Southend Brewery deal in Charleston was a craft beer coincidence

Tony Magee founded Lagunitas Brewing Co. in 1993. He recently announced he’s becoming a co-investor in Southend Brewery & Smokehouse in downtown Charleston.

California beer entrepreneur Tony Magee swooped into Charleston this past winter to listen to some blues and sip on some brews.

He stumbled upon a business opportunity during his stay.

Magee is founder of Lagunitas Brewing Co., one of the nation’s largest producers of craft beers. He recently announced his Petaluma, Calif.-based company is acquiring an equity stake in what is now Southend Brewery & Smokehouse in the city’s Historic District.

Lagunitas hasn’t disclosed many details about its Lowcountry investment, other than it plans to convert the longtime brewpub and restaurant at East Bay and Queen streets into Lagunitas Taproom and Beer Sanctuary.

“This turn-of-the-century landmark will be a cornerstone location for Lagunitas in the Southeast, offering small-batch beers that are exclusive to the Charleston taproom and brewed in the existing 10-barrel brewhouse,” the company said in a written statement.

As Magee tells it, the deal came together in serendipitous fashion, after he stopped in Charleston for the Brews & Blues Beer Festival at the Music Farm. He traveled from the West Coast to the Ann Street event in late January to both promote the brand and sit in with the band.

“So we got up there and had a ... great time,” Magee, who plays guitar, said earlier this month. “The room was full of people in such a good mood.”

While in town, he also started looking around at local real estate for a possible Southeast outpost for Lagunitas. Nothing of note jumped out — until he left his hotel looking for a place to eat along East Bay Street. He stopped as he approached Southend, housed in an eye-catching three-story former warehouse.

“All of the sudden right in front of me was a brewpub,” Magee said. “It was the last thing I was expecting to run into. What a beautiful old building. ... I was just infatuated with the place.”

He went in, ordered a burger and a beer and was tempted to seek out the owner to talk business but decided against it.

The next day a business acquaintance from the West Coast called with a lead on a downtown Charleston location — it involved none other than the Southend space.

“I said, ‘I just had dinner there last night,’” Magee said.

As it turned out, that acquaintance also happened to know Keith Jones of Pinot Group, which operates Southend, as well as Stars Rooftop & Grill Room and Amen Corner.

“When you run out the permutation of how impossibly unlikely that it — it’s infinitely unlikely that would happen,” Magee said.

The Southend investment reflects a shift by the outspoken Magee, who started Lagunitas in 1993 and once advised craft brewers against expanding to far-flung locations. But that was before the beer industry’s big players and deep-pocketed investors changed the rules by pouring billions into the onetime niche industry.

Magee has said his new philosophy stems from his decision to sell 50 percent of Lagunitas for a reported $500 million last year to Dutch-owned Heineken, which he called “the last of the largest family-controlled ... brewer in the world.”

“I have seen that one way they achieved their own goals of growing Heineken was and is now to co-invest in local brewers around the globe, not to ‘consolidate’ or dominate or reduce competition, but to expand and nurture the opportunities to the benefit of themselves AND their partners,” Magee wrote June 30 in a lengthy blog post explaining the Charleston expansion and other similar investments he has made. “They do this with big brewers and with brewers far smaller than ourselves in all 24 time zones.”

The Southend deal will follow that strategy. For instance, the current management group will remain in place once Lagunitas converts the downtown space to its brand.

“And our marketing people will work alongside theirs to create an experience with all the charms of Charleston,” Magee said.

Lagunitas is joining a thriving and fast-growing craft beer lineup in the Lowcountry. The brewer’s goal is to be “different and complementary,” its founder said.

“The biggest, most important thing is that we become part of the scene there,” Magee added. “We’re not looking to overprint the scene. We anticipate taking in what’s aready happening and learning.”

Contact John McDermott at 843-937-5572.