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  • Hector Amezcua / hamezcua@sacbee.com

    Brewmaster Jeremy Warren fills a 64-ounce, reusable jug – called a growler – with one of his craft beers in June at Knee Deep Brewery's current site in Lincoln, as customers line up in the background.

  • Hector Amezcua / hamezcua@sacbee.com

    Jeremy Warren, brewmaster of Knee Deep Brewery, peers inside one of the tanks he will use to brew up his distinctive craft beers – like Hoptologist – at the brewery's new 18,000-square-foot Auburn site, scheduled to open later this month.

  • Hector Amezcua / hamezcua@sacbee.com

    Jeremy Warren, right, works on a tank at his new Auburn brewery. His Knee Deep Brewery is moving from its cramped current site in Lincoln.

Out of work, Jeremy Warren followed his passion – craft beers – to launch thriving business

Published: Monday, Sep. 2, 2013 - 12:00 am | Page 1A
Last Modified: Tuesday, Jul. 22, 2014 - 9:23 pm

Three years ago, when Jeremy Warren was being laid off from his corporate job as a health care recruiter in Reno, one of the executives offered him some advice as he headed for the door: Follow your passion.

Warren had made quite the splash with co-workers by bringing in his homemade beer on Friday afternoons. Everyone seemed to agree the beer was a cut above and that Warren had talent.

Warren was 34 at the time, and a home-brewing hobbyist. Suddenly unemployed, he took stock of his options and soon announced to his wife that he was going to make a go of it in the craft beer business.

It was a startling new direction. He had no business experience, no funds, no industry pedigree.

Yet, he stuck to his seemingly quixotic vision even as he went through a divorce. Within three months, he raised $15,000 and started "gypsy brewing" at established Reno-area breweries.

"To get this company started after the divorce, I sold everything I owned except for my car," Warren said. "If it didn't work out, I would have been homeless."

That company is Knee Deep Brewing, now a highly regarded but relatively tiny craft brewing operation in Lincoln, where Warren, the brewmaster and co-owner, took over space and equipment from a defunct brewery in the spring of 2011. In the two years since, he has built a reputation for creating some of the finest and most distinctive beers in the country, including 10 year-round offerings, a variety of seasonal beers and a rotating selection of experimental styles.

Already coveted by beer aficionados, Knee Deep is poised to take advantage of the boom in craft beer and expand beyond many other area breweries by investing $1 million to move from its 960-square-foot digs in Lincoln to a cavernous 18,000-square-foot brewery in Auburn.

Scheduled to open later this month, the new brewery is expected to employ at least a dozen people by next year. In addition to the production area, it will feature a large taproom and patio, designed to become a destination for beer enthusiasts.

Will Wong, the city of Auburn's community development director, said Knee Deep qualified for a $210,000 loan through the city's Community Development Block Grant program when it decided to relocate. To qualify, the brewery committed to making seven new hires by December 2014.

Knee Deep does no traditional advertising, relying solely on social media and word of mouth to connect with customers (check it out online at kneedeepbrewing.com) and get details out about new releases. Even so, it struggles to keep up with demand. This year, the company was able to fill only half the requests for bottled beer from California distributors and almost none of the demand for kegs.

"I have a waiting list of distributors in other states that we haven't shipped a single case to," said Jerry Moore, a former executive in the solar power industry who came out of retirement to invest in Knee Deep and become its chief executive officer. "We can't get it out of these tanks fast enough."

Craft beer accounts for just 6 percent of beer sales nationally but as much as 12 percent of the overall beer market in California, according to the California Craft Brewers Association. It is an increasingly crowded field, with scores of new breweries opening throughout the West to meet the demand for high-quality and sometimes edgy beer styles.

The number of California breweries is increasing, from 380 currently to 400 by year's end. Another 170 are considered "breweries in planning," meaning operations that are about to open or are in the planning stages, according to industry figures. All of them will be fighting to stand out and find a niche.

Knee Deep quickly soars

In a relatively short time, Knee Deep has soared to the upper echelon of the competition. Its beer is pricey: A 22-ounce bottle of Hoptologist, with a blend of four different malts and five hop varieties, retails for $8 or more. The Simtra, an even more robust beer, is $10 to $12, compared to $4.99 for a 16-ounce bottle of the coveted but hard-to-come-by Pliny the Elder from Russian River Brewing.

Moore says the quality and quantity of ingredients justifies those prices. And customers agree.

For 2011, the company's first full year in business, total revenue was $300,000. By 2012, it was more than $1 million, according to figures provided by the company.

Production last year was 1,800 barrels (one barrel equals 31 gallons) and is anticipated to climb to as many as 3,000 barrels for 2013, with 93 percent of sales in California.

By comparison, Sierra Nevada – the Chico-based industry pioneer that is now the nation's second-largest craft brewer behind Boston Brewing (the maker of Samuel Adams) – produced 966,000 barrels in 2012.

Knee Deep says its production and revenues are projected to triple in 2014 from the 2013 totals, and the company plans to distribute its beers in New York, Maryland, Florida, Texas and Illinois over the next 18 months.

Those ambitions far exceed those of many area breweries. Rubicon Brewing in Sacramento's midtown area recently announced plans to expand sales to three neighboring states, but many other breweries are simply struggling to bottle and distribute their products regionally.

Many point to Warren's talent and obsessive way with hops, a key ingredient akin to herbs and spices in a chef's kitchen, for creating beers that stand out from the crowd.

"I think I got my palate from my dad," said Warren, 37. "We would go around trying all these beers, and I always thought there was something missing. I would say, 'OK, this is great beer, but how could I make it better? How could I take it to the next level?' "

He added, "When I designed Simtra (one of Knee Deep's signature beers), that's a bold one. I wanted to have high alcohol, a lot of hop flavor, intense hop aroma, and I wanted to punch you in the face with flavor and push it to the very top. A lot of people don't want to push the envelope because it's unknown territory."

Warren's knack for making a powerful and distinctive style of beer known as India pale ale, or IPA, is key to Knee Deep's growing prominence. With its telltale bitterness and citrus aromas from the extra helpings of hops added during brewing, IPAs are by far the most popular style in craft beer.

"I love what those guys are doing," said Rob Archie, owner of Pangaea Two Brews, the craft beer pub and bottle shop in Curtis Park. "Jeremy really understands how to use hops. The art of brewing hoppy beers is being able to balance the malt body with the hops."

Last year, Warren's Hoptologist, a double IPA that packs a wallop of hoppy bitterness and relatively high alcohol, shocked aficionados when it bested the world-class Pliny the Elder at the prestigious 12th annual Bistro Double IPA Festival in Hayward.

With the help of bloggers and online forums, Knee Deep exploded onto the scene. Everyone wanted to know more. But mostly, everyone wanted to taste the beer.

There was just one problem: The brewery was the size of a two-car garage and, including Warren and Moore, had just five employees.

With customer demand growing, something had to give.

New site to offer tasting

With its $1 million expansion, Knee Deep's new facility, located in an industrial park near the airport, will boast new brewing tanks, a separate experimental brewing system, and a 1,000-square-foot public taproom with 24 handles serving Knee Deep's core beers, experimental offerings and barrel-aged brews.

It will be quite a change from its Lincoln brewery, which offers no on-site tasting experience.

"It's very exciting," said Tom McCormick, executive director of the California Craft Brewers Association. "It's something that we're seeing a lot in the industry as the craft beer category continues to grow at a strong rate."

Moore says the brewery's success rides on Warren's ability to make beers that stand apart from the crowd. Many of Warren's award-winning beers, like Hoptologist, are considered big and bold yet balanced, with more than 10 percent alcohol by volume (compared to 5 percent for Budweiser and 4.2 percent for Coors Light).

"What we're trying to do is not follow," Moore said. "We want to make really good beer, no matter what the style is. We're trying to follow Jeremy's creativity and see where it takes us."

It has been a rapid and risky rise for Warren, who was so determined to make his vision a reality that he had the name of the brewery tattooed on his forearm. The name stems from a beer-brewing session in Warren's garage in Reno: When he opened the door to walk out, he stumbled in snow up to his knees.

That early home-brewing kit? A gift from his former wife, he said.

Despite his rising stature, Warren continues to maintain an everyman touch with his fans. An imposing 6-foot-1 and 265 pounds, he comes across as affable and approachable with the folks who flock to his brewery in Lincoln.

On most Friday afternoons, he can be found standing beneath a shiny, silver tank filling 64-ounce reusable glass jugs known as growlers for devotees who queue up to get a taste of his latest releases.

For a limited release of a new IPA called Hoparillo on a recent Friday, there was plenty of anticipation as the line stretched down the alley. These are the kind of beer lovers who latched onto Knee Deep early on and helped spread the word about the quality of the beer.

"This is my favorite brewery. I love hoppy beers, and (Warren) is the master," said Isaias Herrera, a Roseville resident who works in technical support for AT&T. "I've tried many different breweries, and this is the best.

"They're the next big thing."

Call The Bee's Blair Anthony Robertson, (916) 321-1099.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Blair Anthony Robertson





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