Craft Breweries Scale Up But Keep It Real

IF WE KNOW a craft beer when we see one, we have Sierra Nevada to thank. From the squat brown bottles with labels depicting sylvan scenes to the bitter-pine and citrus flavors of West Coast hops, this pioneering brewery in California’s Central Valley set the tone.

These days, though Sierra’s bottles are still stubby, they whir down the line thousands at a time. Sixty-foot-tall fermenters frame the namesake mountains. And on Aug. 3, a $110 million brewery will open in Mills River, N.C., 2,500 miles from those peaks.

Craft beer is at a turning point, and Sierra Nevada is once again its pivot—a new kind of craft brewery, demanding a new definition of the term. The onetime upstart’s million barrels a year may not quite rival the nearly 100 million produced annually by Anheuser-Busch InBev, the world’s largest brewer, but it’s a long way from the 10,000 or so Sierra was putting out in the early years

As defined by the Brewers Association, a craft brewery produces fewer than 6 million barrels a year. Sierra makes the cut; Boston Beer Co., maker of Samuel Adams, does too, at almost 3 million. But size matters, according Paul Gatza, the Association’s director. “At as little as 15,000 barrels, breweries start behaving differently,” he said. “Maybe they hire a dedicated sales or human resources person. They act more sophisticated.”

For some beer geeks, that’s a problem. The hippest bartenders in brewing meccas like Denver and Portland, Ore., observe an unofficial law: They only serve beer from breweries they can see from their front door. But in less saturated locales, the growth of breweries like Sierra Nevada is welcome news.

When Paul Camusi and Ken Grossman started Sierra Nevada in the early 1980s with a cobbled-together brew system and $100,000, they struggled to educate drinkers raised on mass-made suds that good things could come from small breweries. Now, one’s first beer might well be a Sierra Nevada Pale Ale—which represents 60% of the company’s sales—and the brewery is doing all it can to make sure it’s perfect. “I have to respect those big breweries,” said Brian Grossman, Ken’s son and co-manager of Sierra’s Mills River location. “Making sure every bottle tastes the same—that’s hard to do.” Transporting beer fresh, fast and refrigerated costs Sierra more than $4 a case in some instances. “Beer is heavy [liquid] in heavy containers, and it costs a lot to move it over the Rockies,” the younger Mr. Grossman said. As the brewery moved more and more beer, it made sense to start brewing out East.

Other craft brewers have seen their flagship brews become corner-store staples from one coast to another and, like Sierra, are growing apace. Fort Collins, Colo.-based New Belgium will soon make its famous Fat Tire at a second, 18-acre site in Asheville, N.C. Another Colorado brewer, Oskar Blues, maker of Dale’s Pale Ale, has a plant in Brevard, N.C. Stone Brewing Co., headquartered in Escondido, Calif., just announced a crowdsourced campaign to fund an East Coast brewery, as well as plans for a brewpub in Berlin. Meanwhile, Northern California’s Lagunitas Brewing Company is building in Chicago, owner Tony Magee’s hometown and a transportation hub.

Now, instead of convincing the public that good beer can come in tiny batches, the challenge is proving that it can be produced in quantity without losing its soul. And keeping these flagship craft brews consistent across millions of barrels requires another sort of creativity. “It might look like the same old Pale,” Brian Grossman said. “But it could have a new cap liner, or new packaging to improve shelf stability.”

Which is why it’s beneficial all around that brewers like Sierra Nevada are still in the craft category, said Mr. Gatza of the Brewers Association: “They shouldn’t be punished for being successful. They bring expertise that all craft brewers are benefiting from.”

Scott Jennings, head brewer at Sierra’s new facility, said, “I don’t see other craft brewers as competitors, I see them as colleagues.” He shared the secrets of his Torpedo hop-infusing machine with California’s Firestone Walker. And Sierra’s annual Beer Camp Across America brings brewers and drinkers together at festivals around the country that include collaborative brew sessions on Sierra’s small-batch system. This year’s tour kicked off with the release of a case of partnership beers made with a dozen different breweries. New Belgium, too, plays big brother to scrappier outfits like Indiana’s 3 Floyds Brewing Co. Their latest joint effort resuscitated a once-forgotten wheat beer called Grätzer, introducing drinkers to an ancient style and an unfamiliar brewer at the same time. “We have a responsibility to build momentum in the industry,” New Belgium’s marketing director Josh Holmstrom said. “Sometimes that means helping smaller brewers build their brand.”

So, as these breweries grow, and their flagship beers sail ever farther, they’re better able to foster pet projects. Sierra Nevada’s new brewery will allow them to create more of their Pale Ale while making room at both facilities for smaller-scale experiments. “For the past few years there was a perception that we haven’t been that creative, but we’ve just been strapped,” Mr. Jennings said. “Now we’re able to get back to our innovative roots.”