The company’s passionate, loyal fans resonate with the New Belgium brand, which has become synonymous with its core values of environmental stewardship, creating authentic relationships, and having fun. The brewery is consistently recognized as one of the best places to work and as one of the most democratic workplaces in the US and, as a result, it enjoys an employee retention rate of 95%.
Meghan French Dunbar: How did the sustainability program at New Belgium get started?
Katie Wallace: New Belgium is twenty-three years old and when our co-founders started the company in the basement of their house, they took a hike out to Rocky Mountain National Park and they defined their core values and beliefs. They said, “Here is the list of things that we think are important to live by and we don’t think that businesses should operate by a different set of moral guidelines than human beings do.” That was the beginning of our core values and beliefs. They included environmental stewardship, honoring nature at every turn as a business, being a business role model both socially and environmentally, creating jobs, having relationships with one another, and having fun. I would say we are lucky to have founders that, since day one, have really cared about the impact that we have on people and the planet through our business efforts.
Sustainability and human well-being have always been a part of the decision making at New Belgium. In our early years, they were just what our founders brought to the table, but there was no formalized process around those values. However, in 2007, we gathered a group of seventeen co-workers from different areas of the brewery so that we had all the areas of the business represented and we had a couple of consultants come in and we formalized what we now call our Sustainability Management System.
We asked ourselves the questions, “What are the big issues facing the world today? How does the brewing industry negatively contribute to those issues? How can we, as New Belgium, start to turn that around and influence change?” We came up with categories like reducing water usage (because it’s the primary ingredient in our beer), reducing our greenhouse gas emissions, and reducing our waste generation. Also, advocacy is another thing that we added in there because we want our little splash to ripple. We are still a tiny company, but if we can influence beyond our own operations, then it would really make a big difference in the world. At that point, we formalized our work in sustainability and we actually started tracking our utilities. We set goals around our natural resource consumption and we put sustainability into our strategic planning framework. Before, we always kind of assumed that sustainability was a part of everything that everyone did, but now we actually had metrics and we started strategically calling out what we wanted to accomplish in these areas for the company. We really preserved the legacy so that no matter who comes on or who leaves, we have formalized our practices within the company so that they will exist after we are gone.
“I DON’T WANT TO SOUND TOO FLOWERY ABOUT THIS THOUGH, BECAUSE THE REASON WE DO ALL OF THIS IS BECAUSE IT MAKES BUSINESS SENSE.”
I would say that the root of why our founders chose to include environmental strategies from day one is because of the people that they are. Kim Jordan, our CEO and co-founder, was a social worker prior to coming to New Belgium. She has always had a strong affection for well-being and humanitarian efforts. Helping people is a really big part of her background, and she has a deep understanding of social wealth issues. Jeff Lebesch [the other co-founder] was an electrical engineer. He recently retired from the company, but he really brought us a nerdy, wonderful passion for efficiency. For him, we were not being extremely successful unless we were extremely efficient. He had a deep passion for innovation and made sure that we were really smart with our resource use.
I don’t want to sound too flowery about this though, because the reason we do all of this is because it makes business sense. There are certain motivations for getting into it and that comes from a deep place of compassion and understanding, but we wouldn’t be able to do it if we were not able to make a strong business case for it. It is just extremely smart, especially for the long-term health of our business, to make investments in sustainability, reduce our environmental impact, and enhance other’s lives.
Another example of efficiency is the cardboard divider between our bottles that we used to use in our packaging. It had been there forever and we didn’t even question it. One night, a couple of our co-workers were having non-New Belgium beer with their friends, which we often do and encourage. They noticed that there was not a cardboard divider in their twelve-pack and they thought, “We are on the packaging line every day and we use so much cardboard for those dividers. It’s a lot of waste and it is not really necessary.” They brought the project to us through our internal system for sharing ideas. We ended up testing it out and there was no additional breakage without the divider so we removed all cardboard dividers from our packaging. We saved over $780,000 last year from not purchasing cardboard dividers. It is actually well over a million dollars that we saved though, because we saved money on the factory line from the factory workers who no longer have to put the dividers in. There are so many projects like that that are win-wins and make a lot of business sense, and we really think that engaging co-workers in that creative process is a good first step of finding good projects.
“I THINK IF YOU REALLY WANT A COMPANY TO BENEFIT PEOPLE AND THE PLANET, YOU’RE GOING TO HAVE A REALLY HARD TIME IF IT’S NOT INCORPORATED INTO THE BASIC STRATEGIC PLANNING PROCESS.”
MFD: What are the most innovative things that you are doing through your sustainability program?
KW: We are engaging and accessing the creative potential of our co-workers. It is a highly collaborative process. We have different avenues where co-workers can share their ideas for improving the experience of the company. Anyone who has something to share can provide feedback.
Another thing we do is outside of our company. We are part of the project called FortZED. It is a public-private partnership with the City of Fort Collins, Colorado State University, New Belgium, and several other businesses. We got together and said, “We want to create a net zero energy district in our community and we feel like we will be more successful with that issue if we combine forces rather than trying to act alone as individual silos in this process.” We also partnered with several smart grid developers and, collectively, we were awarded a grant from the Department of Energy to demonstrate that there are solutions to managing distributed energy systems on this scale. We successfully worked together to demonstrate that it is possible to cooperate in a public and private fashion to benefit our community and reduce our environmental impact. As a part of that project, we built solar panels at the New Belgium brewery, we added more methane capture at our processed water treatment plant, and we added an additional generator to store energy from the water treatment plant. Of all the grant recipients across the country, we were the only public-private partnership and we performed the best out of all of them. I think it shows that we can do more together than we can do alone, and instead of fighting for our own pieces of the pie, a lot of cool things can happen when we come together as a community.
Third, on the innovation side, the way that we have integrated sustainability into our strategic planning is really cool. I think many companies have a set of values and they state them on a plaque at the entrance and that’s all the attention they get. When we do strategic planning, we start with our company purpose and our core values and beliefs. From that, we create our mission. From our mission, we create our annual strategic priorities. From our priorities, we create our departmental initiatives and our personal initiatives. It is a really integrative process. We also kick off our annual strategic planning with all of our co-workers coming together. We close down the brewery and we fly in everyone who works remotely and we all engage in the process. I think if you really want a company to benefit people and the planet, you’re going to have a really hard time if it’s not incorporated into the basic strategic planning process. So, right next to our financial goals, our quality goals, and our customer satisfaction goals, we have goals for creating a happy work place and reducing natural resource consumption.
We are also doing cool things with energy consumption. We have an internal electricity tax, so for every kilowatt-hour that we consume at New Belgium, we charge ourselves 2.4 cents. All of that money goes into a savings account and that is how we reserve some funds for renewable energy and energy efficiency projects. We started doing that in January 2013 and we saved enough money that we are doing two projects this year. We are improving insulation within the brewery for our ambient cooling and refrigeration for our summer beer, which will decrease a lot of energy. With the tax, we are basically accounting for the externalities that we don’t see on our electricity bills because the true cost, environmentally, of us using that electricity is not accounted for. So, we tax ourselves a little extra and then we invest that money in initiatives that help save electricity.
The Power of Co-ops: An Amazing Story About Employee Ownership
In the late 90s, we did an environmental assessment of the brewery and found out that the largest environmental impact from our operations was from coal-powered electricity. So, we called the utility that supplied the electricity to us and asked them if there was a renewable energy option available that we could buy into to help reduce our environmental impact. They said that there was a wind farm in Wyoming that we could purchase electricity from, but it would be at a premium and we would have to pay the money upfront and sign a ten-year contract. We asked them how much it would be to enable them to bring that wind power to Fort Collins and they gave us a price. We actually had that money in the bank, but we had already promised it to our co-workers as profit sharing. New Belgium is employee-owned and we have it incorporated into our mission that we will share profits with employees. Our founders didn’t want to take that money back after people had planned on getting it – it didn’t feel true to the spirit of New Belgium. So, they brought the decision to the co-workers and said, “Hey, we have the opportunity to bring wind power to Fort Collins and offset our environmental impact, but we would need this money. We have a short window to decide whether to use that money, but you should decide if we should bring the wind in.” At that point, they left the room and they let the co-workers decide whether or not they wanted to give up their profit-sharing checks. Forty-five minutes later, the co-workers’ team came out of the room and they had unanimously voted to give up their profit-sharing checks to support bringing the wind-power to our city.
It was a defining moment for us, where each person acted as an owner and everyone put their money where their mouth was and made the decision, “This is who we want to be in the world!” It was a special moment for employee ownership and for our commitment to be environmental stewards. I think at that moment, we realized that this is important to all of us and that this will always be a part of our company.