AMDP Recommendation
TO: Clark Hansen, CEO, Anima Mundi Development Partners
FROM: Ellie Aguirre, Research and Development, Anima Mundi Development Partners
DATE: March 11, 2022
SUBJECT: Investment Recommendation: Sierra Nevada Brewery for Environment and College Education
You hired me because of my ability to spot companies that embody the AMDP standards. After researching the companies AMDP typically sponsors, I realized that there was a gap—we don’t help small communities. To fill this hole, I suggest that AMDP invest in Sierra Nevada Co. because of its dedication to the environment and the small-town, Chico, community.
Before I explain the positives of Sierra Nevada, I’ll define the AMDP standards I used to choose the perfect company to invest in. These terms are: Triple Bottom Line, Corporate Social Responsibility, Social Enterprise, and Carbon Footprint.
AMDP Standards
Triple Bottom Line: A business idea that places emphasis on the company's environmental and social impact, as well as profitability. Most people separate the triple bottom line into three P’s—planet, people, and profit (Harvard Business School Online).
Planet: making a positive impact on the planet and understanding the company’s environmental impact
People: acknowledging a corporation's relationship with the community and trying to benefit their employees, customers, and society
Profit: ensuring that stakeholders have financial success from the company’s revenue
Corporate Social Responsibility: The idea that a business should always do good and try to better society. This should be in the form of environmental, philanthropic, ethical, and economic success (Investopedia).
Social Enterprise: An organization that was built around solving a problem within society (ex: homelessness). Their profits go towards the cause they are supporting (The Good Trade).
Carbon Footprint: An emission of toxins (CO2/greenhouse gases) that negatively impact the environment (air, water, and land) from a person or organization. It is measured in tons of greenhouse gases that enter the atmosphere within a year. We should lessen our carbon footprint to strengthen: biodiversity, the economy, public health, and the environment (Green Matters).
Sierra Nevada Brewery
Their Mission for Sustainability
Sierra Nevada claims to “[push] boundaries, whether that’s in [their] brewhouse, [or] with sustainability” (Sierra Nevada). They are successful in their goals because they reinvented the relationship between the craft-brewery industry and the environment. Their closed loop production system saves Sierra Nevada $8 million annually (Brewing a Better Business). In the beer-making process, 99.8% of their solid waste is reused (Brewing Co.). These are some examples of Sierra Nevada reusing their production’s inputs (How Sierra Nevada Brewery Went Green):
the yeast, grain, and hops are recycled into animal feed
the CO2 from fermentation is inhaled by plants and makes pure oxygen which is used later in the brewing
the water is filtered through their own treatment plant then used to water the on-site hopfields.
semi trucks run on converted biodiesel from the cooking oil used in their restaurant
Sierra Nevada owns a three acre solar field (the largest one that is privately owned in America) which allows them to have their breweries to be 100% powered by clean energy. Also, the company is invested in fuel cell power plants (converts chemical energy into hydrogen electricity using steam) as a future energy source. Their excess hydrogen energy is sold to power companies to generate more revenue.
Cheryl Baldwin, author of The 10 Principles of Food Industry Sustainability, said that Sierra Nevada “gains business advantages” by being a sustainable company (Brewing a Better Business). She attributes the superior taste and quality of their beer to its environmentally friendly production.
Encouraging College Education
The founder, Ken Grossman, aims to give back to the Chico community.
He donated $1 million to the Butte Community College Promise Scholarship Program, which pays for the tuition and fees for all first-time full-time Butte College students for one year (Butte College). This scholarship accepts every applicant that meets their basic criteria.
Sierra Nevada also contributes to giving a free college education–for two years–to all Chico high school seniors that attend Butte College. Nicole Wheeler, a recipient of this scholarship, said that it helps a lot of kids because it gives students time to save for college before they transfer to a four-year university (Butte College Interview).
Revenue and Company Growth
With 1,050 employees (22.2% are Chico State graduates) Sierra Nevada has drastically expanded from Grossman’s two-person team that produced 1,200 beer barrels back in 1980 (Working At Sierra Nevada). Here’s evidence of their progress:
The company averages about $300 million in sales per year and has expanded into the European market.
Joe Thompson, president of the Independent Beverage Group, said that “Sierra Nevada is good. They’re one of the players for the long term. They’d be worth more than a billion dollars,” after it was released that the company sold 1 million barrels of beer in 2014 (Bloomberg).
In 2016, Sierra Nevada expanded their manufacturing and made a new brewery in Mills River, North Carolina. This facility is LEED Platinum certified in environmental sustainability (Sierra Nevada). Through the expansion, Sierra Nevada is able to produce more beer.
The revenue from Sierra Nevada Co. isn’t only from their artisan brews. Merchandise with the Sierra Nevada logo is extremely popular among beer enthusiasts. The company sells: t-shirts, sweatshirts, posters, beer glasses, and hats.
Consumer Opinion
In addition to the year-round beers, Sierra Nevada makes seasonal collections. Some of these flavors are used as fundraisers for the Northern California community. The limited edition beers also sell out within hours of their release (Want a Six-Pack of Camp Fire Beer?). Ken Grossman was shocked to learn that consumers were willing to spend $12 per bottle on one of their specialty flavors. This means that Sierra Nevada has a loyal customer base who is outnumbering their product supply.
My Recommendation
To strengthen AMDP’s client list, society, and the Earth, I suggest that we invest in Sierra Nevada Co. for two reasons.
Their strong financial history assures that our investment will be returned.
Sierra Nevada embodies all of the ideals AMDP looks for—benefiting the community and environment.
It would be a mistake if we didn’t invest in Sierra Nevada Co.
Works Cited
Aguirre, Ellie. “Butte College Interview.” 11 March 2021.
Baldwin, Cheryl. “Sierra Nevada: Brewing a Better Business through Sustainability.” Pure Strategies, Pure Strategies, 24 June 2015, https://purestrategies.com/news/2015-06-24-sierra-nevada-brewing-a-better-business-through-sustainability.
“Butte College Plans to Offer Free Tuition, Fees for First Time College Students Beginning Fall 2018.” Butte, http://www.butte.edu/feeds/2018/Free_Tuition_Fees_Fall_2018.html.
Chapman, Mike. “Want a Six-Pack of Camp Fire Beer? Limited Quantities Coming to Redding.” Redding Record Searchlight, Redding, 6 Jan. 2019, https://www.redding.com/story/news/2019/01/04/sierra-nevada-update-thirsty-camp-fire-beer-youre-still-luck/2426331002/.
Coffey, Brendan. “Sierra Nevada Founder Grossman Becomes Billionaire on Pale Ales.” Bloomberg.com, Bloomberg, 20 Jan. 2015, https://www.bloomberg.com/news/articles/2015-01-20/sierra-nevada-founder-grossman-becomes-billionaire-on-pale-ales.
Fernando, Jason. “Corporate Social Responsibility (CSR) Definition.” Investopedia, Investopedia, 7 Mar. 2022, https://www.investopedia.com/terms/c/corp-social-responsibility.asp.
Miller, Kelsey. “The Triple Bottom Line: What It Is & Why It's Important.” Business Insights Blog, 8 Dec. 2020, https://online.hbs.edu/blog/post/what-is-the-triple-bottom-line.
“Mills River Sustainability Map.” Sierra Nevada Brewing Co., 10 Mar. 2020, https://sierranevada.com/map/mills-river-sustainability-map/.
Osmanski, Stephanie. “How Is Your Carbon Footprint Measured?” Green Matters, Green Matters, 27 Nov. 2019, https://www.greenmatters.com/p/how-is-carbon-footprint-measured.
“Our Story.” Sierra Nevada Brewing Co., 3 Mar. 2022, https://sierranevada.com/.
“Sierra Nevada Brewing Co. (Chico).” TRUE, https://true.gbci.org/sierra-nevada-brewing-co-chico.
Swenson, Barbara. “How Sierra Nevada Brewery Went Green.” All Business, Dun & Bradstreet, 1 July 2010, https://www.allbusiness.com/how-sierra-nevada-brewery-went-green-9760528-1.html.
Velez, Henah. “What Is A Social Enterprise?” The Good Trade, The Good Trade, 16 Feb. 2022, https://www.thegoodtrade.com/features/what-is-a-social-enterprise.
“Working At Sierra Nevada Brewing Co.: Employee Reviews and Culture.” Zippia, h https://www.zippia.com/sierra-nevada-brewing-company-careers-38372/.
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