Sierra Nevada Brewing Co.: End of Incentives

Document Type

Article

Department or Administrative Unit

Management

Publication Date

12-2011

Abstract

In May 2008, Ken Grossman, the founder, owner, and CEO of Sierra Nevada Brewing Co. (SNBC) faced a dilemma: whether or not to complete a solar power installation at its facility in Chico, California. From the beginning, Grossman had made a commitment to make environmental sustainability part of the strategic plan and the overriding cultural norm of his organization. In line with this commitment, Sierra Nevada had undertaken the creation of a five-phase solar installation. When the project began, the company knew that the federal government and state of California would provide tax and other incentives that would save the company a substantial amount of money on the installation. However, with four of the five phases completed, SNBC had reached the cap of these incentives, and California had denied a request for an extension. Incentives provided during the first four phases of the installation had yielded fairly rapid returns. Now, however, without the state incentives, finishing the solar installation would be costly, and time to payback would be anywhere between ten and twenty years. As the sole owner of the privately-held craft brewery, Grossman had the final say in this matter, but he sought out the advice of his CFO, Bill Bales, as the firm's financial expert. Should the company complete the project? Grossman asked Bales.

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This article was originally published in Case Research Journal.

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Case Research Journal

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