Russian River Brewing maxes out

On Sunday, the unthinkable happened at Russian River Brewing's restaurant in Santa Rosa: it ran out of beer, at least the stuff in a bottle.

"We had a crazy weekend and we had already allocated everything out (to other stores and restaurants) so we didn't have any more beer," owner Natalie Cilurzo said.

Workers hustled over to the main brewery off Santa Rosa Avenue and snagged a few cases of the flagship Pliny the Elder IPA. "That probably got us through about 11:30 in the morning. And then that was that," she said.

Sunday's unexpected beer crisis was the result of two simple facts. First, local and national demand for Russian River's brews has reached the level of a near frenzy. And second, the brewery has reached the absolute limits of its capacity, around 14,100 barrels per year, or about 437,100 gallons.

"We're literally wringing out the wet shirt" to get every last drop of beer, Cilurzo said.

From humble beginnings as a small brewpub on Fourth Street in 2004, Russian River has grown into one of the most talked-about breweries on the planet. The beers routinely appear at or near the top of lists of popular and critical favorites.

The readers of the website Beer Advocate give Russian River three of the top 10 spots on the "Top 250 beers" list. Zymurgy magazine, the journal of the American Homebrewers Association, has rated Pliny the Elder as the best beer in America for five consecutive years.

Today, the company has 75 employees. It does not disclose its revenues.

Yet for all the buzz, the beer is only available in three states — California, Colorado, and Oregon — along with a few bars in the beer-mad city of Philadelphia. There is a years-long waiting list for restaurants and beer stores to get their hands on anything from Russian River.

Stores lucky enough to get some Russian River end up selling out almost immediately.

"Now everyone is onto the fact that we get our delivery on Friday; they start lining up about 11 or 12 to get it," said Jason Schneider, store manager of Bottle Barn in Santa Rosa.

The store doesn't even bother to put the beer on the public shelves. Employees load it straight into a cooler in the back and hand it out only to customers who request it — and there is a strict four bottle per person limit.

Even so, Bottle Barn is usually sold out by Friday afternoon, he said.

In Rohnert Park, the owners of the store Beercraft, which specializes in small-production, hard-to-find beer, primarily from California, have been on the Russian River waiting list for more than a year. Customers frequently ask about the beer, but there is just none to be had.

"We're OK with it," owner J.T. Fenn said. "We're just patiently waiting and nagging them politely."

In Colorado, distributor Elite Brands spends all year meeting with bars to negotiate the tiny allocation of limited release Pliny the Younger, available on draft only for just two weeks every February. Even in doling out the year-round beers, beer manager John Sliter said, it is important to be clear with customers: Russian River makes what it makes and there is no point in asking for more.

"We understood right from the get-go that they were not one of the breweries that will be doubling capacity every year," he said.

And that is the way it is going to stay, Cilurzo said. She and brewer husband Vinnie Cilurzo have no plans to expand the brewery. They have nearly paid off their initial investment, she said, and they have been gradually buying out the original investors to consolidate the privately-held company in their own hands.

"People can't understand why we don't want to grow our brewery," she said, "That's the American way."

But there are other things that are more important, Vinnie Cilurzo said, like a good quality of life and not digging themselves into a financial hole.

"We built what we could afford ... we didn't go beyond our means at the time. With hindsight, yeah it would be nice to have room for another tank or something but at the same time, (there is) the comfort level, the financial comfort level. We knew exactly where we needed to be."

So dire is the supply situation that Russian River pulled out of a fourth state completely late last year, abandoning the Washington market and sparking an uproar in the state's vigorous beer community.

"I'm pretty sure we won't be going back to Washington anytime soon," Natalie Cilurzo said. "We're not very welcome in Washington."

Yet for all the supply headaches, the phone keeps ringing with would-be new customers, or old customers asking for more, Natalie Cilurzo said.

"We just have to come up with a lot of different, creative ways to say 'no' 15 times a day," she said.

Success does have a darker side, however, mostly in the form of a thriving black market for the beers. Cilurzo said she has managed to get eBay to end sales of Russian River beers, often at an exorbitant mark-up, but she knows there are other sites out there trading in their rare brews.

Even some of their legitimate customers have taken advantage of the tight supply situation, charging astronomical prices for the few bottles they can get. Where a bottle of Pliny the Elder sells for $5 at the Santa Rosa bar, for example, Cilurzo said she's heard of it retailing for up to $20 elsewhere.

At least once a week, she said, she drops an account for various infractions, including gouging customers.

These stores and bars "are abusing the privilege of carrying our beers and disrespecting their customers, in my opinion," she said. "And we don't appreciate it, we don't condone it. I cannot force a retailer to charge a certain price, but we can certainly not sell them beer anymore, and that's totally legal."