Petaluma Hills Brewing Co. to close its doors

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Petaluma Hills Brewing Co. will close on June 30; the popular local brewery has run out of cash to fund its operation, owner JJ Jay said on Monday.

While the craft beer industry is experiencing slower growth nationwide, Jay attributed the closure primarily to the fact that he did not have sufficient funds when he started the business in 2011.

“I started with half of what I should have raised or maybe even a quarter,” said Jay, who left a job in animation and visual effects with movies such as “Shrek The Third” and “Monsters vs. Aliens” to start the brewery.

He estimated that any brewery now starting should have at least $1 million in seed money in place, preferably $2 million.

The Petaluma brewery released its first beer in 2013 and was originally noted for its location across North McDowell Boulevard from Lagunitas Brewing Co., Sonoma County’s largest brewery and now the ninth largest in the nation.

It was able to carve out a business with its taproom, which offered a wide range of styles including its flagship Line & Twine India pale ale. The brand also was available in local retail locations such as Costco. It produced less than 1,000 barrels a year.

But the lack of initial funding hampered Petaluma Hills’ growth when a new taproom ordinance created permitting delays with the city of Petaluma. He also said he made business mistakes, such as buying instead of leasing his 10-barrel brewing system.

“It meant that I didn’t have a sales staff. That’s what ultimately doomed the brewery,” said Jay, who employed three full-time employees. “The root cause was there wasn’t enough money.”

To keep the business afloat, Jay said he sold his house to help provide funding. “I probably lost more than any of my investors,” he said.

Jay said his landlord, who is also a brewery investor, will take over the equipment as he works to pay off his debt.

After the closure, Jay said his goal will be to try and revive the Petaluma Hills brand on a smaller scale with his son, Austin. He noted that he once shared his brewing equipment with the owners of HenHouse Brewing Co. before it moved to its Santa Rosa location two years ago.

“I have no idea what we may do,” he said. “It would be ironic, though, if I would go over to HenHouse and rent their equipment.”

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

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