Earlier today, American brewing-industry trade group, the Brewers Association, released its annual lists of top U.S. breweries for 2017. Not to be mistaken with rankings based on quality, this list is based on total production figures for the past calendar year. It is a list several San Diego County breweries have been a part of for the better part of the past decade, and remain a part of for the year gone by.
In order to provide a more informative picture, the Brewers Association produces two lists. One, titled the Craft Brewing List, includes brewing companies that meet the organization’s definition of “craft brewer.” The most important criteria in respect to these lists is that brewers produce six million barrels of beer or less annually, and are outright independent or less than 25% owned or controlled by a beverage alcohol industry member which is not itself a craft brewer. Meanwhile, an Overall List includes large macro-beer companies and conglomerates.
Stone Brewing remains the highest-ranking local brewing interest on the Craft Brewing List, coming in at number eight. Though sales have slowed for the Escondido-based company, the beer brewed at its large Richmond, Virginia, production brewery aided its ascent. The next-highest locals on the list are Karl Strauss Brewing Company at number 41 and Green Flash Brewing Company at number 43. Karl Strauss remains in the same spot it occupied in 2016, while Green Flash has slipped six places. The latter also operates a Virginia brewery in Virginia Beach, and is in the process of taking over a recently-acquired brewpub in Lincoln, Nebraska, but recently contracted its sales territories, has suffered through two significant rounds of layoffs, and is openly seeking capital investment.
Though Ballast Point Brewing remains the largest beer-making operation in San Diego County, it does not show up on either list. Instead, it is lumped into parent company Constellation Brands, which ranks number three on the Overall List. Stone was the only local independent craft brewery to make it onto the Overall List, coming in at number 18. Both lists can be viewed in their entirety here.
It’s easy to look at a seemingly successful large brewing company, see their beers (and those of their acquired brands) on the taps and shelves all over the county, knowing they are also distributed throughout most of the country, and assume all is well. But even though the craft-beer boom is in full swing, with a record number of new breweries opening throughout the nation, the industry has never been more challenging, especially for regional breweries ranking among the nation’s largest.
Last January, Mira Mesa-based Green Flash Brewing—which also operates a satellite barrel-aging brewery in Poway as well as a production brewery in Virginia Beach, Virginia, and a soon-to-open brewpub in Lincoln, Nebraska—laid off around 25 employees. Given Green Flash’s status as the 37th largest craft brewing company in the U.S., this was big news. And so, too, is today’s announcement that the company has made the difficult decision to let go of 15% of its workforce.
That percentage equates to 33 employees. Owner Mike Hinkley says that while no Green Flash tasting room or Alpine Beer Co. (a brand acquired by Green Flash in November 2014) staff will be impacted, it will touch on other departments, primarily those serving business administration functions—marketing, events and the like—in both San Diego and Virginia Beach.
“I am greatly saddened by folks having to leave the company. We simply could not compete effectively with such broad geographic reach,” says Hinkley. “We will soon discontinue shipments to distributors that currently constitute about 18% of our wholesale trade revenue. With that reduction in revenue, we have to reduce expenses accordingly.”
Hinkley reports the company has decided to consolidate distribution, reconfiguring to best serve locales nearer to its production facilities. Moving forward, beer brewed and packaged at Green Flash’s Mira Mesa facility will be shipped to California, Arizona, Hawaii, Nebraska, Nevada, Texas and Utah, while Virginia product will ship in-state as well as to Delaware, Maryland, New Jersey, New York, Ohio, Pennsylvania and Tennessee. According to a press release, the refocus will enhance the company’s operations and ability to provide consumers with fresh beer.
When asked what factors led to the need to reconfigure distribution and consolidate Green Flash’s workforce, Hinkley responded, “The industry has continued to grow more crowded and complex in recent years. Big Beer’s acquisitions and consolidation of the biggest brewers created pressure from the top. Thousands of small brewers opening across the country created pressure from the bottom. Under those conditions, we are pulling back into the territory where we are the strongest and concentrating our resources.”
When asked about the future of Green Flash’s Poway-based Cellar 3 barrel-aged beer operation, Hinkley says it will remain open and that, months ago, the decision was made that, despite management’s belief that the beers are of high quality, the amount of beer that is packaged there and shipped to retailers will be reduced significantly.
Even in the midst of consolidation, Hinkley and company are looking to the future with optimism. The Lincoln brewpub is on-schedule with a February opening timeframe confirmed. Head brewer Jeff Hanson (formerly of Omaha’s Brickway Brewery and Upstream Brewing, and Boulevard Brewing) will create Green Flash core beers under brewmaster Eric Jensen’s supervision, as well as beers of his own devising, and that facility will eventually supply the entire state of Nebraska with Green Flash product.
Should this prove a viable business model, Hinkley says they will look to replicate it elsewhere, but there are no plans for such expansion in the immediate future. For now, the company will focus on its revised approach to distribution—it had distributed to 50 states, 35 more than the count listed on its newly announced business plan.
Since the moment Green Flash Brewing Company acquired Alpine Beer Company back in 2014, there has been concern among protective fans of the latter about that brand’s future. Over the past two-plus years, numerous rumors have popped up, but never in such abundance and covering so many topics as in the weeks following Green Flash’s recent round of layoffs. The company dismissed approximately 25 employees over the span of a few days. Since then, numerous sources have signaled the beginning of the end in talks with industry colleagues. Enough so, that we recently went to Green Flash owner Mike Hinkley and other company representatives for direct responses to each of them.
Rumor: It’s been reported that Hinkley has stepped down from the CEO position.
Response (from Green Flash): Hinkley is still the CEO and his title has not changed. Chris Ross was recently promoted from chief operating officer to president, and is reporting to Hinkley. This promotion recognizes the great knowledge and vast experience that Ross brings to the Green Flash organization. Over the past year-and-a-half, Ross has built a solid operations department. In his expanded role as president, every department at Green Flash will benefit from his insight and business acumen.
Rumor: Hinkley has moved to Fort Lauderdale, Florida.
Response (from Green Flash): Hinkley is dividing his time between both coasts to be close to the Virginia Beach brewery, the San Diego brewery and Florida. He plans to spend less time in the brewery and more time on the road with his beloved sales team, the Road Warriors.
Rumor: Alpine’s founding family—Pat, Val and Shawn McIlhenney—will soon have no affiliation with the company.
Response (from Hinkley): The Hinkleys and the McIlhenney’s continue to own Alpine Beer and Green Flash. McIlhenneys forever is the retention plan. If Shawn has children someday, we will send them all to brew-school and hope for the best. Pat is an awesome brewer. Shawn is an awesome brewer. Hoping it’s in the genes. None of us will live forever, but Alpine Beer will.
Rumor: Brewing operations will cease permanently at Alpine Beer’s brewery in Alpine.
Response (from Hinkley): We plan to brew Alpine Beer in Alpine forever. We are currently working with the landlord on site-development and hope to build a new brewery in Alpine as soon as possible.
Rumor: Green Flash is working on constructing a facility in Texas.
Response (from Hinkley): Green Flash will eventually build a brewery in the middle of the country. The motivation? We are in the business of making and selling beer. It makes great business-sense to bring fresh beer to market and connect with customers close to the point-of-sale. We love Texas, but there are no specific plans to build there, or anywhere else, yet. We are just getting comfortable in our Virginia digs.
Last weekend, Green Flash Brewing Company turned open the doors of its new East Coast brewery and tasting room in Virginia Beach, Virginia. The project took more than three years to get to the point where it was ready for sharing with the public, but now that 58,000-square-foot center of fermentation is producing and dispensing beer. We reached out to founder and owner Mike Hinkley to see how things went and how Green Flash’s home-away-from-home compares to America’s Finest City.
West Coaster: How were the weekend’s opening festivities?
Mike Hinkley: Amazing! The building is beautiful and the beer garden is essentially a City park attached to the brewery. Thousands and thousands of people showed up to welcome and support us at Treasure Chest Fest and the grand opening. Because it is the off-season for tourism there, it was all locals. It felt so good to finally get together with them and share the excitement.
WC: What is the Virginia Beach beer-scene like?
MH: Virginia Beach’s culture is very much like San Diego’s, a beach city with big tourism, big military and strong local community culture. But the craft culture and beer scene are really just a few years—rather than decades—old, so it is very different in that regard. The fun part is that the excitement and interest are so high. People are so interested to learn about all of the unconventional beer that we make and are excited for all of the a-ha moments that come along with drinking San Diego beer.
WC: What new goals and opportunities are you looking to realize with the East Coast facility?
MH: We sell about one-third of our beer on the East Coast. We expect it to grow even faster now that we offer regional pricing and have an amazing regional connection point for East Coast customers at Virginia Beach. I think we might do as much as 40,000 barrels from Virginia Beach in 2017, and then grow from there. More important than the numbers is becoming part of the craft-beer community, and sharing in the good times that come through connecting with people.
WC: In opening the new facility, what sort of on-site customer-experience were you looking to provide, and did lessons learned from your San Diego tasting rooms prove helpful?
MH: Our San Diego tasting room is a great meeting place. We care so much about the customer experience and we think every customer feels it. We bring that same over-arching approach to Virginia Beach. In Virginia Beach, we have more space, so we are able to have a separate events area, and a much, much bigger beer garden. Those are great advantages, but only important if we have the same dedication to making every customer experience awesome.
WC: What is on the horizon for Green Flash?
MH: We will take the rest of the year to put the finishing touches on Virginia Beach. Then we will continue to be Green Flash—ignore the beaten path, and wander off into the adventurous and unknown. I have no doubt there will lots of opportunity for excitement.
Until this month, the farthest I’d driven to check out locally owned brewery properties was Nickel Beer Company in Julian or Pizza Port’s San Clemente brewpub. But I easily eclipsed the distance to those out-there spots when, while on vacation in Washington, DC, I rented a car and drove south to Richmond, Virginia, to see the 14-acre East Coast incarnation of Stone Brewing.
It sounds funny, but I knew I was there when I saw the huge brown building with no sign. Stone CEO Greg Koch has a rule against such markers, wanting the company’s venues to be enough of a destination that they aren’t simply happened upon. That has worked in the past on Escondido’s Citracado Parkway. When the company’s current headquarters was built, there was little else on that road. Such is the case in the Fulton section of Richmond, where the intent is for Stone to play a major role in revitalizing an area of the city that has been mostly ignored or forgotten.
Guests can approach Stone Brewing – RVA from unattached parking lots on the east or north side of the sprawling 200,000-square-foot brewery. Both routes take visitors across bridges of varying lengths and designs. From the north, a covered bridge takes one under an operating set of railroad tracks. On the east, an angled and enclosed two-part bridge traverses a tall-grassed lawn leading to the beginnings of a garden, including vegetation and a retaining pond. Both bring imbibers to a patio area featuring umbrella-equipped picnic benches, most of which were packed with people the Saturday afternoon I stopped by.
Double doors lead into a spacious tasting room. To the right are more tables and more gargoyle merchandise than you can shake a mash-paddle at. To the left is the main-event, a bar stocked with beers from Stone and its sister-operation, Arrogant Brewing. Although the brewery was constructed to handle heavy-duty brewing of core beers such as Stone IPA (a new recipe for which is currently in circulation, replacing the original flagship) and Stone Ruination Double IPA 2.0, a number of rare and seasonal beers are regularly shipped there from the Escondido brewery to keep things interesting and give fans a reason to return.
Brewery tours are offered, in which guests are escorted up a staircase and ushered through a set of gargoyle horn-adorned wooden doors leading to the deck of the facility’s 250-barrel Krones brewhouse. Coming in at the size of competitor Ballast Point Brewing & Spirits’ newest brewing apparatus, it is built for the same purpose—to pump out beer in multiple batches and keep a nation of beer consumers supplied with ales. Currently, Stone Brewing – RVA has eight 1,000-barrel fermenter tanks and as many 250-barrel fermenters, plus four 1,000-barrel bright tanks up and operational. But there’s room for an eventual 40 tanks.
Peter Wiens (formerly of Anheuser Busch-InBev and, more locally, Temecula’s Wiens Brewing Company) is in charge of brewing operations in Richmond. He and roughly eight other employees from the Escondido facility came over to take up various roles in RVA. And a number of other brewing and packaging employees came over from the nearby Budweiser facility in Williamsburg, Virginia.
Beyond the brewery lies a wealth of packaging muscle. Modern technology is everywhere, providing more automation than the Escondido facility. That machinery includes a state-of-the-art Krones bottling line capable of filling 600 bottles-per-minute. In the not-too-distant future, a canning line will be added to the mix. Also on the production floor is a sizeable quality assurance lab that Stone allows lab-less local breweries to use. But that isn’t where RVA brewing camaraderie ends. Already, Stone has brewed collaboration beers with and at numerous Richmond operations.
The projected production goal for Stone Brewing – RVA’s first 12 months of operation is forecast at 100,000 barrels of beer. This will allow the company to distribute that product to all states east of the Mississippi by the end of this summer. Having spent a great deal of time at Stone’s Escondido brewery, I found the layout and innovation behind its Richmond counterpart to be both impressive and encouraging. So, too, was the fact that the seven-days-a-week operation has garnered a good amount of business, while establishing a solid stock of regulars.
Seeing Stone through a new set of eyes—the eyes of the Richmond employees as well as the city’s denizens—felt different…and really good. It reminded me of what it was like to discover Stone back in the late ‘90s, where people found themselves in awe that something so cool was right in their backyard. Best of all—and I mean no disrespect to fans of Arrogant Bastard Ale (it was my first craft-beer, after all)—none of the “Arrogance” has settled into the Richmond facility as of yet. There is no leftover air of you’re not worthy pompousness that needs to be wiped clean. The roughly 60 RVA employees are mostly brand-new and extremely excited to be part of this venture, as well they should be. That leads to a great level-of-service and overall friendliness that I very much enjoyed.
I found myself rather proud to see Virginians enjoying an authentically hoppy and justifiably proud taste of San Diego County, more than 2,600 miles removed from my hometown. Even without the two-story Stone Brewing World Bistro & Gardens restaurant that will debut down the hill near the James River sometime next year, Stone Brewing – RVA provides plenty of reasons to visit and a great deal of promise for the future.
Green Flash Virginia Beach Update
Just as this article was going to press, Mira Mesa-based Green Flash Brewing Company announced that its East Coast facility in nearby Virginia Beach, Virginia, would open to the public on November 13. In celebration, the company will offer a full week of events, including the third annual East Coast iteration of its Treasure Chest Fest benefiting the Susan G. Komen breast-cancer charity organization the day prior to the official debut, November 12. The estimated annual production capacity for the Virginia Beach facility will be 100,000 barrels. Construction of the brewery can be viewed via an online live-cam.