Stroh’s death knell for the Bell brewery and the craft beer era


Today Michigan is one of the nation’s leading craft beer producers. There were 158 craft breweries in the state in 2014, up from 131 in 2013, according to Boulder, Colorado. Brewers Association.

Michigan’s craft breweries created an economic impact of more than $ 1 billion in 2012, a number that is expected to increase, said Bart Watson, chief economist of the Brewers Association. Watson said Michigan’s new generation of brewers have benefited from the public culture shift towards higher quality products. “Stroh’s went bankrupt because they had the same business model as Anheuser and Coors; they couldn’t compete,” Watson said. “What we are seeing in small independent brewers is an ability to differentiate themselves; they have different products and different styles, which is attractive. Even though the barrel is significantly lower, the economic impact is greater for each state because these breweries charge a premium for what they do. ”Anheuser-Busch produces more than 150 million barrels of beer in the United States, said Watson Conversely, Michigan craft brewers produced nearly 600,000 barrels in 2013 and only 10.6 million barrels for total US craft beer producers in 2014. But with the expansion of several of the state’s largest craft brewers – Bell’s, based in Battle Creek Arcadia Brewing Co., Atwater, based in Grand Rapids Founders Brewing Co. – barrels produced could exceed one million this year. Arcadia completed a $ 7 million expansion at Kalamazoo in May 2014, bringing production to 26,000 barrels per year. Founders is forecasting a $ 40.4 million expansion in Grand Rapids, which is expected to increase production to 900,000 barrels over the next several years. Based on Dexter Northern United Brewing Co., who operates North Peak Brewery in Traverse City and Happy pumpkin in Ann Arbor and Traverse City, expands to Midtown Detroit this year. But for Northern United, the process is slower as it kicks off its own expansion efforts. Tony Grant said that while revenues have increased 40 percent year over year, slow and steady growth is the key to the brewer’s survival. “We are jealous when we see people investing millions and millions of dollars,” Grant said. “I think a lot of people in small businesses, ultimately they would like to do things perfectly, but there is also a real pride in the struggle.” Northern United sold 7,500 barrels of beer in 2014 and generated revenues of $ 10 million. Craft brewing is big business in Michigan, and funding for rapid expansion efforts is a new source of funding. The founders sold a 30 percent stake to Mahou-San Miguel Group in December to contribute to its expansion. San Miguel is Spain’s largest craft brewer, founded in 1890. Atwater raised its funds through available debt financing and reinvestment of profits, Rieth said. Joseph Infante, lawyer of Miller, Canfield, Paddock and Stone PLC in Grand Rapids, who heads the company’s alcoholic beverage regulatory team, said that despite the state’s rapid growth, the market has plenty of room for growth. “The industry is growing in two directions: Brewers like Atwater, Founders and Bell’s are growing, grabbing that growth from the top, but there are still a lot of new brewers coming into the market every year,” said Infante. “Everyone thought the bubble was going to burst, but it doesn’t. The big guys are going to keep getting bigger, but the hot market is for small breweries and neighborhood pubs.” Last year, Infante represented a few Michigan Technological University graduates when they open Triple root infusion in Zealand, a city that lifted a 100-year ban on the sale of alcohol in 2006. Infante said the neighborhood brewery is an underserved market that banks are keen to fund. “Can you think of an industry that is experiencing this kind of growth, 40% growth, 100% year over year? Said Infante. “It’s incredible.”



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Pamela W. Robbins

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