New Belgium Brewing Company: Brewing With a Conscience

The Wirth Chair in Environmental and Community Development Policy UNIVERSITY OF COLORADO AT DENVER & HEALTH SCIENCES CENTER The Graduate School of Public Affairs New Belgium Brewing Company: Brewing With a Conscience By Christopher Asher, Elina Bidner and Christopher Greene January 2003 The Wirth Chair in Environmental and Community Development Policy The Graduate School of Public Affairs University of Colorado at Denver & Health Sciences Center Campus Box 133 | P.O. Box 173364 Denver, CO 80217 New Belgium Brewing Company: Brewing With A Conscience Christopher Asher Elina Bidner Christopher Greene Faculty Advisor: Thomas J. Dean Leeds School of Business University of Colorado at Boulder Introduction Jeff Lebesch and Kim Jordan founded the New Belgium Brewing Company in 1991 (“NBB”), with a mission “to operate a profitable company which is socially, ethically, and environmentally responsible, and that produces high quality beer true to Belgian styles.” From this initial vision, they developed a set of “core values and beliefs” that guided the company through its early, fast paced growth. Fueled by the success of their flagship beer, Fat Tire, New Belgium Brewing Company’s growth greatly outpaced that of regional competition in a highly competitive industry that exploded on the Colorado scene in the early 1990s. NBB was able to withstand intense pricing pressures and maintain continuous growth, becoming the 6th largest specialty brewer in the United States by 2002, and winning numerous awards along the way at the industry’s most prestigious events. The company’s focus on energy efficient brewing processes and environmentally friendly technologies and practices were reflected in their mission statement and core values. By holding true to these beliefs, NBB has set new standards for efficient brewing operations, environmental stewardship, and employee happiness for the industry. The 1995 design of a new brewery and operations facility, which became the industry paradigm for energy efficiency, indicated the company’s level of commitment to minimizing environmental impact. In 1999, NBB became the first brewery to purchase 100% of their electricity from wind-generated power. The latest expansion, which was completed in 2002, displayed the intent of NBB to continue growing in a way that is environmentally sustainable and their commitment to maintain the quality of their products as batch sizes increased to help supply a wider range of distribution and greater overall demand. The Brewing Industry The brewing industry in the United States had evolved from an industry dominated by numerous small local breweries (pre-Prohibition), into one dominated by few very large companies that had survived Prohibition. From the 1930s, until the late 1980s, large domestic brewers dominated the market, and beer drinkers did not have many options on the shelf. Then the introduction of Sam Adams, by the Boston Beer Company, in the early 1990s helped spur a microbrew craze that spawned over a thousand breweries in the United States in the next decade. The Boston Beer Company used clever radio advertisements featuring the company’s founder, James Koch, to help educate beer drinkers about the difference between all-malt craft brews and the mass-produced domestic beers made with only about 60% barley malt and 40% rice, or corn (as a cheap substitute). In the following 20 years the craft brew market matured, with many breweries going out of business, and others consolidating operations or merging with other small operations. While the entire beer market did not grow significantly during the 1990s, the market share of craft brewers grew every year between 1980 and 2001 (Beertown.org, 2002) (Exhibit 1 displays the craft brewing industry facts from 2001, as well as industry definitions.) Even though craft brews only accounted for about 3% market share of the national beer market in 2001, large domestic brewers paid close attention to this movement that had carved a $3.35 billion dollar 1 market out of a pie that wasn’t getting any larger. In 2001 craft brewers received 6.5% of the revenue in a $51 billion market, and only produced 3% of the country’s volume. Since the inception of the craft brew industry, major brewers branched out into several new specialty products, many successful microbreweries expanded to become regional specialty brewers, and the number of other brewpubs and microbreweries around the country continued to grow. These two trends resulted in the U.S. having the largest number of specialty brewers in the world. While California boasted the largest number of breweries (over 100), Colorado produced the largest volume of beer with just over 80 breweries (partly due to the production at Coors and Anheuser-Busch breweries.) Colorado has some of the purest water in the country as a result of being in such close proximity of the continental divide, and is close to many of the top grain producing states; making it an ideal location for brewing operations. Denver, Colorado was also home of the Great American Beer Festival, America’s premier industry showcase; over 1,500 beers from 300 breweries around the country are judged by category and awarded medals. (Beertown.org, 2002) Environmental Issues and Sustainability in the Brewing Industry Some of the major inputs involved in the brewing process are water, electricity, malted barley, natural gas, and packaging materials such as glass, cardboard, and plastic. The major outputs are wastewater, spent grains, carbon dioxide, heat, and recyclable packaging materials (see Figure 1 for beer production life-cycle analysis model; see Exhibit 2 for the Asahi Brewery Environmental Output model, which is the result of life-cycle analysis.) Spent grains, mixed with other by-products (yeast slurry and trub), were generally sold to cattle farmers for feed. Wastewater is one of the most significant by-products, with a large amount resulting from cleaning tanks and other equipment. Breweries can use up to 8 gallons of water for every gallon of beer packaged. More and more breweries, both domestically and worldwide, attempted to modify their processes to minimize the environmental impact from their operations. To accomplish this, many breweries attempted to “close the loop” by converting waste into sellable products, or inputs for other production processes. While new technologies made the brewing process more efficient, it remained an energy- and water-intensive process that required continuous improvement. 2 Figure 1 3 ... - tailieumienphi.vn