The idea of an American brewery setting up shop in Germany to make and sell beer in a country synonymous with the product may seem ill conceived, but for Greg Koch, chief executive and co-founder of California’s Stone Brewing Co., it’s a challenge he appears to relish.
Stone will be the first American craft brewer to independently own and operate a brewery in Europe when it opens its new $25 million (€23 million) facility in Berlin in March. Located at a historic gasworks complex in the Berlin district of Mariendorf, the site will encompass a brewery, restaurant and gardens on more than two acres (9,290 square meters) of indoor and outdoor space.
The location, Stone’s first facility outside of the U.S., will serve as the company’s continental hub. From there, it will distribute its unique brews throughout Europe.
The 84-barrel (100-hectoliter) Berlin brewhouse is aiming to sell around 5,000 barrels in its first year, a figure that pales in comparison to the nearly 300,000 barrels Stone sold in the U.S. in 2014.
In California, the company operates a twin 120-barrel brewhouse and it’s in the process of building an additional 200-barrel facility in Richmond, Virginia, set to open in the second quarter of 2016.
Stone is already brewing in Berlin despite ongoing construction work. It began distributing its first batch of locally brewed beers to taps across Europe in early December, including its classic Stone IPA and hearty Arrogant Bastard Ale as well as its cocoa, coffee and pasilla pepper-spiced holiday season Xocoveza.
Germany's much-vaunted Reinheitsgebot, or beer purity law, struggles for relevance in this day and age. Greg Koch, CEO of Stone Brewing Co.
Mr. Koch is certain Stone’s brews will delight European beer drinkers, at least some of them. “I’m used to people not liking our beer because not everybody is accustomed to big character, very flavorful, very aromatic beer,” he said. “But once they do discover it, they often fall in love.”
Founded in San Diego in 1996, Stone has become the ninth largest craft beer brewery in the United States following spectacular growth rates that have averaged in the low 40s since its start. Koch attributes that success to “giving consumers credit for having great taste,” something he says many food and beverage companies don’t do. “We’re very good at what we do. We learned our craft and focused on it. Along the way we have fun, we have a lot of personality with our company, we have a lot of personality with our beers. We don’t hold back.”
The company has never advertised or discounted its product, a tradition it plans to continue in Europe. Stone is financing the $25 million investment on its own by bank credit. “We don’t have any local investors or partners,” Mr. Koch said. “We’re doing it ourselves. That’s important because we get to do it our way.”
I think of authentic German beers as the classical music of beer — traditional, storied, developed over long periods of time, artistic, nuanced and refined. With our craft beer, we’re more rock ’n’ roll. Greg Koch
The European production site will provide a number of advantages, with freshness being of particular importance. Stone’s beer is unpasteurized and has no stabilizers or chemical additives, so brewing it in Berlin for the European market makes sense, said Mr. Koch. Not having to ship it half way across the world also keeps costs down while also minimizing its environmental impact, he added.
Finding the ideal location wasn’t easy. Stone looked at more than 130 sites in nine countries and several others in Berlin before deciding on the Marienpark industrial area. The company wanted historical buildings with “a classic European character” large enough to house a brewery and restaurant with space for outdoor seating and a garden area.
Like Stone’s two farm-to-table World Bistro and Gardens restaurants in the San Diego area, the Berlin eatery will focus on local organic ingredients and an eclectic, creative menu that does not include burgers, fries, Coke, Pepsi or anything else with high-fructose corn syrup. It will also offer 40 beers on tap, including many guest beers from local, European and U.S. brewers.
Germany’s own craft brewing sector, while small, is growing rapidly. According to the Federal Statistical Office, the number of breweries with annual production capacities of 5,000 hectoliters or less, which include small craft brewers, grew from 822 in 2006 to 933 last year yet still accounted for a mere 0.9% of Germany’s total beer production, with craft brewers making up an estimated 0.2% to 0.5%.
Among microbreweries with annual capacities of just 1,000 hectoliters or less, the growth was even more dramatic, from 523 to 677 in the same period. Marc-Oliver Huhnholz, spokesman for the Deutscher Brauer-Bund, Germany’s brewers association, said craft beer remains very much a niche market in Germany, but adds that the increased interest is a welcome trend that is highlighting the origins of German beer culture. “Craft beer was being brewed in Germany long before the term was even known in the U.S.,” he said.
Mass-produced industrial beer is like elevator music. It’s classical music that has been dumbed down, computerized, homogenized — all the soul is gone from it. Greg Koch
Indeed, German breweries boast 50 styles and some 5,500 different beers, not to mention the country’s unique beer purity law, the Reinheitsgebot, which is celebrating its 500th anniversary next year and which limits beer to four ingredients — barley, hops, water and yeast.
Stone’s choice of Germany, the proverbial land of beer, for its base of operations in Europe may seem foolhardy to some, but Mr. Koch is confident that his company’s beer will find welcoming palates among the country’s beer-loving public.
While most of Stone’s beers qualify under the Reinheitsgebot, his brewery is not beholden to it. Mr. Koch said the law “struggles for relevance” in this day and age, adding that the rigid interpretation of it has to a great extent hindered the adoption of new beer trends and beer-making techniques in Germany. While most U.S. craft beers would qualify under the purity law, they still offer a broad range of flavors and styles, he points out. “You can’t blame the Reinheitsgebot, but you can blame the mentality that uses the Reinheitsgebot like a crutch.”
Mr. Koch likens beer brewing to making music: using the same basic instruments, you can play anything from classical and jazz to country, pop or rock. “The difference isn’t so much the instruments, it’s how you use them. I think of authentic German beers as the classical music of beer — traditional, storied, developed over long periods of time, artistic, nuanced and refined. With our craft beer, we’re more rock ’n’ roll. We’re louder, we use our instruments differently.”
Mass-produced industrial beer, however, is more like elevator music, Mr. Koch said with contempt. “It’s classical music that has been dumbed down, computerized, homogenized — all the soul is gone from it. It’s made as cheaply as possible and as high-volume as possible.”
Seeking to make that very point last year at Stone’s launch event at the new Berlin site, Mr. Koch, manning a forklift, dropped a boulder on a pallet piled with beer bottles. The move drew unintended criticism for what appeared to be an attack on German beer. “It was widely misreported,” says Koch, stressing that what he smashed was a collection of industrial beers from around the world.
“I didn’t damage a single beer by dropping a boulder on the pallet. The damage and the insult had already been done at the breweries. If you make muzak out of Chopin or Tchaikovsky or Handel, or out of the Beatles, you’re insulting the original music. These industrial beers insult the category of beer.”
Ed Meza is a freelance journalist writing about Europe. To contact the author: [email protected]