Stone Brewing co-founder: What’s next in craft beer after 25 years?

Stone Anniversary 25 Triple IPA in the garden area of Stone World Bistro at Stone Brewing on Thursday, Aug. 5, 2021 in Escondido, CA. (Eduardo Contreras/San Diego Union-Tribune/TNS)
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Mike Freeman The San Diego Union-Tribune (TNS)

President and original brewmaster Steve Wagner sees craft brewers continuing to innovate as consumer tastes shift away from strong IPAs and toward better-for-you beers and lighter seltzers.

SAN DIEGO — Steve Wagner got started in the craft beer business in the usual way — first as a fan of robust beers, then as a home brewer and eventually as an employee hauling hops and sterilizing tanks at a production brewery.

What’s unusual, though, is how far Wagner’s journey in the craft industry has taken him.

Now 63, Wagner is co-founder, president and the original brewmaster at Stone Brewing, which he and partner Greg Koch grew into the ninth-largest craft beer maker in the U.S.

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Stone produced 347,000 barrels of beer last year (each barrel equals 31 gallons.) It employs about 800 workers, mostly in San Diego County. This month, it celebrates its 25th year anniversary with a series of events at its local taprooms and bistros.

Stone wasn’t the first craft brewery in San Diego by any means, nor was it the first to brew strong, hoppy India Pale Ales that the region is known for.

But it was an early leader in brewing and bottling a high-powered West Coast-style IPA year-round. That move helped cultivate San Diego’s cachet as a hotspot for interesting craft beers, particularly IPAs.

“Shortly after that, we started sending our beer into Arizona and additional states, and that helped develop the reputation of San Diego,” said Wagner. “I think we were successful at creating a good buzz about our brewery and our beer to spread the word, to get people to come to San Diego and come to Stone.”

As a homage to its heritage, Stone recently released a Stone 25th Anniversary Triple IPA with a 12.5% alcohol kick.

Easygoing and thoughtful, Wagner had a career before craft. He played bass in a modestly successful punk-folk fusion band based in Los Angeles. Called The Balancing Act, the band cut a couple of albums and toured.

As a member of a touring band, Wagner could ask show promoters for certain backstage perks. “Me and the drummer — the two guys who liked beer — would ask for some local beer, whether that was a regional beer or if there was any craft beer available at that time, which there wasn’t much.”

Wagner and Koch first met in the music business. Koch operated a music rehearsal studio where Wagner’s band practiced.

“As he tells the story, he didn’t know me that well because my band actually paid their rent on time,” said Wagner.

Though they didn’t know it back then, both shared an interest in craft beer. Wagner joined a homebrewing club, and one weekend attended a UC Davis extension class on sensory evaluation of beer.

Koch signed up for the same class. “It was one of those ‘What are you doing here?’ moments,” said Wagner. “And we ended up, over a beer that night, hatching plans to start our own brewery.”

It took a while. Wagner became a brewer at Pyramid Brewing in the Pacific Northwest, which is best known for its Hefeweizens. He pursued the job in part to see whether he liked working in a production brewery.

He did, so much so that he didn’t want to leave.

“It took Greg pushing me,” he said. “My wife and I were living up in Portland. I was working up there and really enjoying it. It took Greg saying, ‘Alright, are we going to do this thing or not?”

They explored possible locations in Southern California and settled on North County. Since then, Stone has expanded across San Diego and on the East Coast.

Along the way, Wagner has witnessed the evolution in the craft industry — including the recent rise of hard seltzers and low or non-alcohol craft beers.

Ahead of Stone Brewing’s 25th anniversary festivities, he reflected not only on the past but also about where craft beer, and Stone Brewing in particular, are headed.

Q: Thinking back to when you started Stone, how was the industry different?

A: We started at probably the worst possible time because it was sort of the first shakeout in craft beer. I think Sierra Nevada started in the 1980s, and a bunch more breweries had come in. Some people, unfortunately, had quality issues with their beer or supply problems. Maybe their heart wasn’t in it. It was more of a money-making thing. So, there was not great quality beer out there, and a lot of frustration among retailers and distributors with not being able to get a consistent supply of beer or a consistent quality of beer.

A lot of distributors were thinking, this is a fad, and it’s on its way out now. It was a tough time because we had to overcome those types of objections.

Q: But there also was a bounce-back when craft really took off again, right?

A: When you’re in it, it was a lot slower than it probably seemed (from the outside.) It was like a five-year overnight success.

Our first year, we were draft only. We only had kegs. And what ended up saving us was the small mom-and-pop restaurants. We would go in there and tell them our story and have them taste our beer. And they would say, bring me keg next week. We’ll put it on tap and see what happens.

Q: You were able to get a following?

A: Yes. They were willing to take a chance on us because they were entrepreneurs themselves. There was a feeling of kinship. And the word kind of spreads in the restaurant business. Everybody watches what everybody else is doing.

Q: Do you have a favorite beer?

A: Stone IPA has always been my favorite beer. We released that on our first anniversary. But I didn’t have expectations that it was going to become a huge seller. The usual reaction back then was, wow, this is so bitter, and it’s so strong. And that’s the way it turned out. It was a slow grower for us. Everybody liked our Pale Ale in San Diego. This was a step beyond for most people.

But you know, people’s palates changed as they got more adventurous and tried different things and then decided they liked it.

Q: And that helped create the wave of IPA popularity that ran for years?

A: It’s still going. It is still the most popular style in craft beer, which is amazing 25 years on.

Q: But tastes have changed again. What do you think when you see the evolution that is happening out there?

A: It is a normal generational shift in a lot of ways. The oldest craft breweries are probably 35 years old. People like me who started these companies and drink this beer are aging and not drinking as much. Young people coming up are interested in different things. Some of their focus is on better-for-you and healthier things, or sweeter things. I think that is normal and healthy.

As a company, we need to decide either we’re going to just keep doing what we do and gradually age out, or we’re going to get interested in other things, too, and expand our potential audience.

Q: So, you embrace this change?

A: Yeah. It’s not as easy as it sounds, but we look at things like the hard seltzer category. We don’t want to be just a follower and jump into this. But is there something that we can do that will raise the bar or that would be really Stone-esque?

And when we looked at that category, it’s very popular. But none of the flavors really impressed us very much. We have an incredible innovation team. We thought that we could probably do something better and raise the bar in this category.

(Stone introduced its Buenavida line of four hard seltzers in the Southern California market earlier this summer.)

Q: The same goes for the beer category, right, with Buenaveza Salt & Lime Lager and the Dayfall Belgian White beers that are different from what you’re known for?

A: Absolutely. Part of that is Maria (Stipp’s) influence, our CEO. She said we have this reputation for doing great things. But we need to continue to grow, and to grow we need to add new fans. So, we need to make Stone a little more approachable in some ways and try different things.

Now, we need to put a unique Stone stamp on it. But let’s try some things that may be in the early days you guys would never have thought of trying. She has really helped Greg and I expand our minds and be open to trying different things if we think there is a good reason to be there.

Q: Do you still homebrew?

A: No. I take that back. I did one batch during the pandemic. My sons, who are in their 20s, finally asked me to teach them how to homebrew because they were home from college and stuck at home.

It was like Dad, can you? I’ve been waiting for 20 years for you guys to ask me. So, we actually brewed a batch of beer, which is pretty cool.

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