Tuesday 19 September 2017
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Lagunitas is one of California’s largest and best-established craft breweries, even if it isn’t yet exactly a household name on this side of the pond. Founded in 1993 by musician and (then) amateur brewer Tony Magee, Lagunitas makes America’s best-selling IPA, which today spear heads a range of beers from the iconic to the downright weird.
A Chicago native, Tony originally moved to California for a job in printing, and was first inspired to take up home brewing by his younger brother, who worked in a brewpub in Portland. Upon returning home he immediately bought a small homebrew setup and went about brewing his first beer. His first attempt was amazing, his second a complete flop, but Tony was hooked and had reached an important conclusion: that brewing was just like his beloved music, and that perfecting the craft would be just like learning an instrument.
So he spent the next eight months doing very little but brewing; honing and refining his technique, and getting a feel for how the ingredients and processes behaved. At the end of this intensive learning curve, in 1993, he opened the tiny Lagunitas Brewing Company in the Californian town from which it takes its name.
One of the first beers Tony brewed was his now-famous IPA. Back in the early 90s, the style still hadn’t really taken off, and as Tony’s sister and Lagunitas’ Director of Communication Karen Hamilton recalls, it wasn’t always an easy pitch.
“I was in sales at the time,” Karen says. “The IPA was our very first seasonal and Tony said ‘I think there’s a future to this kind of beer’. I remember going out and selling into new markets, and telling people we wanted them to lead with the IPA. I had so many of them say ‘oh, no – we want to go in with your maltier beer. That’s what people want’.
It was real hand-to-hand combat! When IPA as a category began to take off though, we were already in it so we rose too.” This is something of an understatement, as Lagunitas began to grow rapidly, requiring first a move to new brewing premises in Petaluma, California, then to a larger site across the road. Over the following years, Lagunitas took over the adjacent buildings and farmland to accommodate new kit, even raising the roof of its main building to make room for tall new vessels, taking it to its current 250-barrel and 80-barrel brewhouses.
This kept things ticking along until 2012, when the brewery’s USA-wide distribution and growing business in Europe prompted Tony to step back and take a creative look at how things could be done differently. “He worked out how much we were spending each month on sending trucks from the west coast to the east, and just as an experiment put that figure into a mortgage calculator,” says Karen. “It was enough to build a whole new brewery, so suddenly the question was ‘do we pay for shipping or do we build another brewery?’ Tony wrote the figures on the back of an envelope and showed it to our CFO, who said ‘oh my God’. The banks agreed to lend us the money very quickly, Tony found a great
site and went straight onto Twitter to announce we were building a brewery in Chicago.”
The new brewery boasts two 250-barrel brewhouses and, while a lot more “urban” that Lagunitas’s pastoral Californian home, retains the cultural values that make the original brewery such a cool (and successful) place. During our visit to Lagunitas in California, which we’ll cover in full in Ferment #20, there was a palpable sense of fun, even mischief, everywhere we looked. Unless this was all orchestrated for our benefit, like a giant beery Truman Show, this culture seemed completely genuine and utterly organic.
We don't suddenly have a load of big beer money at our disposal
Which brings us to the macro elephant in the room. As many readers will already be aware, Lagunitas was acquired in its entirety earlier this year by Heineken (which had owned a 50% stake since 2015), prompting much wailing and gnashing of teeth, not just among the brewery’s fans, but also those keen to prophesy dark days for the entire craft movement.
It’s easy to see why Heineken would be interested in Lagunitas. It’s a cool brand making great beers, highly professional with a proven track record in handling rapid growth. Heineken also gets Tony himself, who has been tapped to oversee all the giant’s smaller craft brands. But what does this mean for Lagunitas? What’s the upside to getting into bed with Big Beer?
Karen’s answer is swift and honest: distribution.
“It’s a route to market in the rest of the world,” she says. “It has nothing to do with the US, and nothing has changed or will change in the way the brewery is run. We don’t suddenly have a load of big beer money at our disposal, we still have to chew our own food; the message from Heineken has always been ‘keep doing what you’re doing’ and we’ll help you grow by reaching new markets’.”
There’s certainly a valid debate around whether all such deals are good news for beer lovers, or whether they raise barriers to entry for new small breweries looking to emulate Lagunitas’s success. In this particular case though, it’s hard to feel any animosity toward Lagunitas just because they’ve been successful – they still seem to be making good beer for the right reasons and working hard to keep that up.
“Tastes change and fashions change, and I think one of the reasons we’ve bucked every downward blip in the beer market is that we’ve listened to what people want and keep evolving,” concludes Karen. “As well as our year- round beers, we have limited editions which are a bit more experimental, but also a constant stream of ‘one-hitters’ which are very limited and rarely make it beyond our taprooms. Tony started out in brewing as a creative expression and that’s exactly what still drives us today. It’s been the source of our success, so that’s exactly how we’re going to carry on.”
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