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Close-up: Greg Koch

Stone CEO focuses on craft of brewing, sustainability

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Values are as important as barley and hops to the flavor of Stone Brewing Co. While accomplishing growth of up to 47 percent per year, the company has been careful to hold on to its character.

Sustainable practices, whole ingredients and ethical business are among the ideas that drive Stone Brewing Co.'s operations.

"I actually believe that doing the right thing is a good business model," said Greg Koch, Chairman and CEO of Stone Brewing.

Koch co-founded the company with President and Brewmaster Steve Wagner in 1996. The two met briefly in the '80s while working in the Los Angeles music industry. Koch owned a practice-space for musicians and Wagner was a member of a band called The Balancing Act. In 1992 the two were reunited during a weekend class at University of California, Davis, titled "A Sensory Evaluation of Beer." They bonded over their common love of the art of brewing and have been in business together since.

Everyone at Stone Brewing has a tremendous amount of pride about the business and the craft, Koch said. Rather than attempting to "trick or fool" people into buying the product with marketing ploys, the company simply strives to create a high-quality product. Koch sees a culture shift moving companies in many industries toward adopting the philosophy.

"I think we're on the tipping point of seeing people take a different approach to business and life," Koch said.

Americans have begun embracing variety rather than the generic when it comes to food and beer. Take for example the selection of cheeses available at the local supermarket, Koch said. Whereas just a few years ago there would have been three generic types of cheeses, the selection now includes an array of specialty and artisan varieties.

Craft beers are riding high on the popularity of specialty foods. Although craft brewing sales as of December made up only 4 percent of the market share worldwide, people seem to be catching on to Stone's unique blends.

"I don't think we're 'taking advantage' of this movement," Koch said. "We're helping create it."

Thus far, the popularity of Stone's brews have driven a steady increase in production from 400 barrels in 1996 to 88,000 barrels in 2008. Currently, Stone beers can be purchased in 31 states, and Koch has plans to expand into another two this year.

To keep up with demand, the company has similarly expanded its work force from just four employees in 1996 to its current 265.

Ninety-five employees were brought in with the addition of the Stone Brewing World Bistro and Gardens in December 2005. The restaurant operates on Koch's values of whole foods and nutritious ingredients. As a recently elected board member of Slow Foods San Diego, Koch ensures his restaurant serves only organic produce and organic and free-range meats. The facility is also corn syrup-free -- even the soft drinks are made with real sugar.

"When you come to eat here you're coming to eat at my house," Koch said. "I want to treat you as an honored guest and not feed you anything I wouldn't eat myself."

As a member of the San Diego Food Not Lawns movement, Koch also believes in conserving resources. He replaced a portion of his lawn with a vegetable garden to save water, and strives to conserve similarly in his professional life.

Stone Brewing Co. is the largest purchaser of organic produce in the county, Koch said. By eliminating greenhouse gases generated by the process of shipping items such as potatoes that can be grown here is the United States, the company is doing its part.

Stone brewery reduces its energy consumption with a 320-megawatt photovoltaic solar panel installation on the Escondido facility's roof, which ranks in the top 15 percent in the state in terms of size, Koch said. Waste oil from the Bistro is converted to biofuel and used to power one of the restaurant's delivery trucks. Spent grain, a byproduct of the brewing process, is used to feed cattle. The company also filters its effluent before releasing it to the city's wastewater treatment plant. Koch hopes to bring his filtration system up to the city's "reclaimed water" standards, allowing the company to use wastewater to maintain its landscaping.

Such environmental measures, coupled with the popularity of Stone's beers, have catapulted the company to prominence in the international craft brewing industry. Stone was recently named "Highest-rated brewery on planet earth of all time" by Beer Advocate.

In addition to such recognition, Koch has met European brewers who are inspired by Stone Brewing's value-driven business model.

"I've met brewers all over the world who have been inspired by our beers," Koch said.

Reporters Jen Lebron Kuhney and Elizabeth Malloy contributed to this report.

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