Craft-beer takeover

If you went into Chico’s BevMo! with the intention of picking up a case of Bud or Coors Light, you would have to go to the back corner of the store, beyond the aisle overstuffed on both sides with American craft beers, past another two rows of imports from Belgium, Germany, etc., all the way to a small section of shelves next to the storeroom door stocked with four, maybe five choices from the two mega-beer-corporations, Anheuser-Busch InBev and MillerCoors.

This is probably not where you expected a story about the craft-beer revolution to start, in the aisles of the newly opened local branch of the alcohol-supermarket chain, especially in the city where the Sierra Nevada Brewing Co. was born, and where the sweet, bready aroma of beer being made vents from its giant brewing vessels and fills our air, permeating so many Chicoans’ lives.

But if this revolution has been a war between the artisan breweries of the craft-beer movement and the corporations behind the big-name domestic beers that have long dominated the American beer landscape, then it’s on the shelves of BevMo! where we see that—when it comes to the battle for shelf space—the tide may be turning. The beer section of the big-box store is almost entirely made up of craft beers: hundreds of choices. Here, craft beer is winning, handily.

Thanks to Sierra Nevada, Chico has enjoyed a spot on the frontlines for every battle of the craft-beer revolution, which today is providing more delicious spoils than ever.

According to a just-released report by the Brewers Association, craft-beer dollar sales for the first half of 2013 are up 15 percent (with sales-by-volume up 13 percent). Craft breweries sold 7.3 million barrels of beer (one barrel is the equivalent of 31 gallons, or two kegs) in the first six months of this year, compared to 6.4 million during the same time last year.

Craft beer now makes up 6.5 percent of U.S. beer sales by volume (10.2 percent by dollars), with an estimated 13.2 million barrels having been sold in 2012. That’s a growth of more than 46 percent since 2006, when 7.1 million barrels were sold. Sales for the big domestic, non-craft brands have remained relatively flat, with 2012 numbers being nearly identical to those in 2008.

And nearly one million (966,000) of the craft-beer barrels in 2012 came out of the Sierra Nevada brewery here in Chico. That’s quite a jump in production compared to the less than 1,000 barrels brewed during the first year after Grossman and co-founder Paul Camusi opened the brewery in November of 1980, in a little blue warehouse in south Chico.

“Nineteen-eighty to ’82 there were six brewers producing sort of more robust, more flavorful beers, and none of us, I think, could have predicted where it would’ve gone,” Grossman said in recent interview at the offices of the Chico brewery.

Where it’s gone for Sierra Nevada is pretty much everywhere. The business is the seventh-highest-selling brewery overall in America, and the No. 2 American craft brewer behind only Boston Beer Co., makers of Samuel Adams (and which, unlike Sierra Nevada, has a national television-advertising campaign).

The brewery’s output has increased so steadily in the last 25 years—maxing out at 13,000 barrels at the original location in 1987 before opening the current brewery in 1989; hitting 100,000 in 1993; building a second brew house on site in 1997; and creeping toward its current one-million-barrel capacity in 2012—that Grossman is building another brewery outside of Asheville, N.C., to meet the demands of the growing East Coast and European markets for his beer. The East Coast location—with an initial capacity of 300,000 barrels (and room to grow to 700,000)—will start brewing its first batches before the end of the year.

Grossman is currently splitting his time between the construction site in North Carolina and his busy Chico brewery (while also completing an autobiography of his beer journey—Beyond the Pale—to be released Aug. 26). He seemed remarkably refreshed and energized as he took a break to talk about the revolution he helped start.

“It wasn’t like it is today, where everybody has heard what craft beer is,” Grossman said about those early days when he and his fellow pioneers—such as Fritz Maytag, owner of San Francisco’s Anchor Brewing Co., and the pioneering Jack McAuliffe, who opened the short-lived New Albion Brewing Co. in Sonoma in 1976—were trying to break into a market that had no space for them. “Back in those days, the market share was less than 1 percent and the amount of shelf space and the focus of a distributor or retailer was almost non-existent. … We had to educate the distributor, the retailer and the consumer.”

An early turning point for Grossman and the craft-beer movement was a 1982 article published in the San Francisco Examiner praising Sierra Nevada’s beers, which in turn led to pioneering chef Alice Waters including the brewery’s flagship Pale Ale on her menu at her Chez Panisse restaurant in Berkeley.

“[That was a] big shot in the arm. We weren’t advertising. We still really don’t advertise. But getting articles like that written about us certainly helped a lot,” Grossman said.

In many ways, the growing foodie culture of which Chez Panisse was at the forefront, has gone hand in hand with the craft-beer renaissance. American tastes have been changing, and the desire for more choices and for quality ingredients has aligned perfectly with the craft-beer-makers’ philosophy. It’s worth noting that the 6.5 percent share of the market that craft beer enjoys in America is an overall number, and that in progressive foodie hotbeds like the Bay Area, Portland, Ore., and Seattle, Wash., craft brews hold a solid share of the market.

“[It’s] 20 to 30 percent of what’s on the shelf in some markets,” Grossman said, adding that Chico falls in that range as well.

Craft beer has been making inroads into Chico for years, thanks to the longtime influence of Sierra Nevada and the city’s proximity to the great beer-making regions of Northern California and Oregon. Most of the choices at BevMo! have long been available at several local liquor and grocery stores (see “999 bottles of beer on the shelves,” page 25) that have increasingly opened large amounts of shelf space to craft choices over the past decade. And, more recently, a host of beer-centric bars and restaurants—The Banshee, Burgers & Brew, The Pour House, The Handle Bar (see Chow, p. 30), Feather Falls Casino Brewing Co., and the soon-to-open Winchester Goose (see Newslines, page 10)—have inched Chico closer to being a “craft-beer town,” instead of simply a “Sierra Nevada town.”

“The competition isn’t between me and Sierra [Nevada], or me and Western [Pacific Brewing & Dining in Oroville], or me and Sutter Buttes Brewing. It’s us against Bud, Coors, Miller, PBR,” said Roland Allen, of Feather Falls Casino Brewing Co. in Oroville.

Despite his playfully combative stance against the beer industry’s big boys, Allen is a very friendly guy. The 53-year-old head brewer at Feather Falls happily talked about his experience in Chico’s craft-brew history as he dragged hoses around the brew house inside Feather Falls Casino on a recent summer afternoon.

Allen has been making beer in the Chico area nearly as long as Grossman, getting his homebrew feet wet in 1983, thanks to the Home Brew Shop that Grossman used to own. From there, Allen would go on to work as an assistant brewmaster at Sierra Nevada for nine years, before teaming up with Tom Atmore and Bill Beeghly in 1995 to start up Butte Creek Brewing Co.

While Allen said he’s proud of the beers he made with Butte Creek—including his signature Roland’s Red and some of the first organic beers in the country—and that he had a lot of fun along the way, “it was just a constant battle” to get his beer on shelves and into bars in those early days. “I’m more about making the beer. But when it’s your brewery, you’re kind of involved in all facets.” In 2005, they sold Butte Creek, and the brewery eventually moved operations to Mendocino.

Allen says he’s happy to be able to worry just about the brewing these days, and after three years in operation, the Feather Falls brewery is doing so well that it’ll soon be adding a couple more tanks to keep up with demand. The casino also sells Bud and Coors products, but Allen says despite that, nearly half of all beer sold at the casino is their craft beer.

“The bottom line is, craft beer has just got so much flavor, and once you start drinking craft beer it’s a tough gig to go back,” he said.

While craft brew has brought choice—and a lot of it—back to the consumer, time will tell how many more brews will be able to fit into the marketplace. There were roughly 100 breweries in America when Sierra Nevada opened in 1980. That number has skyrocketed to 2,538 as of June of this year, an increase of 446 in the last 12 months alone. And there are many more on the horizon, with 1,605 new breweries currently in planning.

“The rate of new-brewery openings can’t go on forever. There’s going to be a limited amount of shelf space eventually, and so I think that will slow down,” said Sierra Nevada’s Grossman before adding, “But is craft beer going to be a flash in the pan? No, it’s here for good.”