Sierra Nevada Brewing Company

Sierra Nevada Brewing Company

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Sierra Nevada Brewing Company

Executive Summary

This paper seeks to analyze the possibility of forming an alliance between a Seattle-based brewery and Sierra Nevada Brewing Company. The objective of the paper is to evaluate the environmental setting in which SNBC operates with the intention of discovering any administrative or legal challenges that may interfere with the success of the alliance.

Vision and Mission of SNBC

The company is inspired by a desire to be unwavering and bold producers of traditional drinks. They are also inspired by innovation and creativity when manufacturing flavored beers. Sierra Nevada Brewing Company (SNBC) is known for maintaining high levels of environmental sustainability in their production processes. The company has won several awards such as the Green Business of the Year in 2010. On its premises, the brewery is run by solar energy consisting of 10,000 panels located on its rooftops and parking space. The brewery consumes approximately 2 megawatts of electricity within its grounds. It also has constructed a charging station for hybrid vehicles within the same location. The company recycles cooking oil from its eatery for biodiesel production that is used in the delivery trucks. SNBC has also signed agreements with a local ethanol business to manufacture high-grade ethanol petroleum from its waste yeast. Used grains are vended to cattle ranchers as livestock nourishment; spent water is recycled within the breweries in a treatment plant, and transported to the fields for irrigation purposes (Casler, Gundlach, Persons, & Zivnuska, 2010). Sierra Nevada also purchases exclusively organic hops that are used in the production of alcoholic drinks.

SNBC has a wide target market but the largest single group is the age group between 20 and 35. In this group, Sierra Nevada is interested in the working class, hipsters, and college students that still enjoy the conventional beers. While this group is quite stable, the need to expand is imminent (Weaver, Schmidt, & Grossman, 2012). This need is caused by the rising awareness of health concerns caused by over consumption of alcohol. Currently, there are new styles of brewing beers that has increased the number of alternatives for consumers. This makes it difficult for SNC to maintain a large market share.

Under the “Friends of Glass” imitative, Sierra Nevada brewery has managed to reduce the number of landfills within the local area considerably. The Seattle regulations expect that all companies should engage in a form of corporate social action that conserves the environment. However, no explicit clause obligates companies to do so. Therefore, any company joining SNBC through an alliance does so in the absence of any regulations. The good will of the joining company is however necessary (Burton, 2010).

Sierra’s craft beer shows signs of maintaining a positive growth trend, as it symbolizes a reasonably priced luxury and stood well with hard spirits that were the major beer competitor in the target customer segment that are adults between 20 and 35. Craft beers were ranging at $30 for every case in 2008, were especially famous since regional and neighboring specialty breweries presented brews with unique smells, tastes, and ingredients. These new entrants offer a unique chance that targets women. This group is regularly excluded in the statistics for beers due to their low frequency of consumption (McNall, Hershauer, & Basile, 2011). However, they might readily take up brews that are more stylish if the positioning approach targeted the particular appeal. Americans   have proven to be loyal consumers of craft beers because of their preference for diversity and the prestige associated with drinking beer from autonomous, small breweries. Around 2001, craft breweries experienced an incessant increase in market share. By 2008, local craft beer sales in the United States reached 8 million barrels that represented an average profit margin between 6 to 10%.

Even though numerous competitors exist across the world, only New Belgium Brewing and Boston Beer Company have the potential, scope, and commitment to ecological concerns to compete effectively with SNBC. At one point in 2008, Boston Beer Company had overtaken SNBC as the leading beer manufacturer in the United States. There has been a general drop in the sales margins for all the three companies over the past three years. This change is attributed t the preference of healthier alternatives. Furthermore, beers are facing a major competition from other forms of recreation drinks such as soft drinks.

Conclusion

In the issue concerning the installation of Phase IV of the solar panels, the ethical dilemma arises in the funding process. On one side, SNBC under the leadership of the owner, Ken Grossman was interested in creating a strong energy sustainability foundation that was largely based on the production of power through the solar panels. With the withdrawal of state funding, it would be impossible for this dream to be realized. The brewery would have to continue depending on other sources of energy. However, Mr. Grossman had the alternative of using company funds to finish the last section of the project. This would have created potential conflict and legal action against him since the decision was not sanctioned by shareholders. In fact, if any losses were made from such a decision by the founder, it would lower the confidence and trust of the stakeholders in the future of the company.

References

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Burton, R. S. (2010). Hops and dreams: The story of Sierra Nevada Brewing Co. Chico, Ca: Stansbury Pub.

Casler, A., Gundlach, M. J., Persons, B., & Zivnuska, S. (January 01, 2010). Sierra Nevada Brewing Company’s Thirty-Year Journey toward Sustainability. Human Resource Planning: Hr, 33, 1, 44.

McNall, S. G., Hershauer, J. C., & Basile, G. (2011). The business of sustainability: Trends, policies, practices, and stories of success. Santa Barbara, Calif: Praeger.

Weaver, K., Schmidt, A., & Grossman, K. (2012). The Northern California craft beer guide. Petaluma, CA: Cameron + Company.

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