21st Amendment Brewery Plans to Build $21 Million Production Facility

San Francisco’s 21st Amendment, which began producing beer under contract at Minnesota’s Cold Spring Brewing Company in 2008, is coming home.

On Tuesday, 21st Amendment — a brewpub originally founded in 2000 by Nico Freccia and Shaun O’Sullivan — announced plans to build its own, $21 million brewing facility this year.

“Shaun and I wanted to build a brewery as far back as 2005 when we were first beginning to talk about expanding the business,” said Freccia. “We had been looking around for a place in the Bay Area to build a larger production brewery but there were a lot of compelling reasons, like the economic climate, to not start down that path.”

The beer company, widely recognized for its distinctive Americana packaging, plans to open the 95,000 sq. ft. production facility in San Leandro later this year. Initial capacity at the brewery will be approximately 100,000 barrels, the company said.

21st Amendment’s new brewery, which is being financed through a combination of bank loans from Union Bank and available cash flow, will be built in two phases, Freccia said. Phase one, which will cost about $18 million, includes the installation of a 100-barrel, four-vessel GEA/Huppmann brew house, a KHS packaging line capable of filling up to 500 cans per minute, corporate offices and a tasting room.

Phase two, which Freccia hopes to begin once the facility is up and running, will include a restaurant, retail shop and event space, and is estimated to cost $3 million. In time, 21st Amendment will eventually be capable of producing upwards of 300,000 barrels annually.

Moving Beyond the Brewpub

Nico Freccia

In 2005, when Freccia and O’Sullivan began their initial search for a contract brewery partner, plenty of manufacturers like Stevens Point Brewery in Wisconsin, Schell’s Brewery in Minnesota and F.X. Matt Brewing in New York had excess capacity and were taking orders.

21st Amendment had its pick of the litter and eventually ended up signing a contact agreement with Cold Springs Brewing. In 2008, the brewery started selling cans of its popular Brew Free! or Die IPA and Hell or High Watermelon beers.

“It was a good way for us to get our beer out into the market in cans and without a lot of investment,” Freccia said.

A few years later, when Freccia went looking for additional contract brewing space, capacity had almost completely dried up.

“We called Stevens Point, F.X. Matt, LionsÔǪthey were all full,” he said. “A couple years earlier they were calling me.”

But before pulling the trigger on a facility of their own, Freccia and O’Sullivan continued the contract search. They tested batches of beer at Memphis, Tenn.-based City Brewing in 2012, but eventually opted not to move forward with full-scale production.

The company even explored opportunities with the recently founded Two Roads Brewing in Conn., and other yet-to-launch contract manufacturing companies.

But there was no vacancy.

It had become clear that if 21st Amendment was going to continue growing, Freccia and O’Sullivan needed to take control of production.

“We have been struggling to meet capacity demands since day one,” he said. “Even after Cold Springs built a new brewery (Third Street Brewhouse) two years ago, it was clear that they weren’t going to be able to keep up with all of our demands.”

Those demands included wish-list projects like barrel-aging, sour beers, small-batch offerings, variety packs and larger production runs.

“When you are trying to make something as delicate as craft beer, you really need control,” Freccia said. “It is hard to maintain that control when you are 1500 miles away.”

Looking Towards the Future

21st Amendment is aiming to produce 70,000 barrels of beer in 2014 and, despite building its own brewing facility, plans to continue its contract partnership with Cold Springs.

“We started off by hand brewing our beer at the pub and that is who we are as a company,” said Freccia. “We are getting back to that but we will continue working with Cold Spring as long as it makes sense for us, our markets and our customers.”

The added capacity will coincide with aggressive growth plans for the company. By 2018, the brewery hopes to be making about 200,000 barrels of beer per year and will likely be selling in new markets like Southern California, Texas, Florida, Chicago and Michigan, Freccia said.

“If you aren’t growing you are dying,” Freccia said, quoting Sierra Nevada founder Ken Grossman. “We aren’t looking to grow this brand to be the biggest craft brewery in the country or the world, we just want to come full circle.”

21st Amendment will be growing and competing with other well-established Bay Area craft breweries like Petaluma’s Lagunitas Brewing and San Francisco’s Anchor Brewing, both of which are expanding their own production capabilities.

Lagunitas is nearly finished constructing its Chicago brewing facility which, when complete, will be capable of producing upwards of 1 million barrels annually. Meanwhile, Anchor Brewing is constructing its own secondary facility, which will quadruple capacity to 680,000 barrels.

Nonetheless, Freccia said he’s up for a challenge.

“You can’t sit around and say ‘who is my competition and what are they doing?’” he said. “You aren’t competing with those other breweries. You are competing with the consumer and the retail buyer. At the end of the day, you have to have amazing beer and a story to tell. If you believe that is there, there will always be someone that wants to carry you.”

Brewbound Job Board

The leading job board for the beer industry. Featuring hundreds of jobs from leading breweries and associated companies.

Brewbound Marketplace Listing

The Brewbound Marketplace features listings for equipment, services, and more. Post a listing today.

Brewbound's Database of Breweries

Brewbound's database of breweries includes thousands of breweries from around the world.

Brewbound Podcast

The Brewbound Podcast features interviews with beer industry executives and entrepreneurs, along with highlights and commentary from the weekly news. New episodes every Thursday.