New Belgium Brewery | A new approach | | |
GM591
Course Project
GM591
Course Project

TABLE OF CONTENTS

I. INTRODUCTION II. PROBLEM STATEMENT III. LITERATURE REVIEW IV. ANALYSIS V. SOLUTIONS VI. REFLECTION VII. REFERENCES

I.
The New Belgium Brewing Company in Fort Collins, Colorado was founded by Jeff Lebesch in 1989. The highly motivated entrepreneur started with a different yet simple concept; brew a better beer than anyone else. So Jeff went into the basement of his home and started working on several different brews, but specifically worked to perfect his two signature beers and the first mass produced products; Abbey and Fat Tire. It took just two years for the company to grow large enough that the basement was no longer sufficient and New Belgium moved into its first commercial brewing space and has continued to grow from there. The brewery has grown to the size that produced and sold over 580,000 barrels of beer in 2009 and expects to sell over 700,000 barrels in 2010 (JUICEBOX, 2010). The revenue generated by New Belgium has helped to make the brewery the 8th largest in the United States (JG Press, Inc, 2003). New Belgium beer is brewed exclusively at the Fort Collins location and is now available in 26 states from coast to coast (JUICEBOX, 2010). The company has grown from a dream in a man’s basement to currently utilizing over 200 employee owners and boasts sales of over 32 million dollars in 2009 (JUICEBOX, 2010). NBB (New Belgium Brewery) took a different approach to every aspect of business; they have made employees owners and have allowed and continue to allow employees help to run the company and make decisions. This employee empowerment only took a short time to implement and before long the employee/owners were using their powers to take the company in a whole new direction for business and especially for a brewery. NBB, with the full support of the community, began exploring options that would allow the brewery to begin the process of going green and reducing their carbon footprint. Innovative technologies have been developed, implemented and perfected by the brewery allowing them to boast an elimination of 1,800 metric tons of carbon dioxide emissions each year (Motavalli, Jan/Feb2002). The employee/owners felt that their environmental steps must be greatly increased in the mid 1990’s when heavy contaminants and increased levels of pollution were discovered in a local river; The Cache la Poudre.
As an outside consultant I will fully explore the major problems that NBB is facing, especially the impacts that the brewery places on the environment and surrounding community. Another significant issue that faces nearly every organization is employee satisfaction and retention, something that the brewery has created and utilizes innovative steps with the strong stance they have taken. Although the brewery has addressed many of the issues they face, they continue to explore and develop new ideas and techniques to not only reduce their environmental impact, but to also better the community as a whole. The environmental impact and prevention will be the main focus of this article, but New Belgium has taken innovation to a whole new level and therefore employee retention and satisfaction have been woven into the very fabric of the internal culture at NBB.
II.
The major problems that plague NBB are the same problems that every brewery faces; employee retention and satisfaction as well as pollution and contamination from the brewing process. The hours are long; the work is physically demanding and has very few rewards causing a costly high rate of turn-over among the staff. Employee motivation is difficult, at best, under these strenuous conditions and employee ideas are typically unwelcomed and unwanted by management causing employees to feel powerless and often useless in the decision making process. High employee turnover rates lead to increased expenses in training wages as well as in production and create reduced efficiency due to the high number of less experienced staff to keep things moving along smoothly and efficiently. Brewing beer also requires a significant amount of power and water consumption throughout the entire process and then even more energy is consumed cooling the beer after the brewing process is completed. Massive amounts of waste water are typically spewed out of breweries along with tons of other byproducts that are also generated when beer is being brewed. Several tons of spent grains and hops are generated on a yearly basis by the brewery. Other waste products, such as plastics, cardboard, harmful methane gas emissions and even broken glass is produced on a large scale by the brewery. Having chosen to locate this brewery in a city that is nestled on the foothills of the Rocky Mountains and only having a population of approximately 140,000 people creates many problems that the brewery might not otherwise face if they had selected a larger city to base their operations. A solution to the pollution that New Belgium generates annually has to be found, the community demands it.
III.
Much of the efforts of NBB have centered on any and all techniques to create a more lean and efficient complete series of its operations. According to M2Presswire all of the efforts by the beer giant means there is a vast amount of information available about everything New Belgium has done and is preparing to do. One very interesting article details the beer company’s attempts to once again make their operations quicker and more streamlined with the current and ongoing installation and implementation of a new Radio-frequency identification (RFID) system. This is a system that utilizes a barcode located on every keg, the barcode is scanned at every stage of production and delivery allowing instant and accurate inventory and tracking control. Already the new system is allowing NBB to track, manage and improve the utilization of the brewer's kegs (M2PressWIRE, 2009). This new system also allows NBB to better make use of their existing kegs by ensuring that more popular beers are filled faster preventing stores and bars from running out of stock on the most popular beers, especially when they are producing anyone of their widely popular seasonal beers. This also prevents the excessive stock piling of less popular brands that could spoil before they are used, again preventing waste before it even occurs. The RFID system is up to the minute and therefore allows the brewer to keep up on market trends and seasonal sales of the six different seasonal flavors that are produced at New Belgium. The RFID system also allows the brewer to know exactly where every keg is located with up to the minute precision since each keg is scanned when it is filled, again when placed onto a delivery truck and finally scanned again when delivered to a vendor. So whether any given keg is on the assembly line being filled or if it is at a specific bar in the Old Town area, New Belgium knows where it is and what is in it. The system also allows damaged kegs to be immediately identified and removed from the rotation until repaired, this prevents damaged kegs from being filled and then later drained. By eliminating the timely and costly expenses associated with wasting the contents of a keg, New Belgium has not only greatly reduced costs, but they have also reduced the amount of harmful wastewater they generate each year. As the system is further implemented it will allow New Belgium to know the fill to fill cycle for every keg in inventory and determine the length of time each keg spends at a specific distributor. This pinpoint accuracy will allow for reduced and highly accurate shipping and distribution. Trucks will be loaded with only merchandise that is needed by clients and consumer inventories will always be accurate which provides the best in consumer service and satisfaction while improving sustainability and profits. In February of 2009 ‘Brand Packaging’ reported on how NBB does not just look to save money and resources in the distribution and shipping, but also in the innovative packaging designs they utilize. This brewery does not use the typical beer carrying 6-pack packages that others use, they instead use a completely contained box composed of over 44% recycled materials. In keeping with their main mission to reduce their resource consumption, the brewer redesigned its corrugated cardboard 12-pack carriers to tighten the cases. This new design eliminated the need for partitions that separate the bottles and it eliminated about 150 tons of cardboard. This packaging further prevents 174 metric tons of C[O.sub.2] of emission production at the plant each year. The brewery also insists that the suppliers of packaging and bottling products continually increase the recycled content levels of all products being sent to the 8th largest brewer. The packaging designs go farther than just saving on materials, the bicycle on the label is meant to promote healthiness and exercise which they believe will lead to an overall happier, healthier consumer. NBB has taken the impacts of their products to heart, from beginning to end so they have also partnered with the City of Fort Collins to create and promote a healthier stream of recycled amber glass (Fat Tire Packaging, 2009). New Belgium uses amber glass for their products, this material is more difficult to create and recycle and that is why it is so important to New Belgium that their consumers utilize the recycling efforts, which will also help them to become less reliant on new raw materials. In the article “I’ll Drink to That” describes the efforts of single stream recycling, which is a method that comingles all recyclables into one container for easier and quicker collection. Due to the ease and speed, this method has been adopted by most communities as an effective manner of recycling. However this method typically results in glass containers being broken and therefore cross contamination is common and a clean and high quality material becomes more difficult to obtain. NBB has partnered with many local businesses and other breweries to create a bold single-stream recycling program across Colorado. The concept is fairly easy; provide establishments with containers to exclusively collect brown and green glass containers which are later collected to be recycled locally and turned into new glass containers for use at NBB. This program has specifically targeted bars and restaurants in the Fort Collins Old Town district. The filled carts are collected from the retailers and transported to the recycling center not by trucks, but instead by a bicycle service so that there is not any added impact on the environment. Currently about 14 businesses are actively participating in this innovative new program and city officials eventually hope to have every bar and restaurant in the 40-square-block Old Town Fort Collins area fully participating (Cattaneo & Alexander, 2006). This specialty recycling program is proving to be lucrative for both the City of Fort Collins and New Belgium Brewery alike and should be used as a model by other cities across the nation. With the proper amount of education and determination NBB could spearhead a recycling campaign that could generate more than enough glass to successfully become self-sufficient using 100% recycled material in every bottle of beer produced. NBB has been recognized throughout the country as not only one of the greenest brewers but also as one of the best tasting beer brewers on the market and in 2009 they were recognized for their 6.5% alcohol content India Pale Ale, which was selected by the Tulsa World Newspaper as the “beer of the week” (Averill, 2009). The winning beer is described as copper colored ale that forms a nice head when poured with a taste that is described as intensely full of hops with enough malt to balance out the bitterness of the beer. The article then gives a few details about the six different season flavors that are distributed by the brewer based out of the “beer mecca” that is Fort Collins Colorado. Fort Collins boasts a number of other microbreweries as well as a Budweiser brewery. Although the original founders sold the brewery in 2004 Hillary Mizia, who is sometimes referred to as NBB's Sustainability Goddess, states “Our vision is truly one of sustainability and forward thinking, recognizing that decisions we make now will have a huge impact on everything around us in the future” (JG Press, Inc, 2003). All of these innovative and revolutionary ideas that NBB has implemented to become a green company have not allowed the brewer to lose sight of one of its most valuable assets; its employees. In fact they are so good to their employees that in May 2008 NBB was named by Outside Magazine in their very first ”best places to work” edition as the best company to work for with over 250 employees. After hearing this news Bryan Simpson, media relations director for New Belgium Brewing said “It’s a tremendous honor to be recognized as a company where people love what they do and truly enjoy coming to work” (Gallagher, 2008). So even with all of the innovations that make the brewery the leader in sustainability and resource conservation, but they take the top prize when it comes to treating their employees as renewable resources as well. NBB has not only been named as one of the best places to work, but they have also been showcased on Good Morning America for the way they treat their employees. Kate Snow, the host, and Mike Roberts, executive editor of Outside Magazine, reported on the perks of working for NBB a few days after they were named the best place to work by the magazine in 2008. New Belgium is commended for taking their employees’ health, lifestyle and overall well-being into consideration making certain that their employees get the best out of life. NBB believes that if their employees are happy outside of work, they will by default be happier at work as well and therefore they encourage and promote a happier healthier lifestyle. In fact the brewery has a 50 acre bicycle course located just outside the back doors of the brewery that employees are free to use at any time. Employees are also not only encouraged, but required to drink beer while on the job. That’s right every employee is required to taste and sample the beers on a regular basis to ensure the highest possible quality product. Employees also get to enjoy a free pint of beer after every shift, a shift drink, as a way to relax and unwind from their day. Greatly discounted activities, such as Ping-Pong, Pilates, Yoga and even a rock climbing wall are all offered on-site as yet another way for employees to relax and to promote a healthier lifestyle. Employees are also rewarded for staying with the company long term; everyone is given a custom specialty cruiser after one year of service. These bicycles are created and designed every year to be that year’s poster bike for their most famous brew and signature trademark logo, Fat Tire (Roberts, 2008).
IV.
The most significant problems that face any brewery are typically viewed in the industry as a cost of doing business. NBB refuses to accept this as the case and they have strived from the very beginning to not only reduce the waste products they produced, but to also recycle and reuse as much of these waste products as they physically can. NBB has undertaken one of the most bold and innovative approaches as they push the brewery closer and closer to becoming fully self-sustaining. Every aspect of the breweries business has been streamlined to reduce as much waste from every stage the beers enter. Changes in production to reduce turnaround time, special shipping routes to ensure the most prompt and efficient deliveries of merchandise, limited distribution areas and special packaging are all steps that have been implemented in the breweries quest to become the first self-sustainable brewery in the world. Even with all of these innovations the brewery continues to produce waste and pollution that are leaked into the environment every day. The most significant issue that the brewery faces is the waste water that is created during the brewing process and the extensive amount of power needed to complete the process. New Belgium went to its employee/owners and asked them to provide the company with ideas they thought would help to address these major concerns. The employees took the task very seriously as it affects their community so drastically. The resolution to the waste water problem became very clear; collect, treat and reuse the waste water produced by the brewery. New Belgium began collecting and treating nearly all of the waste water produced in their plant and they discovered that during the treatment process large amounts of methane gas was produced. The methane could then be captured and generated an effective source of electricity. In fact so much electricity was created that in 2006 the brewery generated 10% of its required power and successfully shaved an impressive $18,000 of its yearly energy costs (Becker, 2007). New Belgium knew that this was only a small impact and they continued to search for alternative sources of power that do not have the negative impacts on the environment. In 1998 the brewery began exploring the use of alternative power sources to create the electricity the brewery so desperately requires. Renovations to the brewery were also implemented as the brewery explored alternative methods to reduce the amount of power used on a daily basis. Sun tubes were installed throughout the brewery allowing natural sunlight to be utilized in the production and office areas eliminating the need to turn artificial lighting on during the day as well as lighting equipped with motion sensors to prevent lights being on in empty rooms and prevents wasting electricity (JG Press, Inc, 2003).
V.
There is no ‘quick fix’ or easy solution to the problems facing NBB, but the efforts put forth by the brewer thus far are quite impressive and in line with their core mission statement. A well designed and ever evolving series of solutions enacted simultaneously would most likely be required in order to obtain the single goal of self-sustainability. New Belgium needs to continue to partner with other companies to help them spread the technologies, innovative recycling concepts and employee empowerment that could most certainly improve industries and the lives of our people as a whole. Using the existing platform that NBB has been founded upon as a model for not only other breweries, but any industry that could utilize the adaptations created by and in use at New Belgium. Education is the key to the success of New Belgium’s efforts thus far and through the teaching of the trials and tribulations experienced by the brewery to date, the technologies would experience great advancements. A partnership with the Federal Government would open up access to financial grants that would allow the brewery to further invest in technologies and expand programs that will lead them closer to their goal of 100% self-sustainability. Collecting or purchasing the wastewater from other local micro-breweries in the area to be treated in the on-site treatment plant would also generate additional power that during certain stages of production would actually generate an overabundance of electrical power that could be then sold back into the power grid. This would help to reduce the needs of the brewery and generate revenue that would offset the expense of collecting the wastewater from the other breweries. This would also greatly reduce the overall pollution for the region by treating water that would have otherwise been introduced into the environment. Installing additional solar tubes that have solar conductors built into them that would store power during the daylight hours and then utilize those power reserves to generate lighting during the evening hours will also greatly increase electrical efficiency at the brewery. The development of recycling partnership that would include as many cities in as many states as are willing to participate. This program would be modeled after the successful amber glass recycling program currently operating in the Old Town District in Fort Collins, this would generate not only enough amber glass to satisfy the needs of New Belgium, but it would also generate a side business selling the excess produced 100% recycled glass bottles. Delivery trucks could be used to haul the green glass to the recycling centers from areas deliveries were made to. Many of the delivery trucks are returning from out of state deliveries with empty trailers anyway, so the expenses created by the collection and delivery of the recyclable goods would be easily offset in production. This would also eliminate NBB intake of raw materials and place them one step closer to their mission. Continue with and expand upon the great model of employee empowerment that is currently in place, it is obviously working very well. Allow employees the opportunity to travel to other industries and inform their leaders of the successfulness that this model generates daily for the brewer. Again, educating those in other industries on how to more positively motivate people to stay healthy and live happier can not only reduce costs and efficiencies, but it can help to promote overall well-being for many people. Partnerships need to be built and fostered; people need to be educated on the benefits of sustainability and the needs of our environment and only then can New Belgium and companies like it begin to become self-sustaining.
VI.
This assignment was interesting and very difficult at the same time. There is an overwhelming amount of articles that showcase everything from the superior and award winning products New Belgium produces; to the impressive environmental awards they have been honored with. There are even hundreds of reports and interviews that fully detail and explain all of the different methods they have in place specifically designed to showcase and encourage their employee owners. Employees are not only encouraged to participate at every level of the organization, but managers are constantly rewarding the entire team with things like barbecue’s on company property while employees are still on the clock. Beer tasting is not only encouraged, but required by the staff and that is a great way of not only saying thank you, you’re appreciated, but it also allows an employee to say “I made this beer today and it tastes great.” Much of the research centered around the overall efforts of NBB to become 100% sustainable allowing them to not only eliminate the need for outside resources, but they also desire to be able to add back to the power grid and actually be more than completely self-sustaining. Although not detailed in the report above, New Belgium employees have taken recycling to the highest possible levels by no longer throwing any trash generated on the production floor away, every piece of plastic, paper or cardboard is collected, sorted and recycled properly. All of the office space staff is also taking part in this practice. Employees even take food scraps from their lunch and dinner breaks and add them into a compost pile located on the property. The compost is later used on the property as needed or donated to the community for uses throughout the community. NBB is a very community oriented organization as well, donating flat percentages of products sold to local charities and other community events and organizations. After having personally visited the brewery on several different occasions when living in Fort Collins Colorado is what drew me to further research and subsequently report on this technologically advanced company. With each visit to the brewery it became obvious employees loved their jobs, year after year the same employees would greet everyone at the door with a huge smile and always a fun and funny comment or story to tell. Every employee ever personally encountered clearly loved the job they were doing and they always had a great passion for the people, the place and most importantly; the beer. The innovations that the brewery has already made along with the ongoing upgrades and technological advancements they are making will definitely be useful and more widely used in the future as these technologies are adapted and advanced to become common place in every industry in our country. This assignment proved that a company can be socially, ethically and environmentally friendly and still become a financial power house. It is very evident that the choices New Belgium has made have them headed in the right direction; from humble beginnings in a determined man’s basement to the 8th largest and worlds most efficient brewery in just over twenty years. This assignment has helped me to look deeper into the topic, look under those things that it takes to make a company operate. New Belgium has certainly set a standard that I will personally take with me and strive in all of my future endeavors to achieve such a high standard. The incredible management styles that NBB utilizes are a proven success and a model that could effectively transform the way in which every industry is operated. Employees really are the backbone of any organization and without them no organization would be capable of success. My personal first hand experiences at New Belgium combined with the vast array of articles commending the brewery for everything they have and continue to do for the environment, local economy, community and most of all their employees, it is obvious; New Belgium has taken a new approach to business and it is working perfectly.

VII. Works Cited
Fat Tire Packaging. (2009). Brand Packaging, 43.
Averill, M. (2009, January 15). Beer of the Week. Tulsa World (OK). Tulsa, Oklahoma, United States: Rocky Mountain IPA.
Becker, J. H. (2007). Green Biz. Sierra, Vol. 92 Issue 4, p29-29, 1/3p.
Cattaneo, J., & Alexander, M. (2006). I'll Drink to That. Waste Age, p.20-21.
Gallagher, D. (2008, April 14). 3 Companies with local ties named best places to work. The WA Bellingham Herald.
JG Press, Inc. (2003). The brewery with the big green footprint. In Business, Vol. 92 Issue 4, p29-29, 1/3p.
JUICEBOX. (2010). FAQ's. Retrieved October 24, 2010, from New Belgium Brewing Company: http://www.newbelgium.com/home.aspx
M2PressWIRE. (2009). New Belgium Brewing Uses Fluensee's RFID Solution for Accurate Beer Keg Data; Colorado Brewer Benefits from Improved Keg Cycle Times and Information for Six Sigma Efforts. Denver: Newspaper Source Plus.
Motavalli, J. (Jan/Feb2002). Green Beer. E - The Environmental Magazine, Vol. 13 Issue 1, p42, 2p.
Roberts, M. (2008, April 19). Take this job and love it. (K. Snow, Interviewer) Web-sites http://www.newbelgium.com/home.aspx http://www.newbelgium.com/culture/alternatively_empowered.aspx http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?casestudyid=4000004734 http://www.terrain.org/articles/9/wann.htm http://indigoproject.squarespace.com/new-belgium-brewing/ http://www.highbeam.com/doc/1G1-197700388.html

On-line magazines http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=919332 http://www.elephantjournal.com/2009/01/behind-the-scenes-at-new-belgium-brewing-elephant-journal-hops-into-one-of-americas-best-breweries/ http://www.thegoodhuman.com/2009/10/29/new-belgium-brewery-wind-powered-employee-owned/ PDF file from a web-site http://files.harc.edu/Sites/GulfCoastCHP/CaseStudies/FortCollinsCOBelgiumBrewery.pdf http://www.e-businessethics.com/NewBelgiumCases/NewBelgiumBrewingCase.pdf