E-Malt.com News article: US, Colorado: Lagunitas Brewing Co. plans $14 million expansion project

Sales of Petaluma based Lagunitas Brewing Co. craft beer grew 40 percent last year from 2009 accelerating to 67 percent in the first half of this year over the same period of 2010. In the same time, a massive production expansion project in progress is itself swelling by nearly 50 percent just to keep pace with sales, North Bay Business Journal reported on July, 18.

The brewery has come a long way from stovetop recipes in a west Marin County hamlet almost two decades ago to a on track for $40 million in sales this year and production approaching 1 million barrels annually in the next few years. Lagunitas moved to No. 17 among U.S. craft breweries based on 2010 volume sales from No. 23 for 2009 sales, according to Boulder, Colorado-based Brewers Association’s annual top 50 list.

“We’re in growth mode,” said founder and owner Tony Magee.

This year, Lagunitas expects to make about 160,000 barrels, including seven India pale and other ales as well as a lone lager plus eight seasonal suds. Trucks roll from the 40,000-square-foot brewery in a northeast Petaluma business park to markets in 35 states. For example, four trucks a week leaving for Manhattan and five for Chicago.

The brewery produced the equivalent of 106,000 31-gallon beer barrels in 2010.

A $9.5 million project this summer is expanding annual production capacity to 600,000 31-gallon barrels with the addition of a 250-barrel brewhouse, which is basically a large kettle, and a higher-speed bottling line. Just two years ago, Lagunitas invested $2.5 million in an automated 80-barrel brewhouse plus tanks and other equipment that were supposed to allow production to grow to a plateau of 250,000 barrels over several years.

The existing brewhouse capacity will be kept in reserve for growth, according to Mr. Magee.

“It’s kind of scary stepping up that far,” he said about the current expansion, which he now thinks will be a $14 million project to fully accommodate growth. “I think we’ll grow into it in an orderly way in the next few years.”

Lagunitas Brewing Company started in 1993 in Mr. Magee’s home, at the time in Lagunitas, a community 10 miles northwest of San Rafael. The operation quickly shifted to the adjacent village of Forest Knolls, located on the Sir Francis Drake thoroughfare to the coast.

“We’re trying to find variety in the four components — malt, yeast, hops and barley — that make up beer,” Mr. Magee said. “That independence of thought, that independence of spirit shows up in the brand.”

In the early days of the brewery, distribution primarily was along Highway 1 on the North Coast. To provide stable income, Lagunitas started producing private-label beers for renowned stops along the route such as Stinson Beach Grill, Sand Dollar Restaurant and Olema Farmhouse Restaurant & Bar.

The brewery stayed in Forest Knolls only eight months, at which time a septic system backup and neighbor complaints prompted the county of Marin to tell the 20-employee operation to go. The brewery then moved to Petaluma.

In 1998, it relocated to its current location, adding a tasting room and beer garden two years ago.


20 July, 2011