- 1 week ago
Ken Grossman, founder of Sierra Nevada, was brewing beer before craft beer was a thing. Back when your neighbors thought it was weird, not artisanal. Now he's built one of the most beloved beer brands in America, and he sits down with Dan to share what's kept Sierra Nevada alive and thriving while countless others have gone flat.
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00:00Back in the late 70s, there were really only about 40, less than 45 brewing companies in the whole
00:05United States. Today, there's nearly 10,000. Beer industry in general, large brewers and small
00:11brewers, there hasn't been any growth the last few years. But for us, we're brewers at heart,
00:17and so beer will always be something we're focused on.
00:24Hey, everyone. Welcome to How Success Happens. I'm Dan Bova, writer and editor at entrepreneur.com.
00:30And if you're interested in learning how to turn that thing you love doing into a business that
00:38thrives for decades and decades and decades and decades, this episode is going to make you happy
00:46and hoppy. Let's welcome in Ken Grossman, the founder of Sierra Nevada Brewing Company. Welcome,
00:54Ken.
00:55Well, welcome. Thanks for having me on.
00:57Great to talk to you. And I have my first question, which may be the most important of this entire
01:03podcast. What are we drinking? Because I've got the hazy, I've got celebration, and I've got the
01:13mothership. What do you think? Well, you should try all three of them, obviously, but you could start
01:19with the pale, because that was our flagship, and that's what got us started back 45 years ago.
01:25So quick follow-up question, out of the can or fancy glass? Fancy glass.
01:31All right. Now you're really going to put me to the test if I could pour this without getting
01:37an awful head on it. Let's see. Let's see my abilities here. Oh, man. You're doing great.
01:47Oh, starting to get a little foam there. We'll let it settle for a minute.
01:54Oh, that smells so good. Do you still get knocked out by how good this thing you invented smells every
02:01time you crack open a can?
02:02I do. Actually, I just came from a new product tasting a couple minutes ago, so we were tasting
02:08new beers and new non-beers that are in the works as far as our innovation team goes. Every Thursday,
02:16we have a tasting, and we've got a group of really talented brewers who work on all sorts of different
02:22concepts and beer styles and beyond beer styles as well.
02:26I want to go back. You started this in 1980. When you started it, did you still think you'd be
02:33at it
02:3346 years later?
02:35I did not have a clue. Actually, I started homebrewing as a teenager, 1969, and moved up to Chico to
02:45attend
02:46Chico State in the local junior college in 1972. And I was homebrewing back then and playing around.
02:52I started studying chemistry, and so I was analyzing my projects in my chemistry lab. I had a very
02:59understanding professor who let me bring in some of my beverages that I was working on and do some
03:05analysis there before I had much equipment of my own. Back in the late 70s, there were really only
03:11about 40, less than 45, brewing companies in the whole United States, and that included the largest,
03:16Anheuser-Busch and Miller Coors, and all those brewers, as well as the small brewers that had
03:21survived Prohibition and had figured out how to make a living during times where they couldn't sell
03:27beer. And then just a handful of us who started between 1977 and 1981, there were six breweries that
03:37started up new, and that was one of the first times since Prohibition that the breweries had started
03:42from scratch. So what led you to this? What inspired you to say, I'm going to do this for
03:47a living? I guess I was inspired. One, I was homebrewing, so I was enjoying the products I was
03:53brewing. And there was actually a window that seemed to be opening up for things like small crafted
04:03beers. I mean, there were little cheese companies starting up. There were coffee roasters. There were
04:09all these artists in kinds of bread bakeries, and we were in Northern California, and San Francisco was
04:16sort of the hotbed of that kind of creativity. And so we saw sort of an opening in beer, because
04:23at that
04:23point, beer had become very homogenous. All the beers on the market were pretty much one style. They
04:29were light lagers, not a lot of character, not a lot of hops. And so we thought that there was
04:35a
04:35consumer. We didn't know how many people out there, but there was a consumer who was looking for something
04:39different. And so we saw it as an opportunity to sort of create a beer that was unique, distinctive,
04:45memorable, and not just a refreshing cold carbonated beverage. And so just thought there was an opening.
04:55Fritz Maytag had opened the or revamped the Anchor Brewery in San Francisco and was starting to get a lot
05:02of press
05:02that he was sort of carving a different path for the beer industry. And so we thought the time was
05:07right to at least dip our toe in the water. Our original business plan was very, very modest.
05:13Brewing about 2,500 barrels a year was all we had projected. And if we were successful, maybe we would
05:20expand to 3,500. We do that every day now at each brewery pretty much.
05:24Wow. That's incredible. So for all the kind of non-beer nerds, I think IPA, you know, people sort of
05:33think
05:35they know what that means or what that might taste like. But can you kind of talk about what the
05:40difference
05:40is between a pale ale and just an ale and how you landed on that flavor profile?
05:48Yeah. So our first commercial beer was the pale ale you're drinking. And we had played around with some
05:55IPAs. But, you know, at that point in time, the consumers were really not experienced or exposed
06:01to very hoppy beers. And IPAs or India pale ales were brewed as a stronger version of a pale ale
06:08to ship to India, brewed in England to ship to India as provisions. And so they had to give them
06:17some natural preservative power. So higher alcohol and higher hops. And hops are, besides flavoring
06:23the beer, they're also a good antibacteriostatic natural ingredient. So they inhibit the growth of
06:30many wild yeast and bacteria. American brewers sort of took pale ale like we did and then amped it up
06:37into, you know, our American versions of IPAs. And those styles of beers now have gone around the world.
06:44You couldn't get an IPA in England when we first started. There were very, very few brewers were
06:50brewing anything nearly that hoppier or flavorful. Now, American style IPAs are really globally being
06:57produced by small brewers and some large brewers around the world.
07:01So how do you, when you kind of, not that you invented it, but you, you, you popularized it.
07:10Sorry, the, the IPA is already kicking in. How do you go about educating consumers to say,
07:17hey, you think you like beer, but this is going to knock your socks off when they haven't tried it
07:23before. They don't know what they're about to taste.
07:25Yeah. I mean, even back in 1980, when we introduced our pale ale and so it's at 38 bitterness units
07:31and
07:32a bitterness unit, it's just a calculated measurement or analyzed measurement of the
07:36amount of alpha acid, which is the, the component of the hop that gives that, that bitter character.
07:42At that point in time, most domestic beers were in the 10 to 12 bitterness unit range,
07:50maybe up to 16 for some. I mean, today they're, you know, some of the most popular beers are well
07:55below 10 bitterness units. And so educating people to enjoy hops was something you just had to get in
08:02front of them and hopefully produce a beer that had enough malt character and balance that the hops
08:08were sort of married with the sweetness from the malt. And so it wasn't a punch in your face.
08:14And back in 1980, we were cognizant of the fact that we couldn't bring people from drinking
08:21lager beer into drinking an IPA in one step. And so our pale ale was really a version that was
08:28balanced
08:29and drinkable, still very hoppy, but not at the 60, 70, 80 bitterness units that a lot of IPAs are
08:35today.
08:36So in those early days, did that mean like showing up to a bar and saying, hey, you want to
08:41taste this?
08:42Like how did you, how'd you go about that?
08:44Exactly. We did a lot of beer festivals and beer tastings and we would go to bars and, you know,
08:52encourage people to sample and try it. And, you know, early on, we probably had way more detractors
08:58than we had supporters, but we didn't need to win over, you know, 100% of the beer drinking public
09:04back then.
09:04We just needed a few percent and that was enough to get us started.
09:08So a big, you know, big part of success obviously is branding, you know, getting people to try it is
09:16one thing,
09:17but getting people to see it in a beer aisle, you know, and grab their attention and make them want
09:23to grab it is another.
09:24So I wonder if you could talk a little bit about, you know, the name and also just the look
09:29of this can,
09:30like what's going on here. What, what did you purposely design and what message are you trying to put out
09:37with that?
09:38Well, the original label design was actually done by somebody in the beer club in Southern California that was a
09:48graphic artist
09:48and a home brewer and he did the original logo and label design for us.
09:52I think for less than $200, I think we paid for the original artwork.
09:58And we, we just had some ideas.
10:01We wanted to have a little bit of a gold rush feel, a little bit of a mountain, mountain feel.
10:08And so it just tried to blend the mountain scene with a little bit of that old world look.
10:14So how has the independent beer market changed since you began over four decades ago?
10:22It's, it's had to gone through a lot of changes.
10:25What, you know, for, for, for the new people starting out, what, what's the,
10:29what's the landscape that they're walking into that might've been different from the one that you did?
10:34Well, it's certainly gone through a lot of evolution and the last few years have been particularly challenging.
10:40As I mentioned, when I started, there were roughly 45 companies in this country making beer.
10:46Today, there's nearly 10,000 and the, the industry really took off and the nineties and into the two thousands.
10:55And there was a huge amount of growth today.
10:59The, the beer industry in general, large brewers and small brewers, there hasn't been any growth the last few years.
11:05Uh, during COVID, there was some spikes in, in, uh, home consumption and, and some increases in, in, uh, both,
11:13uh, spirits, wine and beer sales.
11:15Um, but since COVID, uh, the last couple of years have been pretty challenging.
11:20So that the industry has been declining a few percent a year for, for most of the brewers.
11:26So, so with alcohol sales, uh, decreasing across the board, uh, you know, what are you doing?
11:33What's your company doing, um, to kind of, uh, fight against those trends?
11:39Well, we have, uh, an active and, and, uh, fairly large sales force.
11:44We have nearly 200 people across the country.
11:47So we're in a little better shape than, than many.
11:50Uh, we're also, you know, making sure we're staying relevant with our consumers.
11:54So we're, we're trying to innovate as, as much as we can, uh, both in the beer space.
11:59And we're looking at things that are sort of out of the beer space.
12:03Uh, we had a kombucha brand that we launched during COVID.
12:06Um, we've had, uh, a few other product lines that we're playing with, but for us, we're, we're, we're brewers
12:12at heart.
12:13And so beer will always be something we're focused on.
12:16And, uh, the hazy little thing, the can that you, you showed earlier, um, that became our flagship a few
12:22years ago.
12:23Um, and so it was a, uh, variant of an IPA, so it's one that's, uh, unfiltered and so retains
12:31some natural, uh, haze.
12:33Um, it's got, uh, a lot of hops, but it's not, uh, it's not very bitter.
12:38So compared to a classical IPA, which had a lot of bitterness, um, the, the softer, uh, hazy styles, uh,
12:46tend to have a lot of flavor, but not as much bitterness.
12:49And that's found a pretty big, uh, consumer, um, um, uh, adoption of, of going with a hoppy beer, but
12:58not necessarily a bitter beer.
13:00Yeah.
13:01Well, I'm going to have to, I'm going to have to finish this so I could taste that just to
13:05make sure what you're saying is factually correct.
13:08Um, so curious to know, you, when you talk about innovation, you were talking about, uh, you know, uh, did
13:15you say it was every Thursday that you're, you're trying new things?
13:18Can you talk a little bit about that process?
13:20Like what, what do you go into it with, uh, how do you innovate without going too far or is
13:27it you go too far and pull it back?
13:29What's the process like?
13:30All the above.
13:31Um, we go too far and pull it back quite often.
13:33Um, you know, the, the process really is, uh, something that comes from, um, sort of all sides of our
13:40business.
13:41So our, our salespeople who were not across the country, they may be seeing trends and what, uh, you know,
13:48is popular in their area because beer is, even though we brew in two locations, uh, we sell beer throughout
13:54the country and different markets have really different sensibilities about what styles are popular.
13:59And part of that is driven by maybe a local brewer who's got a popular style.
14:04And so people are, are enjoying that.
14:06And so you might have to, uh, sort of tailor what you're doing a little bit geographically.
14:11Um, but we, uh, we get input from both our brewing team, from our sales team, from our leadership team,
14:18uh, as to what we want to try, where we think that the trends are potentially going.
14:24Um, you know, it's, it's nice to be a leader rather than a, than a follower a lot of times,
14:30but, uh, you know, sometimes you can be a little bit too, uh, early in your, uh, in your thinking
14:36and really don't find enough of a market to sustain the brands.
14:40Um, so we've, we've tried, uh, a number of things.
14:43We have tap rooms at both, uh, sites in North Carolina and in California.
14:47And so a lot of times we'll put a lot of renovation beers on tap just for our, our local
14:53following and see what kind of, uh, feedback we get from, uh, from our, our visitors.
14:59So you are still, you're an independent beer.
15:02You own your company, correct?
15:04Correct.
15:04Yep.
15:04I have to assume that some big companies have tried to come in and say, Hey, let me give you
15:13a check for a gazillion dollars.
15:15Uh, I have to assume that's happened.
15:18And so my question is, how do you resist something like that, especially when it's got a lot of zeros
15:23in it and, uh, what makes you want to continue doing this?
15:27Well, I didn't start the brewery with the idea of getting rich.
15:31Um, I started with, uh, the, really the, the drive that I love beer.
15:37I love the brewing process, the alchemy, the engineering, the science, um, all that really fascinated me.
15:43Um, I, uh, I, I've had opportunities to sell over the years for sure.
15:48Um, but I've, uh, I've enjoyed, um, building the company and making beer.
15:53And I've got, uh, two of my three kids are involved in the business now.
15:57So, uh, you know, hopefully it could be a multi-generational, uh, business.
16:01My, uh, oldest granddaughters, uh, in college and working part-time at our Chico brewery.
16:05Um, so we've got three generations, um, at the, you know, in the company right now, and that's great to
16:11see.
16:11Um, I didn't push the kids into it.
16:14It's something that they, um, wanted to do after doing other things and, uh, with their lives and they wanted
16:19to come back to the business.
16:21So, um, that part of it's been rewarding and, you know, hopefully we can, you know, leave the company in
16:27good hands as it goes through the next generations.
16:29Yeah, that's great.
16:31Um, so let's get a little into a little process geek out.
16:36Uh, as you just talked about, you love the science of it and all that.
16:40And I wonder if you could give us a crash course in beer making, uh, specifically what is a common
16:48mistake you see a lot of small breweries or even home brewers make?
16:52Like something you want to tell everyone, be careful about this critical thing.
16:58Yeah.
16:58Uh, owning a homebrew shop back in the seventies, I got to sample a lot of, uh, my customers homebrew
17:05beers that were not very good and, uh, probably the biggest pitfall that, that most homebrewers have made in the
17:11past.
17:12So, although today the amount of knowledge with the internet and all the, uh, information that's out there, uh, you
17:18can be a great brewer and brew at home, uh, as long as you pay attention to, uh, cleanliness and
17:25to, uh, temperature and good quality
17:27ingredients.
17:28And, and there are some, um, you know, easy, easy pitfalls that you can fall into if you don't pay
17:34attention, but cleanliness is probably the number one you've beer is much more prone to having fermentation problems.
17:55Uh, you've got to make sure your, uh, you've got to make sure your, your yeast gets enough nutrients and
18:04oxygen to, uh, make a good quick fermentation.
18:07Um, so there, there are a lot of things I could tell a homebrewer to pay attention to, but I'd
18:12say cleanliness is probably the number one.
18:15Great.
18:15And then, you know, you, you, you've got this, this wonderful name, Sierra Nevada, um, you know, it just, it
18:23just, uh, you read that name and it just brings you somewhere, literally brings you somewhere.
18:28And it evokes an idea and a feeling.
18:31What do you, what do you tell people about naming their beers?
18:36Wow.
18:36Uh, you know, with 10,000 breweries and, um, most of those breweries have at least 10 beers.
18:41So there's, uh, you know, hundreds of thousands of beer names out there and it's, it's becoming harder and harder
18:47to come up with good names, both your company and your beers.
18:50So, um, we, we struggle with that today as finding names that aren't used already because there are the cessive
18:56proliferation of, of, of, of beers and breweries out in the country.
18:59Um, but, uh, you know, naming something that again is meaningful to you.
19:04I was a avid backpacker and hiker in the Sierras when I was growing up.
19:08And actually we named our, our first daughter Sierra after the mountains.
19:12And so the brewery came after her.
19:14Oh, wow.
19:14Okay.
19:15Um, just, uh, my wife and I both enjoyed, uh, hiking and climbing.
19:19And, uh, I spent a lot of my summers backpacking in the high Sierras.
19:22So, uh, it had a real, um, fondness for me as far as the connection in the name.
19:28Yeah, that's great.
19:30Um, so every week, uh, subscribers to our How Success Happens newsletter are given a question of the week.
19:38Uh, and I'm curious to get your response to this one.
19:41If you could sit down for a beer with any person living or dead, who would it be and why?
19:50Ernest Shackleton.
19:52Oh, yes.
19:54Um, I, I, uh, I went to the Antarctica last year.
19:58Uh, I was, uh, I was a, uh, big fan of his books.
20:02Um, I got lost in a snowstorm once and somebody gave me one of his books and I read all,
20:08all the, the Shockland Voyage books after that.
20:10And I talk about some of you had grit and drive and determination and, and survival skills.
20:17Um, you know, that, that, uh, that time was, was so different than it is today.
20:21But those, those guys were so tough.
20:23Um, I, I'm, I've been, uh, totally impressed.
20:27That's a great answer.
20:28And for those who are, are not familiar, Ernest Shackleton, uh, is voyaging to, uh, trying to get to the
20:36South Pole.
20:37Things didn't go well.
20:38And, uh, without spoiling it, uh, incredible story of survival.
20:44And as you said, grit, uh, heartily recommend reading up on Sir Ernest.
20:50Uh, that's fantastic.
20:52And, uh, if you want to be a member of the How Success Happens family and get the newsletter, you
20:59can sign up at info.entrepreneur.com slash HSH.
21:04Let's get into the speed round.
21:06What do you say?
21:07Okay, um, let's jump right into it.
21:09Our first question is, what is a habit that you are happy to have and one that you wish you
21:16could ditch?
21:18Uh, waking up in the middle of the night and trying to solve problems.
21:22Um.
21:24That's the one you're happy to have or that you wish you could ditch?
21:27Oh, it's, uh, both.
21:29Exactly.
21:29That, that works for both.
21:30So, uh, I've solved a lot of problems at, uh, two in the morning.
21:34Um, uh, a buddy of mine who owns another brewery, we, we commiserate about, uh, this problem that we both
21:42have of, of, uh, waking up and realizing, you know, at midnight, you should have done something different.
21:47Or the, as he calls it, the mind circus starts going and, and you just keep going around, around, around
21:53and, and, uh, try to solve all the problems.
21:55So, um.
21:57Well, I, I like that approach because normally it's all about trying to quiet our mind and go back to
22:02sleep.
22:02But you're like, well, I'm up, I might as well solve this problem.
22:05Yeah.
22:06I like that.
22:07There's plenty of times I'd rather be sleeping, but, uh.
22:09Yeah, yeah, right.
22:11Um, what is something that most people love but you secretly can't stand?
22:19I guess, uh, here, here's an odd one, but, uh, a very fragrant, um, uh, detergents, dishwashing, soaps, um, uh,
22:29dryer sheets.
22:30Um, they drive me nuts.
22:32Um, I'm a bicycle rider and somebody will drive by some days and the, the odor coming out of their
22:38car is so strong of, of, uh, dryer sheets or whatever it was they were closed.
22:44Yeah.
22:45As a brewer, you know, you, you want to protect your, your sensory, um, ability and being in rooms with
22:53a lot of perfume people doesn't help.
22:55Uh, so we don't, uh, there's no, uh, Sierra Nevada, uh, laundry detergent, uh, flavors coming up in the.
23:02Uh, we did have hop flavored, uh, chapstick.
23:05Um.
23:06Oh, really?
23:06Yeah.
23:08That's fantastic.
23:10Uh, well, along the lines of that, uh, the, the sleep problem, what is your favorite way to, to turn
23:17off your business brain?
23:20Um, you know, at this point in time, yeah, I read quite a bit.
23:24Um, so reading, um, not, not business reading necessarily.
23:28Um, I do enjoy watching some, um, dumb TV shows that, uh, are mindless cooking shows.
23:36Um, I wouldn't say they're dumb, but they're, they're sort of mindless.
23:39You don't really have to think too hard.
23:40Um, I'm a foodie.
23:42I like to cook.
23:43And so, um, watching cooking shows is relaxing.
23:46That's great.
23:47And then, uh, finally, uh, rate your beer pong skills, uh, from zero to Marty Supreme.
23:55Where, where are you on that scale?
23:56Uh, not very good.
23:58Uh, yeah, I'm not zero, but I, I, I probably would not win a beer pong event.
24:04But, but, but when the, the great thing about beer pong is in you're losing, you're winning because you get
24:09to drink.
24:09So, so that's fantastic.
24:11Well, Ken, thank you so much for, for taking the time and for your, uh, amazing product.
24:17Every time I have Sierra Nevada, it, it takes me back.
24:20We used to have a neighborhood dad's, uh, basketball game that happened every Sunday.
24:26And the Sierra Nevada was always flowing.
24:28So, uh, great times.
24:30Uh, so thanks for those memories.
24:32And what's the best way for people to, you know, keep up with what Sierra Nevada is coming up with
24:38next?
24:39What the new releases are?
24:40Um, you can sign up, uh, for information, uh, um, from our website as well.
24:46And, uh, you can get, uh, updates on new brands and new products coming out.
24:52Excellent.
24:53All right, man.
24:53Well, great talking to you.
24:55Uh, I'm going to finish this and then get to the hazy.
24:58So, uh, cheers.
24:59Well, don't forget the celebration.
25:01So that, that one is something I've been brewing now since 1981.
25:05Um, and, uh, it's our holiday beer.
25:08So it's, it's a little past, uh, New Year's, but it's still going to be great to drink.
25:13Well, isn't, isn't every day a holiday, Ken?
25:16Yeah.
25:18All right, great.
25:19Well, thank you so much.
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