Beer drinkers buzzing over Founders Brewing debut in Sonoma County

The North Coast beer market is one of the most competitive in the world. It takes a lot to crack the market, where two-dozen local craft brewers - many of which are among the best in the country - are well represented in supermarket shelves and barrooms.

Add in the Big Three of Budweiser, Miller and Coors, along with imports, especially Mexican beer, and it is even harder to get a new beer in front of consumers.

But that’s what Founders Brewing Co. of Grand Rapids, Mich., did last month when it began selling its beer in Northern California and Nevada, creating a buzz that is rarely achieved by an outsider in the North Bay beer market. After all, this is a place where people will wait hours in line to taste Russian River Brewing Co.’s Pliny the Younger every February in downtown Santa Rosa.

“People are excited. Definitely, there’s a psychology; people want what they can’t get,” said Zach Shelton, the beer buyer at Bottle Barn in Santa Rosa.

Bottle Barn quickly ran out of Founder’s most coveted brew, Kentucky Breakfast Stout, which is brewed with coffee and chocolate and aged in oak bourbon barrels. Until last month, most local consumers could only get the beer - known by its acronym KBS - through trading beers via mail with those in states where Founders was sold.

“They are making a big splash. It will be one that consistently sells,” Shelton said.

Founders’ expansion is significant as many in the craft-beer sector believe the number of local brewers in Sonoma County could easily double in the future, given the overall growth in the industry. Craft beer production increased 18 percent, by volume, in the United States last year.

But more competition, especially from highly regarded out-of-state craft brewers, will make it increasingly difficult to get shelf space or a handle on a barroom tap. Approximately 41 percent of the beer sold in California comes from out of state, according to an analysis of state tax records by industry consultant Jon Moramarco. Much of that is from beers such as Pabst Blue Ribbon, Sam Adams and Yuengling as both Anheuser-Busch InBev and SABMiller have plants in the state.

Moramarco noted the beer industry is becoming more like the wine industry with fierce competition across the nation and world. And those beer consumers are looking increasingly for something new, vendors said.

“I won’t say they are getting bored with some beer ... but people are wanting to try something new,” said Mickey Head, chief operating officer of Eagle Distributing Co. in Santa Rosa, which distributes Founders in the North Bay. Head noted last week that he already had to place an “emergency order” with Founders to keep up with the demand, especially KBS.

Even though it is competitive, the North Coast market was ripe for Founders given the sophistication of the region’s beer consumers who place a premium on quality, said Dave Engbers, who co-founded the company in 1997 with Mike Stevens.

“I think Founders does really well in really mature markets,” Engbers said. “You have done such a good job of developing the craft beer community out there.”

The company, which has 300 employees and is on pace to produce 275,000 barrels this year, is known for its experimentation. It was one of the first to do barrel-aging of beers on a large scale. It also worked more than three years to craft All Day IPA, a less alcohol-potent India pale ale, which is now more than 50 percent of its volume. It spawned a category dubbed “session IPAs,” which have picked up a tremendous following in the craft market.

“We didn’t get into this industry for the buzz factor,” Engbers said of the drive for lower-alcohol brews.

Founders also grew organically as it moved into 37 states by continually expanding its Michigan plant, which sources water from Lake Michigan and just recently underwent its sixth expansion. Others, such as Lagunitas Brewing Co. in Petaluma and Sierra Nevada Brewing in Chico, have decided to build regional plants across the country.

Its growth has been helped by a 30 percent investment last year by Mahou San Miguel, a Spanish family-owned brewer.

“As our growth in the states starts slowing down, we are looking for our next adventure,” Engbers said of international expansion.

Founders has been eyeing the West Coast for some time, but it needed to have enough production capacity to support the expansion.

“The last thing we would want is to open up in California and then have people run out of product,” he said. “Any time a wholesaler is out of stock, it’s not good.”

For Northern California, Founders sent out staff months before its launch to work on logistics and finalize distribution, Engbers said. So far, the results have been good as Head noted that it is already available in supermarket chains such as Safeway, which typically are the last to receive such craft beers in distribution.

The excitement was evident when Founders held an event at Brew in Santa Rosa on Oct. 1, the first day it was available in California. Brew had five Founders beers on tap and sold KBS in bottles. Many of the customers were originally from the Midwest along with beer aficionados who have read about its beers on forums such as ratebeer.com and beeradvocate.com.

“It was a really great turnout. People were really excited,” said co-owner Jessica Borrayo.

Founders has other such tap takeovers planned. It has an advantage of offering up to eight different labels for consumption, a wide variety which is very unusual for a craft brewer, said Head.

“This one is going to be a big one,” he said.

You can reach Staff Writer Bill Swindell at 521-5223 or bill.swindell@pressdemocrat.com. On Twitter @BillSwindell.