LETTER FROM THE PUBLISHER Visit To Chico It's always a pleasure to see someone doing well in the industry. That appreciation is enhanced when that someone is doing exceptionally well. Beer has been very, very good to the Sierra Nevada Brewery in Chico,CA. From its inception, Sierra Nevada has been a darling in the industry, one that everyone talks about with the intensity and passion of recalling an old girlfriend, a classic car, or favorite sports team. My trip to Chico last month to visit Sierra Nevada was a memorable experience. In a year of reporting on public trading, regulatory petitions, and competitors' squabbling, it's a treat to be around people who are so focused on what they're doing that it doesn't matter what the competition is doing. The Sierra Nevada team has a philosophy, in fact, of doing its job to the highest possible standards and not worrying about what competitors are up to. Do your best and the world will beat a path to your brewery. I wouldn't be the first person to acknowledge that fact, but it's a reality check to see at first hand why Sierra Nevada has received such media attention and consumer loyalty since they began in 1979. They're a class act. . . Inside This Issue Special Report: Sierra Nevada Oregon Craft Sales Hit 8.9% Spring Street Suspends Web Trading Reality Check: Palo Alto Return to Back Issues List Subscribe to The Erickson Report

SPECIAL REPORT SIERRA NEVADA INSTALLS $2 MILLION PACKAGING PLANT; WILL EACH 250,000 BARRELS IN 1997; NEW BREWERY PLANNED FOR 1997 Sierra Nevada Brewery is doing what it has always been doing -- producing high-quality, distinctive beers and selling them like crazy with barely a speck of advertising or expensive marketing. They're in the enviable position where everyone else wants to be -- managing high growth without the distraction of public offerings, expensive advertising, or marketing gimmicks. Sierra Nevada has developed this cult following through what they put in the bottle. No balloons and bands. No pretty girls flashing million-dollar smiles. No trendy beer styles appealing to the flavor-of-the-month crowd. Just high-quality traditional beer styles with generous amounts of expensive hops and malts and produced with impecable quality control procedures. "We've let the market decide our production, without big promotions or marketing," marketing director Steve Harrison told the Erickson Report in an interview at the brewery. Harrison was the first employee hired by Ken Grossman and Paul Camusi after the company started in 1979. Grossman and Harrison had grown up in Southern California, and when Grossman told him he was going to start a microbrewery, Harrison eagerly volunteered to join the startup venture. . . CRAFT BEER SALES REACH ASTOUNDING 8.9 PERCENT OF SALES IN OREGON Revealing just how strong the craft brewing industry is in the Northwest, recently released figures from the Oregon Liquor Control Commission indicate that the state's craft brewery sales are an incredible 8.9 percent, with the majority coming from the state's popular local breweries. Widmer Brothers leads the state's craft breweries, selling 34,880 barrels for 1.59 percent of sales and ranking eighth after the megabrewers. Anheuser-Busch leads sales with 699,802 barrels for 31.2 percent, Pabst at 366,953 barrels or 16.6 percent is second, Coors with 335,097 barrels and 14.9 percent is third, and Miller is fourth with 257,634 barrels and 11.6 percent. . .