Bear Republic Brewing Company Inc.
Issue Fall 14
When the family owned Bear Republic Brewing Company opened in 1996, there was nary a bank in sight willing to take a chance on a microbrewery. “Microbrewing” was a term familiar only to those already in the know.
“In the beginning when we were looking to expand there were several ways to do that,” explains Richard Norgrove, Sr., co-owner of the company along with his son who had the idea to start Bear Republic Brewing Company along with their wives. “One way was to borrow money and the other was to reinvest. So our strategy was to reinvest and one of the reasons was because it was difficult to get lending institutions on board. No one knew what a microbrewery was.”
And that’s not just limited to the financial institutions. Not only did Bear Republic have to fund itself, it self-distributed its products because in 1996 there were no craft beer distributors. As the industry has grown, however, Norgrove says it’s impossible to ignore.
“Once the industry took off, you see other professions who realized this is an industry they should get involved in,” Norgrove says. “There are more and more events and you see more participants from the equipment side and the finance side that recognize it’s a growing industry. Then you have the Safeways and BevMos and all the independent stores that recognize they need more shelf space for craft beer.”
Over the past 18 years, Bear Republic Brewing Company has learned just how well a good craft brew does sell. The company’s 16 draft brews and 10 bottled brews available in 35 states and seven countries have won several awards, including 19 medals from the Great American Beer Festival®. Most recently, Bear Republic’s Grand-Am™ took home a 2013 Gold Medal in the American Pale Ale Category at the California State Fair Craft Beer Competition, and its Café Racer 15™ was honored in the beer category at the 2014 Good Food Awards™, a celebration honoring those who exemplify excellence in both taste and responsible production.
The awards signal a company that is still on the rise. In its earlier days, the company grew 30 to 40 percent some years. Norgrove says that although growing is good, growing too fast does pose its own set of issues. Today, the family has set out a three to five year plan to grow at 15 percent each year and to top out at 300,000 barrels a year. One of its most recent investments to ensure its growth involved a unique partnership between Bear Republic Brewing Company and the city of Cloverdale, Calif., where it operates.
Going to the Well
In 2012, Bear Republic went to the city to get approval permits to expand its capacity since the city needs to ensure that it has resources available to support company growth. However, Cloverdale denied the request on account of the city’s limited water capacity. Without an additional well, the city could not continue to support the public’s water needs as well as Bear Republic’s growth. The family, which has lived in Sonoma County for five generations, decided to invest in the city and itself.
“It took nine months between our attorney and the city attorney to put together a public-private agreement that allowed us to invest close to half-a-million dollars to construct and bring online two wells,” Norgrove explains. “In that agreement, we are using our money to bring the wells online. It started producing July 1 of this year and in that agreement we were able to work out water commitments for the next four years, which means we have prepaid for the water credits rather than paying as we go. In essence, we invested in the city because the public benefits from the additional water, too, and it allowed us to stick around in Cloverdale.”
It was a bold decision, but Norgrove encourages other growing breweries to make the same in their own communities. The cities can benefit and local employees are comforted by the job security that comes from working at a company invested in its community.
Further anchoring itself to Cloverdale, Bear Republic purchased 1.5 acres adjacent to the company last December. The company will develop the greenfield site over the next three years to expand its capacity.
As the company grows, it has vowed to do so responsibly. It recently invested in an internal wastewater treatment system called the EcoVolt System to treat effluent from the brewing process. The system will allow Bear Republic to treat and reuse portions of the wastewater for wash down activities. It will also extract the pure methane gas that comes out of its production process and recycle it back as a source of power. The company is installing photovoltaic panels to provide itself with clean energy.
“We know that we have to make money to continue to grow, but not every decision is about the almighty dollar,” Norgrove says. “It’s about the future and investing in a healthy business, clean water, employees and responsible production. Those are things companies should be doing. Not everything is cost-effective in the short term, but in the long term it makes the difference of being around 10, 20 or 30 years. It provides job security for employees and lets them know the goal is not to build business and sell it, but to provide future enterprise.”