Heineken buys into Lagunitas; craft-beer purists react coldly

Dutch beer giant Heineken announced Tuesday that it will buy a 50 percent stake of the Petaluma craft brewer Lagunitas Brewing Company. Dutch beer giant Heineken announced Tuesday that it will buy a 50 percent stake of the Petaluma craft brewer Lagunitas Brewing Company. Photo: Liz Hafalia / Liz Hafalia / The Chronicle Photo: Liz Hafalia / Liz Hafalia / The Chronicle Image 1 of / 27 Caption Close Heineken buys into Lagunitas; craft-beer purists react coldly 1 / 27 Back to Gallery

With its hoppy beers and bohemian vibe, Lagunitas Brewing Co. helped shape the culture of craft brewing in California.

Now, the Petaluma upstart has struck a deal with Heineken that will bring Lagunitas into the world of mass brewing that purists deride as Big Beer, with the Dutch beverage giant buying a 50 percent stake in the company.

The alliance, announced Tuesday, will give Lagunitas a pipeline to a global market that it has just started to tap. And founder Tony Magee insists it won’t wreck the nature of a brewing company so non-corporate that state agents once raided its weekly open-house party to bust employees for smoking pot.

“We are what we are,” said Magee, noting that Lagunitas approached Heineken about the deal, not the other way around. “Achieving scale doesn’t change things unless you allow it to change you.”

Fans on Tuesday took to Twitter to voice reservations about the deal, many of them making unkind references to the “skunk”-like quality of Heineken’s beer. But Magee said he had found an ideal partner — an international company still run by the same family of brewers after 151 years.

“None of this is founded on the idea of needing assistance in the United States — this is about the global opportunity,” he said. “Who wouldn’t want to do a pint competition in Cameroon or Vietnam? ... I want to present special beers in France, in Spain, in Mexico and Cape Town.”

Going global

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Founded in 1993, Lagunitas has been growing fast, adding a brewery in Chicago and building another in Azusa, outside Los Angeles. Production last year hit roughly 600,000 barrels of beer, up from 400,000 in 2013. The company, which ranks as the sixth-largest craft brewer in the United States, has started exporting to Canada, Ireland and Japan, and Magee said Tuesday that Mexico would be next.

The deal, whose financial terms were not disclosed, adds Lagunitas and its trademark IPA to Heineken’s globe-spanning portfolio of more than 250 beers and ciders. Lagunitas, which employs 748 people, will continue to operate independently within the United States. More importantly, it will keep its management team, its brewers and its recipes, according to the two companies.

“We recognize and respect the tremendous success of Tony and his team in building one of the great U.S. craft beer brands,” said Heineken CEO Jean-François van Boxmeer. “We look forward to that same team partnering with us to expand Lagunitas globally, so it can reach parts of the world that other craft beer brands have not.”

Craft breweries — those producing fewer than 6 million barrels per year — have seized a growing share of a U.S. beer market long dominated by massive brands such as Budweiser and Miller. Last year, craft breweries accounted for 11 percent of domestic beer sales, according to the Brewers Association trade group. In 2010, their market share was just 5 percent.

That growth has not gone unnoticed by big brewers, who have responded with acquisitions. Anheuser-Busch, for example, has snapped up such smaller labels as Elysium Brewing in Seattle and Goose Island in Chicago.

The purchases have prompted outrage and soul-searching in a craft industry that has defined itself in part by feisty independence.

“It’s a very tight-knit and collaborative community,” said Bart Watson, economist for the Brewers Association, a trade group for craft breweries. “But it’s also a competitive biz, and people understand the advantages that working with a big company can bring.”

Still, plenty of craft-beer fans expressed apprehension online. “Even though the deal looks as good as one can be 4 #Lagunitas, they get their craft beer coolness card pulled, IMO,” said a post from the Perfect Pour, a trio of self-described craft-beer geeks.

Magee, who describes himself as “55 years old going on 80,” had been trying to plot a course forward for Lagunitas, knowing that he wouldn’t lead the company forever. He called Heineken the only global beer brand to remain driven by brewers, rather than “bankers.”

Home-brewed start

Magee started Lagunitas in his kitchen and built it into a distinctly California creation.

In the past, employees and visitors to the brewery’s weekly open-house parties sometimes enjoyed their beer with a joint, eventually catching the notice of the California Department of Alcoholic Beverage Control. Agents staged a raid in March 2005, arrested several party patrons and temporarily suspended the brewery’s license, an incident Lagunitas refers to as the St. Patrick’s Day Massacre.

“We were loose about it, and we figured one day they were going to make us stop it — and they did,” said Ron Lindenbusch, the company’s chief marketing officer, in a video still posted on the company’s website. He was one of those arrested, hands cuffed behind his back.

The brewery commemorated the occasion with a special beer: Undercover Investigation Shut-Down Ale.

David R. Baker is a San Francisco Chronicle staff writer. E-mail: dbaker@sfchronicle.com Twitter: @DavidBakerSF