which are the main drivers of global warming. In 2005, Sierra Nevada installed four 250-kilowatt fuel-cell power units to supply electric power and heat to the brewery’s production processes—it’s one of the largest commercial fuel-cell projects in the United States. Also in 2005, Sierra Nevada installed a carbon dioxide (CO 2) gas–recovery plant to recover, clean, compress, liquefy, and place the gas into its 50-ton CO 2 storage vessel for reuse. Sierra Nevada also installed a $3 million wastewater treatment plant on-site. Additionally, in 2007, the company reduced landfill and liquid discharges by recycling 98 percent of the company’s waste streams: 48 million pounds of spent grains and hops, more than 1 million pounds of yeast, and 1.9 million pounds of glass, cardboard, office paper, and other materials. Ken Grossman also received the governor’s Environmental and Economic Leadership Award for preserving precious resources and for Sierra Nevada Brewery’s efforts in making California’s air, land, and water cleaner and safer.


It’s important to realize that government agencies and regulations can do very little by themselves. History has shown that most positive changes come from individuals at the grassroots level; this is why we want to introduce you to what one company and its owner are doing about our environment by playing a leadership role in being more sustainable.


If your actions inspire others to dream more, learn more, do more and become more, you are a leader.

John Quincy Adams


Lotus Guide: When we listened to you speak here in the Sierra Nevada Big Room at the Kick-Off Conference for Sustainable Business Partnerships, you really caught our attention with the number of systems you have put in place to make your brewery more sustainable, such as fuel cells, heat and CO 2 recovery, recycling (including byproduct recycling), and water conservation. We could see that you were passionate about this—what was it that personally got you interested in this to begin with?

Ken Grossman: I’ve been interested in the world and the outdoors for almost my whole life. I used to spend a lot of time backpacking and hiking, climbing and bike riding and so I was certainly aware of the environment around me. As a manufacturer in industry and as a business owner who uses a lot of resources I thought it was an important part of our mission to figure out and do as good a job as we could to utilize our resources and recycle what we could as far as waste products.

LG: Since most business owners operate primarily on a profit-and-loss basis, how long will it take you to recover your expenditures in becoming more sustainable?

KG: Well, some of the projects have pretty reasonable paybacks. And for us, we’re a private company; we don’t need to focus on the next corporate financials to appease the stockholders, so we take the longer view of the return-on-investment kinds of numbers than so many corporations need to. But the advantages are anywhere from a payback within one year, like recycling or changing lighting. Other projects may be 10 years or more before, in fact we’re looking at an additional solar project that’s closer to a 15-year payback. Not a great return for the investment, but we’ll eventually get there and it’s doing something positive toward controlling our long-term cost.

Our big solar project we have in place has a calculated payback of about six and a half to seven years. And that was based on a more reasonable inflation rate than what we might be facing right now, so those numbers have dropped to five or six years. We put in our CO 2 collection plant a couple of years ago and at this point it doesn’t have a great return on investment but we are capturing carbon dioxide from our fermentation process and we’re getting a purer product to use in our operations because of that. So it’s a double benefit, really, though the payback is probably 10 years for that program.

LG: But at least you do get paid back and this is an important point for most business owners.

KG: Yes. Eventually we’ll get paid back although we have a couple of projects that we’re doing and they have no immediate return but it keeps some waste products out of the landfill.

LG: Right. We used to own a recycling center in San Diego, and that’s when I first got interested in recycling. It’s amazing the money you can save by recycling cans. The energy it takes to make one can is . . .

KG: We’ve tried to find ways to recycle as much as we can, and we’ve got some ways started (?) and it’s hard to find people who want it, but if you can find the right people, you can at least keep it out of the landfill and maybe you’re not getting money for it but you save landfill fees and you haven’t contributed to that.

LG: As a business owner myself I’m curious, as you look around right now, did you ever imagine this when you started?

KG: No. I never imagined it. When I started, almost 30 years ago, I had one employee and we were early in the whole renaissance of the brewing industry. There were about 34 companies left in the brewing business nationwide, and today there are 1,500. We really didn’t envision that that segment was going to grow the way it’s growing. Although we’ve grown to . . . I think we’re the eighth-largest brewery in the U.S. right now; we still produce just a fraction of the beer that’s sold.

LG: What advice or resources do you know of that would help other business owners to realistically start down this path in their own businesses? For instance, are there government grants or organizations that can help offset costs?

KG: There are lots of programs out there, and some of them are state programs and some of them are federal programs. And I think Chico State is working on a way to help businesses find a lot of that information. I’ve been involved with the advisory and environmental literacy program. We’re working with the professors to have students available who can be a resource that can come and do an audit of your business, and help you determine what’s available and what steps to take. Even PG&E has a pretty helpful website and they do offer quite a few programs that help you figure out what’s available for businesses. They also offer seminars, have field reps, and their account representatives, who manage the commercial and industrial customers, are helpful too. You call up and say, “I want to change my lighting; is there a program available?” And they’ll walk you through the steps. But if you go to the PG&E website there are some links to programs that will help offset costs.

LG: Chico State has been an excellent resource for us; we started the Lotus Guide as a college project through the journalism department, and we had a whole class involved in a start-up business.

KG: Yes. They’ve taken a serious leadership role in environmental education and literacy and programs and Paul Zingg has been a real advocate for moving the agenda forward and trying to have Chico and Chico StateChico is cranking up their efforts as well and they’ve signed on to the climate initiative to eliminate greenhouse gases and they’re taking some steps in how to understand what the issues are and how to handle them. be a leader in this area. So my hat’s off to both of them. The city of

Then there’s a federal tax credit which is part of the energy bill that’s 100 percent behind this; there’s also an investment tax credit that gives you a federal tax break on solar and fuel cell and some other technologies. That’s available to offset part of your cost. And then there are state programs that are similar that pay so much for power that you generate by solar. They’ve changed that program over the years but it’s still available and we’ve taken advantage of some of those.

LG: We meet a lot of people from Nevada City to Chico and Mount Shasta and so many say the same thing when we ask them what brought them to this area, and most of them say the same thing: “I just felt drawn to this area.” When did you move here and what originally brought you here?

KG: I moved here in 1972. I had graduated high school in Southern California and didn’t want to live in the big city any more. I had a couple of buddies who went to Chico State, so I traveled up here and got a job at a bicycle shop and worked for a while and then ended up coming to go to college, Butte College and Chico State.

LG: When people found out we were going to interview you, one of the main questions on their minds was, “Where do you get your water and how is it treated?”

KG: We have our own treatment facility on-site here, and we ultraviolet all the water coming in. We carbon filter all the water and depending on where we’re using it we have other filtration and treatments. So depending on where it’s destined in the brewery it’s treated different, but all the water is filtered and it comes from a deep-well system.

LG: Well Ken, thank you for your time and I’m sure this will be an inspiration for a lot of business owners trying to balance their profit and loss with their environmental responsibilities.