The two began brewing beer together, toying with the idea of opening their own brewery.
“This was, I think, ’92. We talked about it and planned and did research…over a span of several years. I analogize it to climbing a mountain of knowledge, then walking along the top edge for a while, looking down, and not being sure whether or not to take the leap to the other side, saying, ‘I don’t know, it looks pretty rocky down there.’ Eventually, we did it.”
Steve and Greg weren’t sure whether they wanted a production brewery or a brew pub. They were also on the fence over location.
“I didn’t want to stay in L.A. I was done with the music industry and was completely enamored with beer. Steve was living in Portland and didn’t want to move back to L.A., either.”
On a beautiful weekend in late March 1995, Koch drove down to Solana Beach to attend a friend’s party. “I called up Steve and said, ‘Hey, how about San Diego?’ He said, ‘I like San Diego.’”
In May, Koch moved into a Solana Beach condo and began the search for a warehouse for their brewery. In October, Wagner moved south as well. They began brewing test batches in Koch’s condo and later leased the space in San Marcos where Lost Abbey is now. They’ve since outgrown that location and moved operations to a larger facility in Escondido.
“Where Lost Abbey has their bottling line is where my desk used to be. We took occupancy the beginning of February ’96. I was able to bring in some money I had saved up from my business [Creatively Downtown Rehearsal]. I lived very conservatively. My father also made an investment. That was our seed money. We built the brewery and released our first beer on July 26, 1996.”
When the reality set in that they were in fact owners of a brewery, Koch worried over how to sell their beer. The year that Stone Brewing opened, craft-beer brands were on a downward spiral.
“We opened at a time when people didn’t want craft beer. It’s hard to think about today. Especially now, when someone can open a little warehouse in the middle of a pain-in-the-neck-to-get-to portion of San Diego and have people waiting in line.”
In 1996 retailers were discontinuing craft brands and carrying imports in their place. The bottom of the industry fell out, and the craft-beer bubble burst. As a result, Stone Brewing Co. lost about $30,000 each month during their first year of operation.
“I was, like, Oh, shit. I have a brewery. We’re making beer, and we’re putting that beer into kegs. I suppose I have to sell it. I had zero experience. I started going around to bars and restaurants. I think one of my arms is longer than the other from carrying a keg around with me. I would be kicked out of bar after bar after bar. The polite version would be them patting me on the head and saying, ‘Sorry, kid, my customers don’t drink that kind of beer,’ or ‘Don’t you know that micro-brews are dead?’ The not-uncommon version was being yelled at when I told them I wasn’t going to give them a free keg, because that’s illegal. The beer industry is known to sometimes be ethically challenged.”
The first keg Stone Brewing sold was to Solana Beach’s Pizza Port.
“I remember going to Pizza Port that first night and seeing Stone Pale Ale up there on the tiles. A Japanese couple bought the first pitcher. I went up to them because I was so excited. I was waiting to talk to someone who would say, ‘I heard about this beer. I read about it in the paper, and I’ve really wanted to try it!’ There was none of that. When I asked why they bought the beer, the man stammered out in broken English that he liked the name. He thought it was interesting.”
The name, Stone Brewing Co., was not hit upon easily. Koch and Wagner tossed names back and forth for years.
“In retrospect, some of the names don’t look so good — like, Old Shoe Brewing Company, Midnight Brewing Company. The one I was really pushing for was Kushenbogner’s Sublime and Beautiful Great California Paradox Ale Brewing and Trading Company, Incorporated. The idea was for it to be a point of pride to someone who could actually say it. I thought we could develop a bit of a culture around that.”
There is indeed a culture around Stone Brewing Co. They have 99,402 Twitter followers, 200,641 Facebook likes, and 22,276 Instagram fans. They went from selling 960 barrels in 1996 to 177,200 barrels in 2012. They are the tenth largest craft brewery in the United States.
While Koch wouldn’t confirm his salary or how much Stone Brewing Co. made last year, over on Stonebrewing.com they project that in 2013 Stone will sell 210,200 barrels.
At this point, Koch is not pushing his company toward a goal or figure. He says his focus has always been — and will remain — on producing quality beer.
“I wondered, back in our early days, if we could ever become as big as Anchor. I had so much respect for them. [Anchor] was my first real beer, and I looked at them as a model. In the last 15 or 20 years, they did something like 90–100,000 barrels a year. We actually surpassed them a few years ago. It caught me off guard. It felt like we were in uncharted territory because I looked at them as this thing, off in the sky, to shoot for. When you find yourself on the other side of it, you think, Okay, now what? I don’t think it’s relevant for us to pick a point in the sky to go for. Instead, the way we operate is that we focus on what we do. That’s our ideal.”
As for all the breweries popping up around San Diego, Koch is optimistic.