California

An Interview with Lagunitas Founder Tony Magee

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Lagunitas Brewing in Petaluma, CA is easily one of the fastest growing breweries in the country. Lagunitas’ brand is built on classic west coast-style IPAs and non-conformist–some might say alternative and hippie–attitude. The brewery is known foroncebeing shutdown due to pot smoking and renaming one of its beer from “Kronic” to “Censored” after the TTB’s objection to the original moniker. Founder Tony Magee is one of the most down-to-earth personalities in craft beer–he’s just as likely to bust out his guitar and sing a country-western tune at a meet-the-brewer event as he is to promote his own brand. The most prominent brewery owner on twitter, though he follows no one, the stream of consciousness-like output has been the cause of recent controversy, from questioning bigger brewers taking government subsidies to directly questioning Sierra Nevada and New Belgium’s motivations. Not to be outdone by Sierra Nevada and New Belgium Brewing’s announcements about opening east coast brewing expansions, Magee announced Lagunitas’ own expansion via twitter in a typically alternative method. Lagunitas Brewing expects to sell more than 240,000 barrels this year, and by the end of 2013 another 240,000 barrels just from the company’s new Chicago facility.

I got a hold of Tony Magee via twitter (of course). He agreed to an interview and was incredibly friendly, accommodating, and gracious, even under pressure from hard questions.

Tony Magee and dog

Q: As much of an absurd question as this is to boil down to one simple answer, what is the secret to Lagunitas’success?


TM: Our brewery began bottling in the depths of the mid-1990’s when Craft Brewing hit a speed bump and there were a lot of breweries that had to close. The way we got through this tough time was to allow beer-lovers to guide the business… they have been driving the bus ever since. We keep the bearings lubed and the malt and hops flowing but, we only do what the world of beer-lovers tells us to do… and, although that sounds simplistic, it ain’t as easy as it looks!


Q: What were you doing before you started the brewery?

TM: Every brewer has has history, meaning that we were all doing something else before hearing the siren’s call… For me, after abandoning my hopes of being a musical composer and arranger, I was selling printing to the 1990’s world of San Francisco banks… which was a good but sad job in that when I had a great year of business a whole lot of trees had to fall to the ground to make it all happen. Brewing was like an island in the setting sun to me.

Q: When you announced plans to open the big new Chicago area brewery did you know you were going to come under so much scrutiny? From the outside it almost seems like a telescope has been refocused on you.

TM: Like I said, brewing is like an island in the sun, and although I’ve always found my way in the land by knowing and telling a vision of the truth about things, when too many are listening it is inevitable that someone will think it is aimed at them or someone they care about, although it never is. I guess that is the downside of having people notice what I might say. Being that it is an island in the sun, most folks don’t want to see that the natives don’t all get along as well as the brochure portrays. It’s all kewl, the thing about Craft is that we make special beers that are dug by people who have special desires and it isn’t necessary to have everybody love everything that anybody brews in order to have a nice experience in the world.

3D model of Lagunitas new Chicago brewery



Q: For the record, what’s your stance on craft brewers taking subsidies and government loans for growth?


TM: Business is as business does, but we all also make the world that we want to live in through the decisions we make. Subsidies are great, especially for breweries who need it, because it can make the difference between getting open or leaving the dream to start a business and hire people on the curb. For my part, Lagunitas was shown all sorts of incentive money for the Chicago brewery, but I declined it all on its face. Why? Because the new brewery completely pays for itself, meaning that our two future breweries, each making beer close to their point of sale, are more profitable than making it all in Petaluma and shipping it thousands of miles across one desert and two or three mountain ranges. The same is true for any brewery with the scale to do the thing at all. The financial world of state and city and county governments is pretty strained right now, so, since I didn’t need any help, I declined the offer.


Q: The growth at Lagunitas has been really rapid to support the expansion have you taken out new loans or brought in new investors.

TM: We’ve been lucky to have a bank that believes in us. In fact, since they’ve gotten to understand our business so thoroughly, they’ve now gone on to work with other craft brewers as well. So, we have done it all with very manageable debt financing.


Q: When a craft brewer, like a band, gets big, everyone accuses them of selling out. No craft brewer is near InBev, but like an indie band’s hits getting plays on mainstream radio, many like yourself are blowing up. What is that like and how do you keep the cred?

Chicago warehouse site of Lagunitas new brewery

TM: Selling out happens when you forget why it is that you are in that position in the first place. It’s easy to believe your own press. In our case, we realize that, as ever, we still suck and have a lot of work to do to earn a place in the world. Like I said above, beer-lovers are driving our bus and we do respect the bus driver!


Q: What are your thoughts on craft beer vs InBev? A lot has been made recently about their shady business tactics getting tough with craft beer. You’re going into a city (Chicago) which is a hotbed for such issues, with the buyout of Goose Island and recent go ahead for Budweiser to purchase their distributor flying in the face of the 3-tier system.

TM: The ABI thing in Chicago was a tense decision where the ILCC could not find the authority in the legislative statute that would have allowed them to do what they wanted to do and prevent ABI from participating in the ownership of the distributor. Most people don’t know that ABI only owns about 30% of that distributor, so it is not a controlling interest anyway. The question was if ABI had to divest that interest and the ILCC could not find that power in the legislative language. BUT! Independently operated distributors are terribly important to us. ABI/ShockTop and Coors/BlueMoon can’t make consumers buy their products, but in the back rooms of retail and distribution, they can constrain what beer-lovers have the CHANCE to buy, and that is where the problem would lie. It would be an invisible sort of influence over things if it is allowed to take root.

Q: Some distributors and many brewers believe the 3-tier system is flawed and outdated, and some brewers own their own distributors. I think in many cases we think of a craft brewer owning a distributor as a success for the little guy, but with the macros it’s a huge slap in the face. What is your opinion?

TM: The existing three-teir system is the tool that we all have to work with right now, and it isn’t any more flawed than any other ‘system’ that we have to deal with in the business. The reality I think about is that even though we do move a lot of beer to the retail world, nowhere is there a distributor that could be as good as they are today if the only beer they sold was mine, not even as good as they are if they ONLY sold craft beer. Really big brands on the same trucks as our beer are part of what makes our efforts to grow and hire people and make a living possible. The world is not a binary place and every part of the industry we work with has to serve many different masters, from hops and barley to distribution and retail. Big brewers are in all of those same spaces right alongside us. The most important job is learning how to move the needle for all of those collateral business partners despite our relatively small size!

Q: Do you think there is a craft beer bubble? Personally I do not believe there is, but I do think we may see a shakeout in the grocery stores with so many new breweries packaging for shelf space and not enough SKUs. I recently saw Charlie Papazian tweet “”80% of Large Retailers Don’t Plan to Increase Craft Space,” sez industry analyst. I guess lg retalers will lose out to small retailers…”

Lagunitas’ new bottling line

TM: The shake-out question is a somewhat narrow way of looking at it all. The thing to think about is the simpler idea that the future will not look like the past. I don’t worry about a shake-out, and neither should the smallest name-brewer. I think that we all think about how to put ourselves in the best spot to give beer-lovers what it is that they don’t even know that they want. I think of it like the NFS thinks about forest fires; they will happen, although no one can say where, when, or how big the blaze will be. The best thing to do is just to be ready, be balanced, and pay attention to the conditions around you.


Q: That seems to be already the case for craft beer drinkers. The real beer geeks already have to go to specialty bottle shops to find many specialty brands. What do you think?

TM: Ain’t it cool that there are specialty beer shops? Charlie is correct about that…!


Q: Whatever happened to the Frank Zappa-inspired beers? I heard that his widow had an issue with them, but later heard a rumor that may be working itself out. Can you set the record straight?

TM: Gail Zappa is a very cool person who has a very big legacy to preserve and sometimes she reacts in abrupt ways if she thinks things are getting away from her. I got to do the first five albums and that was so cool that I don’t feel bad about not doing more. Hell, I got to see the Freak Out! and Ruben And The Jets album cover flowing down my own bottling line… all I can say is that after seeing that I can die happy.


Q: What in the craft beer industry are you most excited about right now? Anything from new trends, styles, hops, business, anything….

TM: The thing that I can see that is most exciting is that the things that Lagunitas did in the ’90’s are being done coast-to-coast and beyond. One hop dealer that we know well will ship one-million pounds of Yakima Valley aroma hops to Europe this year.. I’m talking Citra and Simcoe and others and there is only one thing that you’d want those flavors for… in other words; American Craft Brewing is affecting the whole world of beer… crazy.


Q: After opening your Chicago brewery, what’s next on the plate for Lagunitas? Any special beers or projects you are excited about?

TM: We are planning a third brewing operation in UlaanBataar and expect that to be open by early 2015… the fun never ends.


Q: Where do you see Lagunitas being or where do you want to be in 5 years from now?

TM: I see us being widely distributed in greater Mongolia and the lower Uzbek Valley…


Q: Have you really quit using Twitter for good?

TM: Yup… Twitter was, when I had a few hundred random followers, a sort of confessional area for me; The things I worried about, the things I didn’t want to deal with but had to, the problems of the owner that have nothing to do with beer but have everything to do with the bodily fluids of the business and its people… After a while, although I didn’t notice exactly when it happened, it became a news source (probably after I announced the Chicago brewery from my couch with a cat in my lap while watching Blade Runner) and that was a bad match for why I was doing it.


installing new tanks in Petaluma


Owning any business is a thing that isolates a person somewhat, as counter-intuitive as that sounds. My closest friends all work at the brewery, as does my wife, and so everything that happens, happens to them as well and venting is difficult for me because it can make those same people who are close to me nervous about their own situations. Every business owner knows this. Twitter was a safe place for a while in that I could tweet a thing at arms length and also put it in a sort of abstract language that was more interesting than threatening, but, somewhere along the line, all that changed… so, yup… I’m done. I thought about doing it under a pseudonym but that felt dishonest, so, I’ll just keep it all to my self and tell my dog instead! Unless of course the dog gets a twitter account too…d’Oh.

Founder of The New School and most frequent contributor Ezra Johnson-Greenough has worked in the craft beer industry for almost 10 years, doing everything from illustrating beer labels to bartending at renowned beer bars and breweries like Belmont Station, Apex, Laurelwood and Upright Brewing. He has also had a hand in creating events like the Portland Fruit Beer Festival, Portland Beer Week, and the Brewing up Cocktails series. He is available for freelance consultation in marketing, events, graphic design and branding. Contact: SamuraiArtist@NewSchoolBeer.com

3 Comments

  1. Anonymous

    December 10, 2012 at 10:49 pm

    just had the pale ale at beer mongers was great with lunch!

  2. Anonymous

    January 4, 2013 at 4:30 am

    I work in the industry, and I have to say that I have always admired Lagunita’s principles and vision for craft beer. More-than-reasonable prices for excellent beer! I put every lagunitas I can get ahold of into my set and my customers know to buy them. Next year, please make more Brown Shugga!

  3. carlos mejia

    June 11, 2014 at 8:36 pm

    Love Lagunitas, undercover!!!!

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