The just-drinks Interview - Sierra Nevada Brewing Co founder Ken Grossman - Part II
Sierra Nevada does not believe in traditional forms of advertising
Last week, we ran the first part of an interview with Sierra Nevada Brewing Co founder Ken Grossman. Here, in part two, the Californian craft brewing icon discusses big brewers' attempts to capitalise on the segment's success and how craft consumers are reacting to cans.
With craft stealing share from traditional light beers, the big beasts of the US brewing sector, led by Anheuser-Busch InBev and MillerCoors, are continuing to spread their wings into the segment. This is being done through both acquisitions and the launch of their own “artisanal” brands.
As has oft been documented on just-drinks, the two companies' attempts at attaching themselves to the craft movement has stirred up strong feelings among the US’s small brewing fraternity. In particular, big brewers that omit their company name from the “craft-like” brands that they own raises ire among small producers.
As a senior member of the trade group which represents the country’s craft brewing sector, the Brewers Association, Grossman is more than happy to share his view on the intensifying turf war. “It would be nice if there was a little bit more transparency in the marketplace,” he says. “Consumers are getting smarter and smarter, and there are plenty now who know which brands are owned by which big breweries and that does affect some of their buying decisions.”
He adds: “That’s not to say that big brewers can’t put out good products; they have very good breweries and factories. But, there’s a lack of soul in a lot of operations that the small brewing industry has brought to the product. That’s why we’re growing at a strong clip.”
Grossman declines to define craft beer, instead preferring to give his take on what a craft brewer is. “It’s an independent, relatively small brewer, compared to a large multinational entity that has a different way of going to market than a small brewer does.” The BA defines a craft brewer in similar terms, but also one that brews 6m or less barrels a year.
Would Grossman like to see some kind of legal definition of a craft brewer? “We live in a capitalist society in America, it’s a business practice that’s legal and so be it. We can cry about it, but we’re doing what we think we need to do to at least have some transparency there.”
He adds: “I think it’s more of an ethical (thing). You shouldn’t necessarily hide behind who you are.”
The other factor that sets Sierra Nevada apart from other bigger brewers is its decision not to pay for advertising. Does Grossman think conventional ads are not worth the money? “I’m not sure it’s the right image to have, or whether our consumers would connect with us through a 30-second TV ad. It doesn’t feel as genuine. We try to connect with our consumers on a more personal level.” One example of this is Sierra Nevada's 'Beer Camp', which regularly sees restaurateurs and bar owners come to Chico for a two-day beer "experience".
Does Grossman worry though that the craft beer marketplace, however you define it, is becoming too crowded? “It’s getting more crowded, most definitely,” he agrees. “There’s more than one brewery a day opening. But, the consumer is really driving a lot of the demand, so it has changed the dynamic of the consumer, the distributor, the retailer, everything from the brewer down has been changing rapidly.”
Another change has been the growth of craft beer in cans. “Right now, that segment is growing for us pretty rapidly,” says Grossman. However, he admits, there’s still a “job to do” in persuading consumers about the quality of craft beer in cans. But, he adds: “Consumers are accepting the package. Our products are well-placed. What people associate with our beers - hiking or skiing - means a can really works a lot better for those types of occasions.”
All these changes must be exhausting. Despite his apparent anti-corporate stance, has he ever considered selling up? “There’s certainly been plenty of enquiries and offers over the years,” Grossman says, casually. “I wouldn’t sell out to reap a bunch of money and to some organisation that I’m maybe not that well aligned with.”
How does he feel, then, about those that already have, like Blue Point to Anheuser-Busch InBev? "That’s their perogative how they want to run their business," he says. "It’s their path and good for them.”
And retirement? Is it on the cards anytime soon? He acknowledges that, with the advent of his 60th year, it’s “time to start slowing down a bit”. At least Grossman can relax knowing the business is in family hands, plus the fact that he's reportedly worth an estimated US$800m. “My son’s part of the management team in North Carolina and my daughter works here in Chico,” says Grossman. Yet, he won’t be giving up the reigns just yet. “I’d like to work less, that’s all I can hope for right now.”
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