Lagunitas now No. 5 craft brewer

Petaluma's growing Lagunitas Brewing became the fifth-largest craft brewer in the United States last year, one of four North Coast breweries among nation's 50 biggest indie beer producers, a trade group reported Monday.

Lagunitas produced more than 500,000 barrels last year, or about 15.5 million gallons, up from 161,000 three years ago. Just last week, the brewery opened a second plant, this time in Chicago, that should enable it to make more than 1 million barrels.

Last year, it was ranked sixth on the list published by the Brewers Association, but its growth propelled it past Deschutes Brewery in Bend, Ore., to the fifth spot. Founder Tony Magee downplayed the significance of the list, though he described it as "nice to see."

"Every day I am just trying to do the work and live up to the opportunities that are out there," he said. "And having fun doing it."

The Brewers Association report ranks craft breweries by sales volume. The term "craft" is defined by the association, in part, as independently-owned breweries producing less than 6 million barrels per year. It excludes major brewing companies such as Anheuser-Busch and MillerCoors and smaller breweries with large corporate ownership, such as Mendocino Brewing, which is largely owned by an Indian brewing conglomerate.

Compared with those bigger breweries, Lagunitas rose two spots to 11th place in the United States, according to the association.

This year's craft brewer list includes three other North Coast breweries: Bear Republic, which fell two spots to 36; Lost Coast, which rose one spot to 37; and North Coast, which fell three to 45.

As with last year, the top spot was held by Boston Beer Company, maker of the Sam Adams line. California's Sierra Nevada remained at number two, while Colorado's New Belgium and Texas-based Gambrinus held steady at three and four.

The exploding volume at Lagunitas has Magee thinking even bigger. He said he is already contemplating a third brewery somewhere in the U.S., possibly as soon as 2017, and eventually building or acquiring a brewery in Europe to meet burgeoning demand for American beers.

Lagunitas beer is distributed in 36 states, with 10 more ready to join once Chicago production ramps up, he said. Magee is also in discussions with a number of chain stores that he previously was unable to supply because the Petaluma plant didn't have room to expand.

The expansion plans "can seem like real, crazy ambitious," he said, "but there is a real linearity to it," given the growth of the company and craft brewing in general.

At the same time sales of major brands such as Budweiser and Coors are stagnating or falling, flavorful brews from smaller producers are surging. Beer sales volume nationally grew only 1 percent last year overall, but the craft segment grew 18 percent. It now accounts for 7.8 percent of all beer sold in the U.S., up from 6.5 percent the previous year.

Lagunitas' growth, even as it expands production elsewhere, is good news for Sonoma County, said Ben Stone, director of the county Economic Development Board.