E-Malt.com News article: US, CA: Sierra Nevada Brewing considering a second production facility

With its Eastern U.S. growth in double digits and fuel prices rising, Sierra Nevada Brewing Co. is considering a second production facility east of the Mississippi River, ChicoER.com reported on May, 7.

Saying there are no plans to change anything in Chico, CEO Ken Grossman confirmed that Sierra Nevada is looking eastward.

Grossman said shipping beer back East isn't very sustainable, and with the cost of fuel an ever-growing expense, a second production facility makes sense.

Grossman stressed that a decision to expand has not yet been made, but could be by the end of summer.

"We've been looking at the business model for five or more years as energy costs have gone up," Grossman said.

Nevertheless, Sierra Nevada has been barraged by calls and emails from communities that would love to have the respected and environmentally friendly brewery in their midst.

Sierra Nevada spokesman Bill Manley said he's been getting several hundred emails a day about the search.

Manley said more than 200 sites have been investigated primarily by a site locator who tried to keep the brewery's identity out of the discussion. He said there are "favorites," but declined to identify those.

Word got out and Sierra Nevada has been flooded with communications.

Manley said having a second facility would relieve pressure from the Chico facility.

"We have a theoretical (annual) capacity of one million barrels, and we're at 800,000," said Manley, adding that Sierra Nevada's Eastern consumption has been growing at 15 percent to 25 percent a year.

He noted Western growth has been at 1 percent to 2 percent annually because of Sierra Nevada's market hold here, and some competition from other craft breweries.

A few Chico employees might be tapped for the Eastern project, but if anything, the move might free up tank space for additional specialty brews here, requiring more employees, Manley said. Already, the brewery employs about 500 full- and part-time workers.

"No jobs would be lost in Chico," Manley said.

Grossman said it takes about two years to open a new plant, so early planning is critical.

Sierra Nevada owns about 30 acres in Chico, including at the brewery and a railroad spur off Hegan Lane.

One publication said the brewery is looking to invest at least $50 million in a 30-to 40-acre site.

Manley said access to transportation, the best quality of water, land prices and quality of life would be among the considerations.


11 May, 2011