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Stone Brewing Co. has big expansion plans on tap

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Greg Koch, chief executive officer and co-founder of Southern California’s largest craft brewer, Stone Brewing Co., has an unconventional approach to growing his business: “Ignore everybody and do it the way you feel it should be done.”

Some people strive only for mediocrity, while others work toward distinctive excellence, according to Koch.

“You may suck at being mediocre, but if you suck at being unique and special, at least you enjoyed it,” Koch said in a recent interview. “What if you’re very good at being unique and special?”

Koch’s reasoning has served Stone Brewing well. The Escondido-based company has experienced year-over-year annual growth for the last 15 years, and is on track for 20 percent growth this year, he said.

Stone Brewing brewed 115,000 barrels of craft beer last year, and expects to brew between 150,000 and 155,000 this year, said Koch.

Greg Koch, CEO and co-founder of Stone Brewing Co., has always had an unconventional approach to doing business. Photo courtesy of Stone Brewing Co.

That kind of growth is necessitating a multi-pronged expansion for the Stone Brewing business, originally estimated in May to cost about $26.6 million. “And then we sharpened our pencils,” Koch said in early-August. “We don’t have an official number right now. It’s that old adage of take a number and double it.”

The most near-term project is a kitchen expansion at Escondido’s Stone Brewing World Bistro & Gardens, to begin as soon as September, according to Stone Brewing spokesman Randy Clemens.

Koch said the bistro kitchen expansion is awaiting city permits. The kitchen will grow by 1,200 square feet from its current 1,400-square-foot size, allowing for more elbowroom, prep space and equipment, he said.

“This is not really something the public will notice,” Koch said of the kitchen expansion, noting the extra square footage is a necessity.

An aerial rendering shows Stone Brewing Co.'s expansion plans in Escondido, which includes a new headquarters, a 50-room hotel, enlarging the bistro kitchen and creating space to produce more barrels of beer. Image courtesy of Stone Brewing Co.

Also on Stone Brewing’s to-do list: a new 400-seat restaurant in Point Loma’s Liberty Station, a new beer shop in South Park and the eventual expansion of its newly acquired Stone Farms -- an 18-acre organic farm about eight miles north of the Escondido brewery. The farm will someday include space for events and educational programs.

Perhaps the most visible of Stone Brewing’s expansion plans in North County will be adjacent to the Escondido brewery, on lots purchased in January. A new 55,000-square-foot building will be used for packaging and cellar space, increasing the company’s brewing capacity to 400,000 to 500,000 barrels annually, according to company estimates.

Across the street from the brewery will be a 50-room specialty hotel with event space, a barrel-aging room, a catering kitchen and about 15,000 square feet of additional office space. Stone Brewing officials said a hotel near the brewery makes sense because the Escondido brewery and its bistro are considered the third largest tourist destination in North County. The hotel is tentatively estimated for completion in 2013.

Koch said the hotel project is in the design phase. “Fortunately, we have a city that is excited about these projects and wants to make sure we can execute them,” he said.

“We promise that the hotel will be as unique to hotels as Stone Brewing World Bistro & Gardens is to restaurants,” Koch said.

The architecture will likely be “rustic elegance,” he said, with simple and artful uses of concrete, steel and wood.

El Cajon-based Hamann Construction has taken a lead role in Stone Brewing’s expansion plans, though Koch said Stone Brewing isn’t ready to formally announce which firms will be handling the various architecture, design and construction details. Stone Brewing has previously worked with San Diego firms David Robinson Design and Schmidt Design Group.

Koch acknowledges that it’s ambitious to take on so many expansion projects at once, particularly amid a shaky economy. But he said Stone Brewing has been able to outpace the economy and its competitors in the craft brewing industry in part because he has an aversion to “safe choices.”

Said Koch: “If I’m going to take any credit for anything, it will be for feeling bold enough to make decisions that others don’t feel they can make. They think they have to make the decision that the masses think they should make.”

McEntee is a San Diego-based freelance writer.

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