Ken Grossman is working the taps. Clad in a trucker cap, blue jeans and Keen sandals, the 60-year-old is doling out samples of Hoptimum and Harvest Single Hop, two imperial pale ales made by his Sierra Nevada brewery. For many of 3,300 people who’ve paid $65 to attend the Portland, Maine, beer tasting with 117 breweries, Grossman’s the star attraction.

“It’s an honor to meet you,” says a brewer from Newington, New Hampshire, reaching the front of the line.

A woman in a Hoptimum sweatshirt asks Grossman to sign her copy of his book on building Sierra Nevada Brewing Co. A man from Los Angeles tells him that in 1979 his neighbor, Grossman’s grandmother, gave him a homemade beer the then-budding beermaker had stored there. As he chats up the crowd, his son, Brian, 30, takes over pouring the beer.

The attendees, mostly men in their 20s and 30s, many wearing beer brand t-shirts and some sporting long necklaces of pretzels, represent the core consumer of craft beer, an industry of 2,800 breweries that commands 14 percent of the $100 billion spent on beer in the U.S. each year. When Grossman started, there were just 40 breweries of all stripes in the country, with sales dominated by Budweiser, Coors and Miller.

Source: Sierra Nevada Brewing Co.

Sierra Nevada founder Ken Grossman.

“It’s been a pretty phenomenal last 30 years for the American craft beer industry,” said Grossman in a July interview at his Chico, California, headquarters. He’s gone from storing beer in his grandmother’s fridge to the head of the country’s second-largest craft brewery, becoming a billionaire in the process, according to the Bloomberg Billionaires Index.

‘Enough Money’

Sierra Nevada sold 1 million barrels of beer in 2014 — equal to 331 million 12-ounce bottles — producing revenue of $250 million, according to the company. The brewer is valued at more than $1 billion based on the enterprise value-to-sales and enterprise value-to-earnings before interest, taxes, depreciation and amortization of Boston Beer Co. (SAM), the only large publicly traded craft beer maker.

“Sierra Nevada is good. They’re one of the players for the long term. They’d be worth more than a billion dollars,” said Joe Thompson, president of Independent Beverage Group, a Richmond Hill, Georgia-based beverage industry mergers and acquisition specialist.

Grossman said such valuations seem high to him.

“I didn’t get into the business to try and make a ton of money and I’ve made enough money that I am totally comfortable and don’t want for anything,” he said. He plans to let his son and daughter Sierra, 37, run the company when he’s done.

Beer Billionaires

Grossman is the third beer billionaire to recently emerge in the U.S. Jim Koch, founder of Sam Adams parent Boston Beer Co. has a net worth of $1.3 billion. Dick Yuengling, the owner of Pottsville, Pennsylvania’s D.G. Yuengling & Son, who doesn’t identify his company as craft, has a $2.6 billion fortune.

Born and raised in Los Angeles, Grossman started brewing his own beer in 1969, the summer after junior high school. Though home-brewing was illegal at the time and Grossman was too young to lawfully drink, it provided an outlet for his tinkering and his mother figured it would keep him out of trouble, he wrote in his 2013 book, “Beyond the Pale: The Story of Sierra Nevada Brewing Co.”

After graduating from high school, he and two friends took a 10-hour drive north in a Volkswagen bus to hike the Sierra Nevada mountains and he immediately took to Chico, a small city on the plains north of Sacramento.

Teetotaling Wife

Grossman fixed bicycles to make ends meet and sold home-brewing equipment in a Chico store he and his teetotaling wife, Katie, opened. They sold the business for $3,000 to start Sierra Nevada with Paul Camusi, whom Grossman bought out in 1998. The pair cobbled together equipment from scrap yards and in 1980, began selling Sierra Nevada Pale Ale, still the company’s bestselling beer and the offering credited with establishing pale ale as a mainstream beer.

In the 34 years since, the company has never had a year of declining sales, Grossman said. Sales were up about 25 percent last year, buoyed by a second brewery he opened in North Carolina, which expanded capacity and slashed shipping costs to the east coast by as much as $3 a case.

“Consumers would rather connect with producers who are growing their food, cooking their food, making their beer, making their wine -– that personal connection with the brand, the people behind the brand, is more and more important,” said Grossman. “Having a multinational company provide their food and beverage just doesn’t feel right.”

Beer Camp

To foster that connection, Grossman organizes beer tastings like the one in Portland, which took place in August. It was the New England stop on a seven festival circuit called Beer Camp Across America. He invited every craft brewery in the country to set up a booth — 643 took him up on the offer.

“We wouldn’t be successful without the success of a lot of our peers,” Grossman said.

Positioning the 1 million barrel-a-year Sierra Nevada alongside microbrewers helps the relatively large company keep its craft beer marketing halo, said Tony Magee, founder and majority owner of Lagunitas Brewing Co., a Petaluma, California, craft brewer.

“The little guys at every local level sell beer to all their best friends and get everybody excited about craft and the big guys are able to scoop all of that up,” said Magee. Lagunitas sells 500,000 barrels a year and poured its beer at the Chico beer camp event.

Twitter Backlash

Last week, Magee, who said Grossman’s pale ale is a reason he got into brewing, initiated a trademark infringement suit on Sierra Nevada’s IPA labeling. He withdrew it later that day after a Twitter backlash.

“We typically help each other to get along,” said Grossman, when asked about craft beer infighting in Chico. “But we are competitors and there are always competitive pressures.”

Gamesmanship is bound to happen in an industry that isn’t growing. Total beer consumption in the U.S. is flat to down 1 percent in recent years, according to data compiled by Bloomberg.

Craft beer, however, grew 17 percent in 2013, according to the Brewers Association. That’s led to an active M&A and private equity market for craft brewers, said Christopher Kampe, Managing Director at Tully & Holland, a Wellesley, Massachusetts, retail and consumer products M&A adviser.

“Where else do you see 17 percent growth in a consumer product?” said Kampe. “And this 17 percent is not an anomaly. This has been going on for almost 10 years. It’s got a growth profile that is very rare.”

Muscling In

Major brewers have taken notice. Anheuser-Busch InBev NV (ABI), which sold about $47 billion in beer worldwide last year, bought Goose Island in 2011, then an 80,000-barrel brewer. Last year it bought Blue Point, a 60,000-barrel a year brand from Long IslandNew York, for about $21 million, according to BevNet. Competitor SAB Miller (SAB) has been promoting its Jacob Leinenkugel brand with advertisements that feature the Wisconsin family that sold it, not SABMiller’s name.

“The majors do better with craft beer than they get credit for,” said Independent Beverage’s Thompson.

Grossman isn’t worried about the beer conglomerates muscling him aside.

“Even though we are a big small brewer, we are still just half a percent of the U.S. beer industry. We really have not compromised our product or process. Having growth does give you the ability to improve as you go,” he said.

Local Evangelists

Grossman thinks there’s room for another 3,000 craft brewers in the country and expects the vast majority will remain small, local evangelists with little distribution.

As evening comes in Portland, the billionaire takes a break from the taps to walk around his festival. While the bearded baby boomer is a celebrity to those he inspired, his Sierra Nevada isn’t the most popular beer at the event. In the center with a 15 minute wait to taste, Maine Beer Company is sampling its Lunch brand. The brewery calls it an east coast version of Grossman’s west coast IPA. The line, four dozen deep, persists through the night.