Stone Brewing just says no to ‘Big Beer’

It was a different time when my business partner, Steve Wagner, and I started Stone back in 1996, we were one of roughly 800 breweries in the United States, with about 15 in San Diego. Now the U.S. has nearly 4,200 breweries, with 117 in San Diego County alone.

Stone has had a front-row seat to the dramatic growth and evolution of craft beer. We’ve gone from seven employees and brewing 800 barrels the first year, to more than 1100 employees and 330,000 barrels in 2015. As we enter our 20th year in business, we’re preparing to open new breweries in Richmond, Va., and Berlin, Germany, with the latter making us the first American craft brewery to independently build, own and operate a brewery in Europe.

We opened doors, right as the craft beer bubble of 1996-97 was bursting. Rampant mediocrity in the “microbrew” (a now cutely antiquated term) industry, along with “Big Beer” obfuscation, had led to a mass consumer defection from the category. Industry growth halted as wholesalers and retailers discontinued brands. Opportunities for new breweries to find their way to market were scant.

While we were proud to self-distribute our beer in the early days, we had no “critical mass.” We lost money with every delivery ($20,000-$30,000 a month!). Our meager startup funds were being bled dry. Desperate to survive, we contacted each of San Diego’s Big Beer wholesalers. Each turned us down. When the last “no thanks … not interested” was delivered in February 1998 (after being agonizingly strung along for four months, no less), it seemed we were doomed. Not to give away the end of the story, but by miracle or just plain hard work, March turned out to be our first break-even month. Business hardly became easy after that. However, “easy” wasn’t our goal. Great beer was.

Stone Distributing was born with a minivan in 1999. Today we have 90 delivery trucks covering seven counties in SoCal, representing more than 35 of the world’s best craft and specialty brands. Our distribution division is another way we aggressively promote the industry.

Thanks to the collective independence and creativity of our region’s brewers, San Diego is considered an international craft beer mecca and the leading brewing region in the world for quality and innovation. This reputation was hard won through our work at Stone and the efforts of our friends at AleSmith, Pizza Port, The Lost Abbey, Societe, Modern Times, Green Flash … and Ballast Point (to name but a few). Our region’s creative prowess is recognized by the worldwide spread of “San Diego-style IPAs” and related styles. We have reason to be enormously proud.

Craft beer is officially a thing.

The industrial giants that worked for decades to marginalize our segment have found their tactics ineffective. So, Big Beer decided it’s time for an age-old strategy: Purchase. Control. Obfuscate.

Three local SoCal brewers recently sold controlling interests of their companies. Ballast Point sold to Constellation Brands (known for Corona, Modelo, Gallo and Manischewitz wines, Svedka Vodka, etc.), Saint Archer to MillerCoors (which is a JV of the South African-owned SABMiller, the world’s second-largest brewer), and Los Angeles’ Golden Road to Anheuser-Busch InBev (the Belgian-owned, Brazilian-operated largest brewer in the world). In purchasing small, “local” brands, Big Beer is able to capitalize on the purchased brand’s reputation, while many consumers are too distracted to pay attention or care.

Truth is, we live in a complex world. As consumers, it’s exhausting to know which brands are truly independent, authentic; did or didn’t sell out. When a craft brewer sells out to Big Beer, not only are they handing over control of their company’s future (irrespective of the requisite “We’re Not Changing Anything” press release), their brand is transformed overnight from being a positive force for growing the craft segment into a tool fighting against the brewers who choose to remain solely dedicated to the craft category.

For most, the craft beer ethos is “not for sale.”

Big Beer business practices are like a hockey game: Score at all cost and don’t hesitate to throw an elbow in the process. At Stone, we treat business more like a footrace. Yes, we like to win, however, we don’t knock down the other guy to do it. As we strive for our personal best, we feel morally obligated to be true to the craft beer ethos of camaraderie and standards we’ve set up for ourselves during the past 20 years.

It’s going to be weird and sad to know that former craft brewers are now being used as a tool to throw elbows at the remaining craft brewers. My good friend Sam Calagione of Dogfish Head reflected on this in a recent article: “they're using these once-craft brands as pawns in their game to knock the true indie breweries off the board.” On the surface these brands may look the same, but the soul behind the eyes is … different. Not to worry about us at Stone however: We wouldn’t have gotten this far if we couldn’t take our lumps.

We are standing strong, knowing our team members and fans care passionately about Stone Brewing’s philosophy and values. Celebrating an artisanal, natural approach to beer and food, philanthropy, sustainability, reinvesting in our company, community, industry and future … all while holding true to the craft beer ethos. The ideologies that Steve and I have been able to incorporate into Stone Brewing are of incalculable value to us, and selling our company to Big Beer is not in our future. No matter the size of the check. Period.