The Rise of Michigan Microbreweries

Microbreweries - Quicken Loans Zing Blog When I first began to responsibly enjoy alcohol, I was eager to try every different type of wine, liquor and beer I could find. Okay, that makes me sound like a raging alcoholic; what I mean to say is that curiosity and the seemingly endless types of alcoholic refreshments made me want to sample everything under the sun. This focus was quickly refined to beer, partially because I was surrounded by great breweries when living in Kalamazoo. First IPAs, then stouts, porters, back to IPAs, a long love affair with Amber beers, then just anything that wasn’t the scoff-able “domestic” beer.  I was turning into one of those craft beer lovers, you know, a snob.

The term “beer snob” gets thrown around pretty liberally, unfairly too if you ask me, because it’s just describing someone who prefers to drink craft beers. For those not privy to it, a craft beer is a beer made by a craft brewery, or microbrewery. The terms are swapped and thrown around pretty liberally, but the Brewers Association defines a microbrewery as “A brewery that produces less than 15,000 barrels of beer per year with 75% or more of its beer sold off-site.” A regional brewery is a brewery with 15,000 to six million barrels, and a large brewery makes over six million barrels a year. Also thrown into the mix are Brewpubs, or restaurants that brew their beer on site and sell at least 25% of their beer on site.  Because the beers are made in much lower quantity than say Bud Light, craft beers are generally more flavorful, sometimes only seasonal, and higher in alcohol content. For these reasons and more a growing market of drinkers prefer craft beers and have since been dubbed beer snobs. Regardless of if you prefer the taste of domestic classics like Pabst Blue Ribbon or a prominent craft beer like Bell’s Two Hearted, the economics of the beer industry are at a very interesting point right now and Michigan is right in the middle of it.

If you’re following recent beer news (as you do regularly, you dapper individual) then you’ve probably heard about Anheuser-Busch InBev’s most recent problems. Well, on second thought they don’t have too much to complain about. They’ve been the Coca-Cola of beer for a very long time now, and currently control 47.7% of the American beer market. They have been a part of numerous company buyouts or mergers, and their beer catalogue is as much of a cash cow as it is lengthy: Budweiser, Bud Light, Michelob Brewing Co., Rolling Rock, Busch, Natural Light and Bacardi just to name a few. Their most recent merger attempt was to fully acquire Grupo Modelo, maker of Corona, but it was blocked by the US Department of Justice in fear that AB InBev would control too much of the market after the merge. Not too long after that, AB InBev received multiple lawsuits against them claiming the beer giant had been watering down their product.

One would think that a beer giant like them attempting to expand even further would mean bad things for microbrewers, but the opposite is true. The 2012 stats for most microbrew info are still waiting to be released until next quarter, but the rate that these breweries (nationally and statewide) have been growing is exciting to say the least. 11,468,152 barrels of craft beer were made in 2011, up 1.3 million from the previous year, and craft brewing grew 13% by volume and 15% by cash in 2011. Perhaps the best part of the success of these breweries is from the 1,940 craft breweries that were open for some or all of 2011, 103,585 jobs were created across the country.

Michigan is rolling in the success of the craft brewery business. Michigan houses dozens of craft breweries, including top sellers and multiple award winning breweries Bell’s (Oberon, Hopslam), Founders (Breakfast Stout, Dirty Bastard Scotch Ale), Short’s (Huma Luma Licious, Soft Parade) that are experiencing the success of the craft beer boom over the last few years. According to the Michigan Brewers Guild, the brewing industry in Michigan “contributes $24 million in wages with a total economic contribution of more than $133 million. In terms of overall number breweries, microbreweries and brewpubs, Michigan ranks #5 in the nation – thus supporting its claim as ‘The Great Beer State.’”

If you’re worried about this microbrewery wave crashing sooner than it should, don’t worry. Although big picture numbers are still being crunched from last quarter, craft brewers of the area are already calling 2012 a huge sales success, and predicting even bigger things for 2013. Short’s Brewing Company in Bellaire, MI, reported the brewery grew over 30% in 2012. They ended the year at 18,008 barrels produced and at $6.8 million for the year. Another prominent brewery in Grand Rapids, MI, is the award-winning Founders Brewing Company.  They produced 40,937 barrels in 2011, shooting to 70,886 barrels in 2012, and are projected to produce 130,000 barrels in 2013. The communications manager for Founders, Sarah Aldrich, had this to comment on the breweries progress.

“Founders had an overall growth rate of 73% in 2012 and sales in existing markets were up 68% that same year, compared to an industry average of 12% growth for the first half of 2012. Projected growth for 2013 is 86%.”

It’s an awesome time to be a craft beer lover: the national and statewide trend of supporting local breweries and brewpubs has never been more popular, and it’s promoting economic growth to the area as a result. It doesn’t really matter if you prefer a top-selling domestic or a hard-to-find, seasonally-released craft beer. But if you are a craft beer fan, there’s nothing snobby about buying a specific beer when it’s supporting your local economy. If it tastes great and serves as a social lubricant, that’s just a wonderful side effect. So go out, and responsibly drink to help Michigan’s economic situation; at least that’s what I’ll be telling myself.

 

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