Lagunitas Brewing Company tasting success
By SEAN SCULLY
THE PRESS DEMOCRAT
For a guy responsible for the creation of more than 14 million gallons of beer last year, Tony Magee seems curiously resistant to calling himself a brewer.
“I don’t think we’re in the beer business … we’re in the tribe-building business,” he said, standing among towering stacks of bottles ready to be filled in his warehouse at Lagunitas Brewing Company in Petaluma. “Beer just happens to be the common currency” of the would-be members of the tribe.
In this case, he’s building the tribe of craft brew fans who enjoy the beer and the quirky, iconoclastic sensibility of his 20-year-old Lagunitas Brewing. That tribe has underwritten an astonishing burst of growth that has propelled the business from a struggling local bit player to a nationally-known brewery on the cusp of full nationwide distribution.
Two years ago, his brewery, in a quiet industrial park on North McDowell Boulevard, was producing 161,000 barrels of beer, or around 5 million gallons, placing him a modest No. 17 on the Brewers Association annual list of craft brewers for 2011. A blast of growth brought that total to 254,000 barrels last year, enough to vault Lagunitas 11 places to No. 6 in 2012. It could pump out as much as 480,000 barrels this year, during which he expects to hire his 350th employee, a growth of about 100 in just 12 months. The expansion is almost certain to push the brewery even higher on the 2013 list.
And it’s hardly finished. Even as he continues to add equipment in Petaluma, Magee is preparing to join the rarified ranks of brewers with production facilities in multiple states, opening an outpost in Chicago this summer. The new brewery will start at about 300,000 barrels but eventually could produce 1.7 million, in addition to the 520,000 barrels from Petaluma when the current expansion is complete. The beer already is distributed in 34 states and the Chicago facility will allow Magee to spread to the rest in just a few years.
“I don’t know how big the company can be … The way it is is fabulously exciting, but we’re also growing this year at a 72 percent rate year-to-date,” he said. “I don’t know; there is something irrational about that, but yet it’s true.”
Lagunitas has staked out a reputation as quirky and irreverent, with a let-it-all-hang-out ethos including colorful and cheeky labels and promotional material drawn by Magee himself, featuring dogs, circus performers and burlesque dancers.
He dubs brews with self-deprecating names such as “Lagunitas Sucks,” a highly-hopped seasonal beer originally brewed as an apologetic substitute for the popular annual offering “Brown Shugga,” which the company couldn’t manage to get out on time one year.
“The packaging is unique in a lot of ways; it’s designed for intelligent people,” said Ron Lindenbusch, longtime Lagunitas marketing director. (In Lagunitas’ slightly twisted world, the title on his business card is “Beer Weasel,” while Magee’s cards often say “Imperial Warlord.”)
Another beer got the name “Censored” after federal authorities turned down the original name — “Kronik” — saying it was a reference to a popular slang term for marijuana.
Yet another beer commemorates a darker chapter in the brewery’s history: a 20-day shutdown by state alcohol officials in 2006 after undercover agents observed widespread marijuana smoking at the company’s weekly open houses in the days before the public taproom was built. Magee turned that into “Undercover Investigation Shutdown Ale,” a seasonal beer that the brewery describes as “especially bitter … unforgiven … unrepentant.”
“I really do not want the press and beer geeks and chat rooms to tell that story for me,” Magee said, cheerfully admitting that marijuana was once a major part of the corporate culture. “I’ll just tell it myself so that we own it.”
And that’s where “tribe building” enters the picture.
“Another way to put it is story-telling,” Magee said. “A tribe gets built around stories, commonly-held stories that everybody agrees on … we want to tell our story” through the beers.
The success of Lagunitas comes amid an explosion of competition, with nearly 2,400 small breweries operating in the United States today, on top of traditional behemoths such as Anheuser-Busch and MillerCoors.
For all the hectic growth at Lagunitas, Magee is a relatively little-known figure, even within the tight-knit community of brewers.
“For a few years, he’s been something of a mystery man,” said Paul Gatza, executive director of the Brewers Association, a trade association of smaller brewers. “People in the industry didn’t know him really well.”
Magee admits he has little use for the chummy world of brewers, with its conferences, festivals and collaborative beers co-created by multiple breweries.
“If you’re hanging around with the crowd, you’re going to end up making the same beers, thinking you’re all special,” he said. “Me? There is something I like about the idea of taking chances.”
Magee, 52, was born and raised in Chicago, where he studied at New Bauhaus Institute of Design. He eventually dropped out to perform in a Chicago-based reggae band (he remains an avid musician today) and he held a series of menial jobs, none terribly successful, in his retelling.
He moved to California in 1987 looking for what he has described as a “new start,” and tried to apply his art and design training as a printer in the North Bay.
That business, too, was struggling in the 1990s when his brother gave him a home-brewing kit. He soon was hooked.
His wife, Carrisa Brader, quickly evicted him from their kitchen, where he was creating a considerable mess. So despite owing tens of thousands of dollars in back taxes to the state and federal governments, he begged and borrowed enough money to buy a tiny professional brewing setup and opened Lagunitas in Marin County in 1993. He quickly outgrew the septic system on the site and began searching for new locations, settling eventually on Petaluma.
The development of the brewery, outlined in his 2012 book, “Lagunitas Brewing Company: The Story,” seems to consist of a manic quest for growth while frantically trying to hold off suppliers, bankers and tax collectors, all eager for repayment of late bills.
He writes of the first 10 or 12 years of the brewery’s life as “like being chased down the street by a pack of wild dogs.”
Brader, who now heads production and logistics for the brewery (her business cards say “Prime Minister” or “The Plant Lady,” a play on words referring both to her job and to her love of the plants in the office), credits her husband’s tenacity and sprawling intellect for getting Lagunitas through those years.
“He just has this amazing ability to learn anything he needs to learn,” she said. “When you’re starting a business, you have to wear a lot of hats. You have to wear all of them, in fact.”
As the business has stabilized, she said, he has shown a talent for bringing in the right people who have more formal business education to build the brand.
The people he attracts “are independent thinkers, but they get what the brand is about,” so they don’t need close supervision from the top, she said.
Magee expects to generate about $90 million in revenue this year and he says all of those old debts are long-since retired.
“People are like ‘how did you do it?’ and I say, ‘I’m not sure,’” he said. “You try to put it out there, put it in a way that’s honest, not the way people think you should or the way you think people expect it to happen. And you find your own voice, you know?”
Magee credits some of his success to being able to spot future trends early. His flagship India Pale Ale, for example, came out in 1994, a time when the style was in the shadow of the milder pale ales made famous by Sierra Nevada Brewing in Chico. While others dispute his claim to have pioneered the highly-hopped West Coast version of the IPA, he clearly was one of the first craft brewers to make it the centerpiece of his lineup.
The meteoric rise of Lagunitas has come at a price. The city of Petaluma has struggled to digest the burgeoning business, which has outgrown the city’s four-year-old sewage treatment plant. Magee has to truck his nutrient-rich brewing wastewater to Oakland for disposal.
City and county officials, however, say the benefits outweigh the growing pains. Not only is the business generating tax revenue and jobs, it is drawing new business to the area. Two smaller breweries are opening within a few hundred yards of Lagunitas, with several more in the works in other parts of the city, said Ingrid Alverde, economic development manager for the city.
The brewery, along with a few nationally-known competitors in the area, including Bear Republic Brewing in Healdsburg and Cloverdale and Russian River Brewing in Santa Rosa, are drawing new beer-loving tourists to the area, said Ben Stone, executive director of the Sonoma County Economic Development Board.
The board is preparing to release a detailed report next month on the effect that the growing local beer market is having on the economy.
The dizzying expansion of Lagunitas also has forced the previously low-profile Magee out of the shadows. The process hasn’t always been smooth.
The blunt-spoken Magee, who peppers his conversations with casual profanities that are hard to reproduce in a newspaper, has riled up the beer world by pointedly criticizing several of his fellow brewers, often delivering his broadsides on his stream-of-consciousness Twitter feed.
Among other dustups, he has criticized No. 3 brewer New Belgium Brewing of Colorado for taking public financing to build a second brewery in North Carolina, funding he turned down in his Chicago expansion. He attacked the popular trend of putting high-end craft beer in cans, saying the mining practices necessary to produce the aluminum are harmful to the environment. He mocked a new beer glass co-designed by Delaware-based Dogfish Head Craft Brewery and Sierra Nevada, comparing its shape to a sex toy.
He’s locked horns with the Brewers Association, criticizing its decision to change the definition of “craft brewery,” raising the annual production limit from 2 million barrels to 6 million, a move widely seen as a way of keeping Boston Brewing Company, makers of the Sam Adams line of beers, within the ranks of “craft brew” as it expands.
“Jim Koch is NOT a craft brewer, nope,” Magee wrote on his Twitter feed in late 2011, referring to the high-profile founder of the Boston Brewing Company.
He’s also been vocal in opposing a bill pushed by the Brewers Association to slash federal excise taxes on beer, saying now is the wrong time to be taking tax money away from governments to give to well-off brewers.
“He’s a loose cannon,” said Larry Bell, head of Bell’s Brewery of Kalamazoo, Mich., the No. 7 brewer on the list last year, who has joined Magee in opposing the excise tax bill. “Tony says what he thinks, even if that goes against the mainstream.”
Other major brewery owners, including Koch and Sierra Nevada’s Ken Grossman did not return calls for comment on Magee.
New Belgium CEO Kim Jordan defended the tax incentives, saying it was an appropriate way to help reduce the risk of the huge investment in a new brewery while guaranteeing economic benefits to the city of Asheville, N.C. She declined, however, to respond pointedly to Magee’s criticism.
“Life is too short,” she said. “It’s up to us to make it sweet.”
Magee admits that he has a tendency to speak his mind, but he says he never intended to challenge or attack his fellow brewers.
Citing Ernest Hemingway’s oft-quoted line about his whole career being an effort to write just “one true line,” Magee said he is “just trying to find ways to say one true thing, through the beer, through the business.”
Not to say that he enjoyed the controversy. He compared the reaction to some of his comments to “having someone just tie you up to a stick and throw rocks at you.”
After several widely-reported Twitter controversies in the past two years, he says he’s become more guarded in his personal comments in recent months, fearing that it might reflect badly on the larger company, “because what you say has a megaphone on it” now that the brewery is so large.
Closer to home, Magee’s reputation is less contentious. Since its founding, Lagunitas has made a policy of supporting local charities, usually in the form of free beer or use of the brewery’s space for events.
“If you’ve ever gone to a fundraiser or political event in the last 20 years, you’ve probably drunk some of Tony’s free beer,” said Marin County Supervisor Steve Kinsey, who has known Magee since the early days of the brewery and recently supported him in his successful effort to get permits to build a small hop farm and distillery near his home overlooking Tomales Bay.
Although he turns down offers to join charitable boards and rarely gives cash donations, Magee has made a policy of giving nonprofit groups free access to his brewery at times it is closed to the public.
“It’s very simple: You live in a community and you need to participate in it,” he said. “Hell, you want to participate in it. You get to know people, they get to know you and the beer.”
Although Magee also opens his doors to political fundraising events, he is stridently apolitical, to the point that he says he has not cast a vote in an election in his life.
“Does that make me a bad guy?” he asked with a laugh.
He said the brewery gives away hundreds of kegs per month to worthy causes, and more cases of bottled beer, but he doesn’t keep track of the number.
Petaluma Mayor David Glass said the Lagunitas name is so ubiquitous at charity events and city festivals that “I am at the point that I am looking to see if the logo is missing from anything. And it’s not.”
Trying to maintain that sense of community is important as the business grows, to help maintain its soul, said Don Chartier, events coordinator at the brewery (“Mr. Nice Guy” on his business card).
“As big as we get, you push back against that corporate attitude and structure,” Chartier said. “But as long as Tony’s in charge, it’s not going to have that.”
Magee agrees. He said he has no intention of ever selling the brewery and he is working on grooming a new generation of leaders who can replace him eventually and carry on his quirky and stubbornly independent legacy, no matter how big the brewery may grow.
“I think we could be as big as Coors. I think we could be as big as Anheuser-Busch,” adding a shrug and an unprintable expletive. “It’s just a matter of being sure we’re in tune with people, that we’re recognizable and authentic and resonate.”
No matter how large he grows, he said, his guiding philosophy will remain the same as when he was struggling to put out 500 barrels of beer a year.
“If people like what we’re doing, they will drink it,” he said. “And if they drink it, I will replace that one so they can drink it again.”
(You can reach Staff Writer Sean Scully at 521-5313 or email@example.com.)