It has been two years since Sapporo USA announced its purchase of Stone Brewing. At the time of the acquisition, the latter was the largest brewery by production volume in San Diego County, and seventh among the nation’s independent craft breweries per statistics compiled by U.S. trade organization, the Brewers Association (BA).
Since that deal closed in August of 2022, Stone’s production has not slowed but rather increased as its manufacturing facilities in Escondido and Richmond, Virginia, have begun to produce Sapporo products. Such was the motivation for the Japanese corporation to acquire an American beer company with bicoastal brewing sites, allowing for domestic production of Sapporo beer in an effort to boost U.S. sales and, ultimately, overall brand presence.
Upon its acquisition, Stone’s total annual production capacity stood at roughly 350,000 barrels, enough to rank Sapporo-Stone Brewing the 12th largest among all beer producers (not just “craft” as defined by the BA) in the country. As impressive as that is, greater brewing capabilities will be necessary for the company to achieve its ultimate goals, which includes moving all current production of Sapporo beer from Canada and Asia to the U.S. Thus, Sapporo-Stone has embarked on a $60 million, multi-phase expansion project that includes upgrades to its facilities on both coasts, starting with Escondido.
As part of an open-house-style press conference earlier today, Sapporo-Stone Brewing officials unveiled phase-one improvements at the company’s North County headquarters. Coming in at $20 million, they include installation of additional fermentation tanks and establishment of separate packaging lines for cans and bottles (save for Sapporo’s 22-ounce chalice cans, which will come from the company’s Richmond facility) at Stone’s Escondido campus, which consists of a pair of brewing and packaging buildings as well as a distribution warehouse. Other West Coast assets include warehouses in San Marcos and Downey, Stone Brewing World Bistro & Gardens restaurants in Escondido and Point Loma’s Liberty Station development, stand-alone taprooms in downtown San Diego, Oceanside and Pasadena, and a pair of locations at the San Diego International Airport.
Sapporo-Stone intends to complete another $40 million worth of improvements at its East Coast facility sometime this fall, at which point the company’s maximum annual barrelage will be 700,000, double what it was prior to the acquisition. Sapporo-Stone management hopes to move the company into the top 10 U.S. breweries by volume. But production capability and sales are two different things.
The company acknowledges that it is – and will likely remain – difficult to achieve growth in a beer market that is currently more challenging than arguably any time in the modern craft-beer era. That said, management feels the company’s “craft-meets-import” portfolio sets it apart and provides multifaceted opportunities for increased sales, noting gained shares in both the craft and import categories. This is particularly true of the import category, where sales of Sapporo – the top-selling Asian beer brand in the U.S. for the past 38 years – were up 13.1% year-over-year according to NielsenIQ scan data. But Sapporo has long desired to be regarded as more than an “Asian beer” or “sushi beer”, and sees the U.S. as its greatest potential market for growth.
Since the acquisition, Sapporo has been almost single-mindedly focused on fine-tuning the brewing of its Japanese-born brands at the Escondido and Richmond facilities, allowing Stone’s management team to manage its venues and production of its portfolio of beers without its parent company perched judgmentally atop its shoulder.
Stone Brewing is among the world’s most recognizable and celebrated craft breweries. We admire the team’s innovative spirit, passion and world-class brewing expertise. We are proud to continue the legacy of Stone and honored to have this full team’s commitment to the Sapporo brand. We are stronger together, and proud to be a growing San Diego business.”
Hiro Kitaoka, Chairman, Sapporo-Stone Brewing
The company reports that, over the past year-and-a-half, Sapporo-Stone has added 125 jobs locally and another 75 elsewhere. The two companies now employ a combined 850 team members, roughly 600 of whom are located in San Diego County. Additionally, more than 150 existing employees have been promoted or transitioned into expanded roles since the acquisition.
“Our two companies are now fully integrated – innovating, brewing, selling, marketing and operating as a single, combined business,” said Zach Keeling, who is serving as Sapporo-Stone’s interim CEO following the January departure of former CEO Maria Stipp, who was with the company in that capacity for over three years and oversaw its sale. “The Sapporo and Stone Brewing brands will maintain their individual identities, but we are Sapporo-Stone in name, operations and culture.”
In another sign of the two entities coming together, Sapporo beer is now available, side-by-side with Stone IPA, Arrogant Bastard Ale and the like, at all of Stone’s restaurants and taprooms.
Sapporo-Stone Brewing’s headquarters is located at 1999 Citracado Parkway in Escondido