Reference no: EM131461679

Question: New Belgium Brewing (NBB), America's first wind-powered brewery, aims to make both a better beer and a better society. Founded by husband-and-wife entrepreneurs Jeff Lebesch and Kim Jordan, the company offers European-style beers under intriguing brands such as Fat Tire and Sunshine Wheat. Lebesch hatched the idea for brewing his own beers after sipping local beers while touring Belgium on bicycle. Returning home with a special yeast strain, Lebesch experimented in his basement and came up with a beer he dubbed Fat Tire Amber Ale in honor of his bicycle trip.

By 1991, he and his wife were bottling and delivering five Belgian-style beers to liquor stores and other retailers in and around their hometown of Fort Collins, Colorado. Within a few years, sales had grown so rapidly that NBB needed much more space. Lebesch and Jordan moved the operation into a former railroad depot and then moved again into a new state-of-the-art brewery.
Not only is the 80,000-square-foot facility highly automated for efficiency, but it is also designed with the environment in mind. For example, sun tubes bring daylight to areas that lack windows, which reduces the brewery's energy requirements. As another energy-saving example, the brewery's kettles have steam condensers to capture and reuse hot water again and again. The biggest energy-conservation measure is a special cooling device that reduces the need for air conditioning in warm weather. In the office section, NBB employees reuse and recycle paper and as many other supplies as possible.

Soon after opening the new brewery, the entire staff voted to convert it to wind power, which is kinder to the environment because it does not pollute or require scarce fossil fuels. In addition to saving energy and natural resources, NBB is actually transforming the methane from its waste stream into energy through the process of cogeneration. It also has found ways to cut carbon dioxide emissions and reuse brewing by-products as cattle feed. Going further, NBB donates $1 to charitable causes for every barrel of beer it sells-which translates into more than $200,000 per year. Moreover, it donates the proceeds of its annual Tour de Fat biking event to nonprofit bicycling organizations.
Employee involvement is a key element of NBB's success. Lebesch and Jordan have unleashed the entrepreneurial spirit of the workforce through employee ownership. Employees share in decisions, serve as taste testers, and receive detailed information about NBB's financial performance, including costs and profits. Being empowered as part owners not only motivates employees, but it also gives them a great sense of pride in their work. And reminiscent of the bicycle trip that prompted Lebesch to brew his own beers, all employees receive a cruising bicycle on their first anniversary of joining the company.

Still, customers are most concerned with the taste of NBB's beers, which have won numerous awards and have attracted a large, loyal customer base in twelve states. In the last five years, Fat Tire's annual sales have grown from 0.9 million cases to 2.6 million cases. Many people become customers after hearing about the beer from long-time fans, and as its popularity grows, the word spreads even further. NBB does some advertising, but its budget is tiny compared with deep-pocketed rivals such as Anheuser-Busch and Miller Brewing. Instead of glitzy commercials on national television, NBB uses a low-key approach to show customers that the company is comprised of "real people making real beer."

Today, the company employs 140 people and is the sixth largest company selling draft beer in America. Clearly, sales and profits are vital ingredients in NBB's long-term recipe, but they are not the only important elements. Jordan stresses that the company is not just about making beer-it is about creating what she calls "magic." Reflecting on her continued involvement in NBB, she says: "How do you support a community of people? How do you show up in the larger community? How do you strive to be a business role model? That's the part that keeps me really engaged here." In fact, NBB has integrated social responsibility into its operations so successfully that it recently received an award from Business Ethics magazine. The award cited the company's "dedication to environmental excellence in every part of its innovative brewing process." Jordan, Lebesch, and all the NBB employee-owners can take pride in their efforts to build a better society as well as a better beer.17 For more information about this company, go to www

1. What do you think Kim Jordan means when she talks about how New Belgium Brewing strives to be a "business role model," not just a beer maker?

2. Given New Belgium Brewing's emphasis on social responsibility, what would you suggest the company look at when preparing a social audit?

3. Should businesses charge more for products that are produced using more costly but environmentally friendly methods such as wind power? Should consumers pay more for products that are not produced using environmentally friendly methods because of the potential for costly environmental damage? Explain your answers.