Conference goers bullish on craft beer boom

The growth of craft beer shows no sign of slowing, despite the fact that the market is crowded with more than 2,300 American breweries, more than 430 in California alone, speakers said at the first ever conference on Sonoma County's booming beer, cider and spirits industry on Tuesday.

"We have reached that tipping point; we are everywhere ... we are in big box stores, we are in baseball and football stadiums, we are in convenience stores, we are everywhere," said Tom McCormick, executive director of the California Craft Brewers Association.

Conference organizer Ben Stone, executive director of the county Economic Development Board, said he expects to see beer alone add $200 million to the county's economy this year, up from $123 million in 2012.

"We've got more jobs coming from this sector: more investment, more capital," Stone said.

There are at least 20 breweries in Sonoma County, which has emerged as the Northern California powerhouse for beer production. It is home to three internationally known breweries: Russian River in Santa Rosa, Bear Republic in Healdsburg and Cloverdale, and Lagunitas in Petaluma.

While there are many well-regarded smaller breweries in the county, by far the bulk of county's beer industry is the result of the explosive growth of Lagunitas, which has nearly tripled its production in the past three years, and is planning to open a second, even larger brewery in Chicago by the end of the year.

Lagunitas founder Tony Magee, just back from six frantic weeks installing equipment at the Chicago facility, told the conference that a small band of rag-tag brewers "has overturned multibillion dollar industries" and is now in a position to challenge the powerhouse mass market brewers, particularly Anheuser-Busch InBev and MillerCoors, which dominate the world beer market.

The current era, he said, is much like the 19th century, when the men who founded those breweries, such as Adolph Coors and August Anheuser Busch Sr. were alive and carefully nurturing their new companies.

"They knew how to say thank you to their customers in a very special way," he said. "That's happening again today" with the new crop of craft brewers.

The conference drew more than 300 people from around the region, including brewers, financiers, equipment vendors and attorneys. It also focused on the smaller but rapidly growing trade in artisan cider and liquor production. There are at least four distilleries and five cideries in Sonoma County, far more than any other area county.

That concentration of craft beverage companies opens a lucrative market for Sonoma County as a tourist destination, potentially putting other craft beverages on par with the county's famous wine industry. The beverage industry taps into the same entrepreneurial, small-scale spirit that has powered other artisan industries, such as cheese making, said Tim Zahner, chief marketing officer for Sonoma County Tourism.

Tourists "want a sense of discovery," he said. "They like to learn something new. Most importantly, they want a story."

Conference speakers also dismissed speculation, common in the craft beer world, that the country might be reaching a saturation point, or that there might be a crash like there was in the late 1990s, which led to a rash of bankrupt breweries.

Lenders and financial experts at the conference said investors remain bullish on the industry, suggesting that they seen even more room to grow.

Pioneers such as Lagunitas and Bear Republic "have managed to legitimize the business, and legitimize the business model," said CPA Ken Dansie, who has several craft brewers as clients, including Lagunitas.

Magee said consumer tastes have changed irrevocably, setting the stage for the eventual market dominance by craft brewers.

"I think it's pretty much changed forever," he said. "What's going on is awfully, awfully huge ... I have a feeling that the brewery that will be the Anheuser-Busch of the future probably will open next week sometime."

You can reach Staff Writer Sean Scully at 521-5313 or sean.scully@pressdemocrat.com.