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Stone Brewery CEO goes local

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While many small company-CEOs dream of expanding across the nation, Stone Brewing Co.’s Greg Koch, wants the opposite.

For the past 13 years, his company has grown from a little brewery producing 400 barrels of beer in its first year to 88,000 in 2008.

Currently, Stone beers can be purchased in 31 states and plans to move into another two this year.

However, with all this growth, Koch told students at CSU San Marcos’ “In the Executive’s Chair” class he’d rather sell more beer in five states than get spread out across the nation.

The downsizing how many states the beer ships to might seem strange, especially when his company was named number one Beer Advocate.com’s All-Time Top Breweries on Planet Earth list last year, but Koch said it makes perfect sense when looking at the big picture.

“I think this is a better model to support,” he said. “Certainly the commodity stuff needs to stop shipping back and forth.”

He used the example of how the U.S. imports millions of pounds of potatoes, while simultaneously exporting millions more.

“It just doesn’t make sense,” he said.

Part of the way to prevent the unnecessary shipping is to purchase locally produced items.

The brewing company does its part by purchasing food that is locally grown or raised for its restaurant, Stone World Bistro & Garden.

Koch said it is the largest buyer of local organic produce in the county.

Koch asked the class to guess what market percentage craft brewing had compared to all other alcoholic beverages. Students shouted out answers from 6 percent to 15 percent, while one guessed 2 percent.

The craft brewing sales share as of December 2008 are only 4 percent, worldwide, but Koch said the higher guesses showed optimism in people’s perceptions of craft beers.

“The reason for it is it has captured the hearts and minds of people in a disproportional manner, and that’s another reason why we’re on this upward curve” of sales, he said.

The worlds of food, beer and wine have embraced variety over generic within the past few years in particular, Koch said.

He gave the example of how a few years ago, one would have perhaps three varieties of Swiss cheese available, but today one can go to a store and find everything from Kraft to artisan brands.

“I don’t think we’re ‘taking advantage’ of this movement,” he said about people leaning toward specialty products. “We’re helping create it.”

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