Atlanta’s Sweetwater plans westward expansion

SweetWater Brewing Co. says it plans to build its first beer-making plants outside Atlanta — way outside.

The craft beer maker said Friday it is scouting sites for a brewery in the western United States, to be opened in 2017. SweetWater also said it is in the early planning stages for a third brewery in the central part of the nation.

SweetWater has grown into the 18th-largest U.S. craft beer maker by sales volume, with distribution in numerous states, mostly east of the Mississippi River. It recently added New York City and Philadelphia to the sales map.

The planned expansion is being fueled partly by private investors’ cash and the sudden availability of another brewery’s production equipment.

Last year, private equity firm TSG Consumer bought a stake in SweetWater for undisclosed terms. In July, SweetWater named its first formal chief executive officer, Kim Jones, who had joined the company in 2013 from Spanx and Coca-Cola.

SweetWater spokeswoman Tucker Berta Sarkisian said the Atlanta-based company has wanted to reach a wider market, but wanted to build a brewery in new markets to ensure the product is fresh.

“We’ve been looking out west and thinking that building from scratch might be an option,” she said.

SweetWater founder Freddy Bensch recently made a deal to buy the brewing equipment of a Berkeley, Calif., plant that was closed this summer by Pyramid Breweries. That gives Sweetwater the hardware to equip a new plant when it settles on location.

“It’s outstanding equipment,” Sarkisian said, with enough capacity to boost SweetWater’s production by 70 percent, to more than 1 million barrels a year.

SweetWater’s westward trek will be into crowded territory. California alone has 506 craft brewers and 28 large or regional brewers, according to the Brewer’s Association, a trade group. Georgia has 41 craft brewers, including three large or regional operations.

The move follows a similar invasion in the opposite direction by Chico, Calif.-based Sierra Nevada Brewing Co., which opened its second brewery near Asheville, N.C., about a year ago. Sierra Nevada is the No. 3 craft brewer.

Craft brewers have made heady progress at the expense of mass market beer makers over the past decade. Last year, craft brewers’ sales volume increased almost 18 percent, compared to 0.5 percent growth for all beer makers, according to the Brewer’s Association.

Mass market brewers, meanwhile, have been responding by buying or taking stakes in smaller brewers and consolidating through ever-larger mergers. Last month, Anheuser-Busch InBev announced a planned $106 billion acquisition of global rival SABMiller, which if completed will control about a third of the world’s beer production.