Sierra Nevada Turns 30
By Sam Calagione
Editor’s Note: Portions of this interview appeared in the March/April 2010 issue of The New Brewer magazine.
In 1980, the U.S. boycotted the summer Olympics in Moscow, Ronald Reagan became president, John Lennon was assassinated, and Richard Pryor was badly burned trying to freebase cocaine.
It seems like a lifetime ago—especially in the context of the American beer landscape during that era.
In 1980, there were 48 brewing companies in this country. The high point for breweries in the U.S. is believed to be 4,131 back in 1873. The term craft brewery had not yet entered our lexicon but there was a burgeoning scene of beer enthusiasts, homebrewers and MacGyver-esque entrepreneurs itching to restore the vibrancy and diversity in the American brewing scene.
One of those entrepreneurs was Ken Grossman, who came to commercial brewing via his experience selling supplies and ingredients in a homebrew store. Grossman had learned about homebrewing from a friend whose father was a homebrewer in the mid-1960s. His early inspirations were pioneers like Charlie Papazian, Fred Eckhardt, Fritz Maytag at Anchor Brewing Co. and Jack McAuliffe at New Albion, all of whom collaborated with Grossman on special beers to commemorate the 30th anniversary.
Grossman became a pioneer himself, and the name Sierra Nevada is synonymous with the quality-before-quantity brewing philosophy. Back then there was a growing cadre of beer enthusiasts and homebrewers who were tired of the anemic and barely discernable beer choices that were commercially available. But to take that first step and move from a beer lover to a professional brewer in that era of few resources, reference points, and mentors, as Grossman did, was a giant step.
Thirty years later, Grossman looks back fondly, and with humility, at the evolution of the Sierra Nevada Brewing Co.
Sam Calagione: I want to start by congratulating you and everyone at Sierra Nevada on this momentous anniversary. To steal a line from Bob Dylan, how does it feel?
Ken Grossman: It feels pretty good. I usually spend the week during Christmas and New Year’s going through files and trying to get organized for the next year, and I ran across come very early files from moving into this facility which we did in the late 80s. I was seeing some of my projections from back then and how much we thought we could make and what we thought the market would bear, and it’s been pretty humbling. We were hoping to be able to brew 40,000 barrels back in ‘90 or ‘91. And on top of my spreadsheet it said “dreamer.”
SC: What were your earliest contacts to the burgeoning small-scale commercial brewing scene?
KG: My recollections of Anchor start back with me growing up in Southern Cal with my buddy Cal Moller, my friend’s father who was a serious homebrewer, as soon as Fritz starting bottling around ’65. I remember Cal hearing about it, and him eventually going to San Francisco and getting some bottles in ’67 or ’68. I remember being pretty intrigued as a homebrewer—I mean here’s this new American sort of craft brewer who is doing something way different.
SC: It’s not like Anchor was a start-up—they never shut their doors, but when Fritz bought Anchor, they were on the cusp of shutting down, correct?
KG: Yes, the beer Fritz brewed was totally different from what Anchor was making before he took it over. The beer was bad—funky infected, wooden fermenters, wooden barrels. It wasn’t well-made beer until Fritz took it over.
SC: Before Fritz, was Anchor trying to make traditional post-Prohibition lagers like the mega-breweries that were gaining huge traction and market share in the 60s and 70s? And not doing the steam beer?
KC: They were doing the steam beer, they had shallow open fermenters—it was a funky brewery from whatever year they moved from under the freeway bridge. When Fritz realized he had really infected beer, he spent a lot of time learning about microbiology. I remember him telling me he got his first microscope and he cranked it up and looked at the beer and he was horrified by what he saw. It was full of all sorts of bugs. He knew he had a lot of work to do but he was ready to do it and go about it the best way.
SC: What about your first pilgrimage to Anchor?
KG: I remember going up on a bicycle trip in ’72. I was only 17 and I was riding down the coast from Novato over the Golden Gate Bridge and into San Fran. We stopped in a bar to have lunch somewhere on the Pacific Coast Highway and started talking with the bartender. He was talking about this new version of Anchor beer that they were just starting to bottle. They had it there at the bar and I told them I was a homebrewer and he just gave me a bottle for free. I tried it and I just thought, “Wow.”
SC: You were already homebrewing by then. What styles of beer were you making before you had that bottle of Anchor?
KG: At that point there was some information about all-grain mashing, so I had stepped up to all-grain brewing. I remember doing a whole range. A lot of stouts. A lot of ales. In fact, I recently found some of my old recipes.
SC: By this point you had a great appreciation for traditional all-malt English ales. Do you remember the Anchor Steam being a real revelation?
KC: Oh yeah. And the other commercial beer we were drinking that was in the same vein in terms of being really flavorful—we didn’t drink it regularly but I remember having a few of them—was Ballantine IPA, which was quite hoppy back then. It was dry-hopped with hop oil. And we were getting some nice English beers. I had a friend who worked at a liquor store and he would bring back some great beers. I remember Carlsberg Elephant Malt being one we drank a lot of and back then it was a pretty interesting beer. A lot of hops, a lot of flavor.
SC: Let’s flash-forward to the first time you met Fritz.
KG: I met Fritz for the first time in 1978 in Oakland at the Home Beer and Wine trade association meeting. It was not a consumer event—the organization was for owners of homebrew and home wine making shops. I called Anchor and set up a tour with eight or 10 of us homebrewers while I was in town. I remember buying a case of Old Foghorn.
SC: As you were taking that first tour, were you already envisioning yourself opening your own brewery in the near future?
KG: That was when I first started to think about it and then I went and visited Jack [McAuliffe, at New Albion Brewery in Sonoma]. It was after visiting Jack that I said “OK, I think I want to do this.”
SC: And Jack’s brewery was a bunch of food-grade 55-gallon steel drums that he personally converted into both the brewhouse vessels and the fermenters?
SC: And he also had a handmade, gravity-fed bottling line?
KG: Yes….well no, not a bottling line really. He had a six-wide bottle washer, World War II vintage, made out of battleship decking. I know because I own the same machine. The whole interior is diamond plate turned inside out. For a filler he just used a wine filler; a four- or six-head gravity filler. I think he also had a soda capper from the 40s or 50s that was maybe six heads. He was rebuilding that on the side but I’m not sure if he ever got it into service.
SC: So after the visit to Anchor and visit to New Albion you now had the perspective of two different relatively small-scale commercial models as you conceptualized opening your own place.
KG: Yep. What Fritz had was a commercial brewery. What Jack had was really a large scale homebrewery. I thought I could do what Jack did. I didn’t think I could go find all this commercial equipment. So I decided, like Jack, I would fabricate everything out of cast-offs, stainless steel, used and spare parts.
SC: But when you ran the numbers you could kind of sense that scale-wise you probably had to at least be in-between the two to be viable?
KG: Yes, we saw that Jack was struggling and trying to expand. He needed to. He acknowledged even back then that his volume was too small to survive. But he couldn’t find money and with his infrastructure so small he was challenged to expand where he was at. As he ran out of steam and money, no investor was willing to put money into that scale operation.
SC: In that era, what additional research did you do as you moved toward opening Sierra Nevada?
KG: I visited Jack a few more times and I spent a lot of time in the research library at UC Davis meeting with Dr. Lewis and a couple of his grad students who gave me some great input like, “Yeah, you probably can’t do a lager beer on homemade equipment, but you probably could do an ale.” Some sound thoughts for our limited budget. And they had seen New Albion, so they were aware of how Jack had gone to market.
In hindsight I must have been a total pain in the ass. I remember trying to convince my mom that I could open a commercial brewery. I remember telling her, “Meet me at Anchor Brewery in San Fran and I will give you a tour.” So I show up at Anchor with my mom and I just tell the head brewer, Mark Carpenter, “Hello, I’m here with my mom and I’m just going to show her around a bit.” Boy, what a presumptuous asshole he must have thought I was. Just show up with my mom and start leading my own tour. Fritz and Mark came up and visited my brewery right after we opened. Mark used to come to Chico and he stayed with me a few times.
SC: And Mark was as helpful to you as Fritz was?
KG: Yes, and Gordon too. Gordon McDermount was Anchor’s plant management guy. He was a little more reserved but I could always call him with a question or a problem or if I needed malt or something. Through the years, as Sierra Nevada has grown, we have tried to reciprocate. I don’t know that we fully have. Back in those days, we were always in need of equipment. Anchor was outgrowing equipment so they were an important source for the used equipment we acquired, which allowed us to grow. I bought my first filter from them. I bought my first bottle filler from them. Conveyor sections. If I needed something I would just go down there and see if they had something that would help me out.
SC: And it wasn’t really preordained that there would be this level of altruism among the first craft brewers. In that era it was pretty cutthroat; the big brewers were getting big and the regionals were getting pummeled.
KG: Although Fritz reminded me recently that he was helped out a lot by the San Fran breweries that were in operation at the time like Lucky Brewery and Falstaff; there were three or four regional breweries still operating around the city. And Fritz said he would never propagate his own yeast back then. He would just borrow yeasts from the bigger breweries around town. He said he would rotate so that he wasn’t bugging each brewery too much.
SC: So in that era, there were viable regionals all around America. But it also coincides with when the bigger breweries like Schlitz, Miller and A-B were really starting to marginalize and gobble up the regional players. How helpful were those big breweries with the regionals? Certainly, in the marketplace, they are fierce competitors, but what about inside the actual breweries?
KG: I think brewers have always helped brewers on the technical, making-of-the-beer side. Even at the point when I was looking to start Sierra Nevada, I went and toured Coors. They were very helpful. They let me use their library. When Fritz had problems getting high-quality malt, Coors sold Fritz malt from their own malting facility.
SC: Your trajectory of growth, barrelage-wise, in the early years at Sierra was proportionately in line, albeit it on a much smaller base, with Anchor’s in that era. So at each growth phase when Anchor outgrew a piece of equipment, you were waiting in the wings to say, “Hey, I want a shot at that.” And I imagine there weren’t many bidders out there who were as interested in Anchor’s cast-offs as you were. How would that work?
KG: They were really helpful to me once they saw how serious about brewing I was and that I was capable of making quality beer. After we got up and running, Fritz came up and saw what we were doing and thought we had a great little plant and said complimentary things. Fritz and Jack were tremendously helpful in terms of helping me get Sierra Nevada established and on a path to success.
SC: When you built the brewery in 1990, that was initially the site you’re at now, which today has both the 100 and 200-barrel brewhouse. That was when you only had the 100, right?
KG: Yeah, when we first moved here the property was just big enough to cram in what we thought we needed. I couldn’t afford to buy a bigger piece of property, although there was bare ground around me. We bought 1.7 acres and on that we squeezed the pub, which back then was around 2,700 square feet, and the rest of the brewery was like 25,000 square feet. We pretty much took up every bit of square footage and with the parking lot we were maxed out on the site. I think we were five feet from the property line where my loading dock was so it was really a tight squeeze.
SC: Let’s compare that to where you’re at now on how much ground Sierra Nevada Brewery takes up and capacity.
KG: The whole site is about 40 acres and the brewery is built on probably 15 of it. That doesn’t include the hop field and some of the other stuff we’ve got next door. Just as a comparison today my POS building is almost as big as the whole plant was back then.
SC: What is your current brewhouse capacity?
KG: Pretty close to a million barrels.
SC: And what was your capacity when you built the initial brewery?
KG: Theoretical capacity was about 1,500 barrels.
SC: What did you see as priorities on creating a successful, small craft brewery?
KG: We weren’t very knowledgeable about the commercial beer world. I mean, we were homebrewers. We tried to do our homework and I got ahold of publications like Brewers Digest and all the stuff down at Davis, but as far as having market intelligence and a pulse on who our customer was going to be and what the potential was for craft beer to survive, we were pretty naive. One of the things we did fairly early on is to realize that if we didn’t self-distribute, there wasn’t enough percentage profit margin to survive. So we made the decision very early on to self-distribute. I think that was in part because Jack (New Albion) had done it, and Fritz (Anchor) even self-distributed back then. He would deliver the beer himself.
SC: What about your packaging decisions? How did you view the importance of bottles vs. draft?
KG: We made the decision that we couldn’t afford to be in the draft beer market with what we saw in terms of the potential number of retail outlets. Back then there weren’t many beer-centric bars. There were a few Irish pubs. Additionally, back then the price draft beer was selling for meant it was generally a loss-leader for the brewery. We did the math and realized it would be too challenging. Besides, we probably didn’t have the money to buy cooperage. We figured if we sold on premise and in liquor stores, did self-distribution, and charged 85 cents a bottle, which is what we figured the upper end was, we could make a go of it.
SC: How much thought went into creating your portfolio? Did you have a vision for seasonals like Celebration coming out occasionally, or did you assume that you would only do core beers?
KG: Our original vision for our portfolio really came from a picture of a brewery from the turn of the century, and below the brewery’s name it said “ales, porters and stouts.” We saw that and thought, “That’s a good range of beers,” and that was where New Albion was as well in terms of a range of lighter, malty, and dark styles. As homebrewers we had a wide range of beers we were brewing. We made the decision that we would only use one yeast strain initially and we didn’t have the wherewithal to be doing lagers and ales and manage two yeast strains from the start.
SC: Yours is one of the best-known yeast strains in our industry and has launched thousands of other beers around the world. How did you decide what characteristics you were looking for?
KG: We had maybe eight or 10 different cultures already in our yeast bank as homebrewers and when we started to look at commercial brewing, we approached some of the yeast labs and got samples of everything that was in the U.S. at the time. I’ve got notes for our basic pale ale recipe showing all the different yeast strains we were experimenting with. Since we knew we were going to bottle-condition, we really wanted something that formed a tight mat on the bottom. That was one of the criteria we looked at in addition to rate of fermentation and flavor profile.
SC: When you say “we,” in that era, who was looking at this stuff with you?
KG: Paul [Camusi] and I. We were 50-50 partners from day one. I did pretty much all the equipment. I would track down equipment on solo road trips, visiting communities up and down California and into Oregon. I would find a small dairy community and go to the surrey store, which was the supply company for milking equipment and tanks, and say, “Do you know of any dairies that have gone out of business?” I spent many, many days scouring for pumps and tanks and I’d find some defunct dairy barn full of old milking machines and stainless pipe pumps and I’d go in there with a hacksaw and wrenches and unbolt everything and figure out how to get the tank and equipment loaded in my truck.
Besides the dairy pilgrimages, a guy named George Pizone ran this multi-acre scrap yard down in Keys, Calif. that focused on food processing equipment. He was near the Gallo winery and some other big food plants, so he had lots of stainless steel valves and fittings and tri-clamps and plug valves and conveyor chain and all sorts of stuff. I would go down there on a regular basis and that’s where I got my mash tun and kettle. The kettle was a steam-jacketed vessel probably built in the late 40s or early 50s and the steam jacket had rusted out but was cork insulated. I took it out to the junior college and began working on it. Since I was planning on opening the brewery, I realized I needed all these other skills that I didn’t have plus I didn’t have stainless steel welding equipment, fork lifts or drill presses. I had a great group of teachers at the junior college who didn’t mind that I would go out there and fabricate my brewing equipment.
SC: Were you technically enrolled in the classes?
KG: I enrolled in every one of the farm/ag classes—whatever classes had shop access. Sometimes I would spend the whole day in some kind of farm welding/farm mechanics workshop.
SC: When you were going on these runs to buy the assets of dilapidated dairies, where did you store the stuff?
KG: At first I rented a little farm, an almond ranch, from some friends. They were farming it but we were living in the farmhouse and they had a yard and tractor and things that could lift equipment up. So we actually stored a lot of equipment at the first house that I lived at out in the country because we had some acreage there.
SC: Tell me the Sisyphean story about building your first mash tun screen.
KG: I was trying to find a pre-perforated or milled bottom-screen but in reality the stuff on the market that was suitable was way too expensive and this was before wedge wire screening, or at least before I had discovered it. So I made the decision I would perforate the screen myself. I bought a sheet of 10 gauge stainless steel and cut it up using a hand-cutter. I sheared the pie sections and cut the outside with a Beverly hand shearer. I spent many days, actually probably more like weeks, drilling thousands of holes through the false bottom and everyone thought I was nuts. “Why didn’t you buy perforated stainless?” But I really couldn’t afford that.
SC: In those early days, where was the money coming from?
KG: I sold my homebrew shop and I had been saving money, running a bike shop, so we each had a small nest egg, somewhere around $7,000 or $8,000 each, that we put into the pot and then in our business plan. Initially we thought we could do it for $50,000 to get the doors open. We had settled on somewhere around a 10-barrel brewery and after seeing Jack’s 1.5-barrel operation and realizing how much of a struggle it was to make enough beer per batch to make enough money to live on, we felt that 10 barrels or 300 gallons per batch was workable.
SC: At what point did you decide to focus on whole-leaf hops? Correct me if I’m wrong, but I believe Sierra Nevada uses the most whole-leaf hops of any brewery in the world.
KG: That’s what we hear. I was never a huge fan of brewing with pellets even back as a homebrewer. I really liked to use cone hops. I made pilgrimages to Yakima starting in ’76, I think. I would go up there and buy 100 one-pound brewers cuts, which were the cuts being prepared to send to breweries for examination. I’d buy 100 or 200 cuts, in five or seven varieties, whatever was being grown in those days. Nobody wanted to sell me a bale or half a bale—as a homebrew shop customer I was only using a small amount from their perspective. A lot of varieties were not pelletized in the early days; things like Cascades, when they were first being grown, weren’t really available in pellet form.
SC: What Sierra Nevada brands came to market immediately in the first full year you were open? What was your blend of sales, if you remember, for your year-round brands?
KG: The pale ale was certainly the highest, but it was such a small market and no six-packs. Everything was in individual bottles. We were selling a fair amount of porter and stout, probably twice as much ale as we were selling porter and then half as much stout. Not many people really knew those styles back then anyway.
SC: At the National Homebrewers Conference in 2009, you shared some of your early recipes and I was pleasantly surprised to see how close that beer is today to what it was then. Is there any difference in IBUs or ABV versus the initial commercial batches?
KG: Nope. Essentially we’ve tried to maintain the same flavor profile with quality improvements as we’ve gotten technology advances in oxygen control and milling. We didn’t have a lab so we couldn’t analyze IBUs but the original recipe was essentially the current recipe.
SC: What were some of the early sales calls like trying to sell a beer that hoppy?
KG: Paul and I were doing a lot of the account calls and Steve [Harrison] was working for us part-time when we first started brewing. I remember walking the streets trying to sell. No six-packs, no POS, just a case of loose bottles in the car. We’d take a bottle into the retailer and a lot of them didn’t even bother trying it. They just said no. But the ones that tried it were like “Huh, it’s unique. Maybe we can sell some.” I think people viewed it as a homebrew—we were just a couple of college kids that homebrewed but decided to sell the beer we made.
SC: If you look at that first 10-year timeline, let’s say 1980-1990, a period of really strong growth, what do you see as the critical factors for achieving growth in that period?
KG: The first 10 years it was a fog. The first four or five years we were feeling our way through this new world and figuring out how to make beer, and then realized pretty early on that the cash flow just wasn’t adequate and we really couldn’t survive. We borrowed money from a variety of friends and one of our chemical suppliers, Larry Cullatin. He loaned us $10,000, which was a lot of money back then. We paid him back in a year or two.
The article that was written in the San Francisco Chronicle in 1982 about us was pretty pivotal. Up until that point we were struggling to find places that would take our beer. There started to be some articles written that gave us credibility. And then Chez Panisse started putting our beer on very early on, in the early 80s.
SC: What year did you start working with distributors?
KG: I think in ’82 we went to Consumers Distributing in San Francisco. I don’t know how we got the beer down there. The second load went to A&D Distributors and I drove it in my ’57 flatbed. I looked like a total hillbilly. I actually stopped at Consumers because they had ordered one pallet of beer and it had been like four months and they hadn’t reordered. I asked them, “You need any more beer?” “No, we’re not really sellin’ it.” So I ended up finding pretty much the whole pallet of beer was sitting behind something. They didn’t even know they had it.
SC: You were never frugal in terms of ingredient choices or releasing beers that didn’t meet your standards. Was that a conscious thing, or was that just a homebrewer’s reflexive approach to what’s important?
KG: We saw the pitfalls that a number of our peers were going through with product problems and consistency issues. Enough of them came and went that we knew we really needed to stay focused on trying to give the consumer the experience they wanted and have them keep coming back to our beer. We couldn’t afford to market to them, so we had to hopefully appease their taste buds in the consistency of what we were brewing.
SC: As part of your 30th anniversary year, you’re releasing three beers with four of your fellow trailblazing compatriots—sort of the inaugural class of the craft brewing school. Tell us about these beers: how they came about and why you chose the styles you did?
KG: I’ll start off with Fritz because he is the one who had the greatest influence on me early on, pre-New Albion, as a homebrewer and beer lover back into the 1970s. The beer I’m doing with Fritz is a stout. [Fritz and Ken’s Pioneers Stout, released mid-March.] My very first batch of beer I brewed commercially at the brewery on November 15, 1980, was a stout.
With Jack, we’re going to brew an amped-up version of his first ale. He used 100 percent Cascades and we’ve tracked down his yeast strain. [Jack and Ken’s Ale, a barleywine to be released in mid-July].
SC: What about the beer with Charlie and Fred?
KG: I bought Fred’s book [A Treatise on Lager Beers] right when it came out in 1970. Up until that point, all the English publications I had read were really focused on English ales and lots of sugars and those were really the kind of beers that I was brewing as a homebrewer. When Fred published his book, it was a big eye-opener and had a lot of Germanic lager styles, dortmunders, and a whole range of beers that I was pretty unaware of. So we’re going to do a strong lager with Charlie based on Fred’s work in that area early on. [Charlie, Fred and Ken’s Lager, an imperial helles lager released in mid-May.]
SC: I think it’s apropos that in celebrating your 30th anniversary, instead of buying a sweet blimp or an ad during the Super Bowl, you’re recognizing other people that helped bring our industry along. On behalf of the 1,500 or so odd craft brewers out there, thank you for doing so much work and opening so many doors for us.
KG: You know I wouldn’t be here if it wasn’t for those guys, so it’s been a great honor for me to be able to give something back to them and what they did to get the industry to where it is today.
Sam Calagione is founder of Dogfish Head Craft Brewery in Milton, Del.