Beer, Wine & Spirits

Lagunitas is California dreaming with 3rd new brewery

Courtesy Lagunitas Brewing Company

Tony Magee, the founder and CEO of Lagunitas Brewing Company, is expanding once again.

Magee, who has grown his Petaluma, California based brewery into one of the fastest growing brands in the beer business, is charting a new expansion plan. One year after opening his second brewery in Chicago, Magee revealed he intends to open a third brewery in Southern California.

Magee Tweet

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Lagunitas #3—as Magee calls it—will initially add another 420,000 barrels capacity, with room to grow that to one million barrels. That will add to what is already the sixth largest craft brewery by volume in the United States, as ranked by the Brewers Association. Lagunitas brewed just over 600,000 barrels last year, up from just over 400,000 barrels in 2013.

The company has been operating its original Petaluma brewery near max capacity for several years, with the facility expected to top out at 750,000 barrels by the end of 2016.

The Chicago brewery, which came online last summer, will initially add another 600,000 barrels annually on its way to a total increase of 1.2 million barrels. Magee told CNBC last summer that he expects Lagunitas could build as many as five breweries nationwide.

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"The truth is there is a lot of open field available to all of the craft business right now," he said at the time. "The beer industry is turning itself inside out."

Chicago was a natural expansion for Magee as it allows Lagunitas to save on shipping costs to the Midwest and East Coast—and the fact Magee grew up there. Southern California, however, comes as something of a surprise given Lagunitas already has a West Coast footprint, in addition to the state's well publicized drought problems.

But Magee says he has roots in Los Angeles as well, posting on Twitter that he spent about 10 years working in the L.A. area. He added that there were no plans to seek city or state incentives for the new brewery.

Magee did not accept did not accept any state or local money when building the Chicago brewery at a cost of $26 million. Instead, he requested that state and local officials reduce any bureaucratic red tape to help get the brewery built and open as fast as possible.

According to Magee's latest tweets, Lagunitas #3 will be up and running in 2017.

Known for its hop heavy beers with irreverent names like Lagunitas Sucks and Undercover Investigation Shut-Down Ale, Lagunitas has built a large and loyal fan base.

That fact was not lost on Magee, who tweeted to fans that the company is doing well because "you're digging us, [and] craft is winning in the U.S. [because] you're demanding better."