A Tale of Two Breweries

Tony Magee started out brewing his beer at home. He opened Lagunitas Brewing Company in Petaluma California in 1994. The brand grew quickly and became well known not only for beer but its support of non-profit organizations in Sonoma and Marin counties. Donated Lagunitas beer could be found at most fundraisers in the area. The Petaluma breweries also offered casual dining in a low-key atmosphere with friendly staff and live music at its adjacent outdoor venue.


Lagunitas opened a second production facility in Chicago to serve expanding demand in other parts of the country, a taproom in Seattle and plans for another brewery near Los Angeles. Informed guesses put the company’s total value at a billion dollars when Heineken International bought a fifty percent stake in 2015, giving Magee – and his couple-dozen investors – a sizable payday. Tony Magee said it was really a strategy to use Heineken’s resources to bring Lagunitas to the rest of the world.

Heineken may or may not be the world’s largest brewer. Depending on who made what most recent acquisition, either Holland-based Heineken or Belgium’s Anheuser-Busch InBev (think Budweiser) is the largest as you read this. Magee assured every one that Lagunitas would continue to operate independently. “We’re not working for Heineken, we are working with,” he said.

Magee sold the rest to Heineken in 2017, or as Magee put it, “tearing down the walls to tap into the resources of Heineken.”

Lagunitas announced on October 2 this year that it was cutting loose more than 100 employees, twelve percent of its workforce. “The craft beer market is rapidly evolving and, in many ways, more challenging. More breweries, more choices,” said CEO not Tony Magee.(Anheuser-Busch InBev recently fired 380 people – ninety percent in its High End” sales force. Think Widmer, Redhook.) Heineken owns 165 breweries worldwide and certainly thinks it can brew Lagunitas beer anywhere. Lagunitas is now one name in its brand-management portfolio.

Fifteen miles from Petaluma, up Highway 101 in Santa Rosa, things are going well for the still small Russian River Brewing.

Sparkling wine maker Korbel decided to get into the craft beer business and opened the Russian River Brewery on its estate in 1997. They decided to get out of the beer business five years later and sold the operation to brewmaster Vinnie Cilurzo and his wife Natalie. In 2004, the Cilurzos moved their operation from Korbel’s Guerneville property to downtown Santa Rosa.

The Russian River Brewery quickly became a popular gathering place, drawing a diverse crowd of beer and pizza aficionados. Popularity becomes craziness every February when the brewery releases its once-a-year super-hopped, ten-percent-alcohol IPA named Pliny the Younger. (Pliny the Elder is available year round.) The brew is available for a couple weeks each year and beer fans from around the country, the world, wait hours on line to taste it.

The Cilurzos resisted expansion temptations, saying they preferred to grow organically, without taking on debt or outside investors. They finally gave in though, took some bank financing, and made plans for a new facility.

The Cilurzos’ shiny new brewpub has just opened on the northern edge of Santa Rosa, in the town of Windsor. The $50 million investment is the equivalent of loose change found in between Heineken’s sofa cushions, but represents a huge investment for the husband-wife owners.

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