Editor’s Note: This is the fifth part of a five-part series profiling the state of Michigan’s brewing industry.
As the Michigan brewing industry reaches peaks it’s never seen before, the number of breweries is also growing at an unprecedented rate.
With so much great liquid — as Founders Brewing Company co-founder Dave Engbers calls it — coming out of the state, more people are trying to jump on the trend of opening their own brewery.
While a great community has developed and many breweries are welcomed onto the scene by others, a dark shadow looms over some of the upstarts.
“People look and they think, let’s ride the wave, which can be good and bad,” Engbers said. “It’s great with additional breweries opening up, it means more exposure to the craft beer industry. The negative is that the reality is they’re not all going to survive. Our industry is highly competitive and capital intensive.
“Unfortunately, sometimes they get this idea that opening and running a brewery is very romantic, and it’s like anything, it’s a lot of hard work.”
At one point in time, Michigan Brewers Guild executive director Scott Graham knew of all the breweries in planning. Now, some will be open for nearly two months before he knows they’re open.
That’s not a bad thing, as he explains people who aren’t Michigan beer drinkers come closer when there’s a brewery around the corner. With those new breweries also come new beers, which continue to feed inspiration into the system.
“We have some great breweries that have and continue to give inspiration,” Graham said. “We have a good beer drinking community. Now we’re seeing it get a little bit of size and there’s more that’s reaching further and further.”
When those new breweries open up, they’re receiving the benefits of the forefathers before them. The benefits go beyond brewers helping each other and giving each other inspiration and encouragement, said Rex Halfpenny, publisher of Michigan Beer Guide.
“There is so much demand for Michigan beer, a place hasn’t even made a drop of beer and the distributors are knocking on the door saying sign with me,” Halfpenny said. “When I started (Michigan Beer Guide) a distributor wouldn’t even touch Michigan beer. Times change, demand is there, you can’t find a restaurant that doesn’t have a Michigan beer on tap.”
Michigan ranks fifth in the nation in brewery numbers, and the numbers — well over 100 — continue to climb.
That trend of breweries popping up isn’t unique to Michigan, Engbers said.
“There’s a lot of breweries that are in the planning stages, last I heard there’s around 1,800 breweries in the United States, and close to 1,000 in planning stages.”
That beer is ending up in more places, as the industry continues to grow.
“Brewpubs are popping up in all corners of the state, and most microbreweries have been going through all different stages of expansion lately,” said Michigan Brewers Guild president Eric Briggeman. “Craft beer has finally caught the attention of chain restaurants and stores so you can find it almost everywhere you go. I expect to see continued growth in the Michigan beer industry for many years, at an accelerated pace.”
With major expansions just finished up at Bell’s Brewery, Inc., and more expansions at Short’s Brewing Co., Founders and Arcadia Brewing Co., Michigan craft beer will continue to share more of the market.
Some of the breweries, such as Arcadia, have had to pull out of out-of-state markets to cover the Michigan market. Some of the major players, such as Short’s, focus purely on Michigan.
Still, all of the brewers see MIchigan as the place to make sure they please all the drinkers in the state.
“You always focus on your backyard,” Engbers said. “It’s one of the hardest things to explain. You can never turn your back on the people who got you to where you are, and we’ve had such fantastic support from Michigan.”
The shadow looms
With breweries in the United States set to just about double, could the capacity limit be reached?
Although that issue waits to be settled, Engbers and Halfpenny said it really isn’t about space, rather the product that is made. Halfpenny added that people can support as many breweries as imaginable, but the restaurants and such can only have so many in supply, and that decides the limit.
Engbers even said that many of the 1,000 or so breweries in planning won’t even open their doors.
“The reality is there isn’t enough room for everyone,” he said. “A lot of those will never even go to fruition and then there’s a lot that will open and close, unfortunately.
“As long as people are making great beer, then it’s great for the industry, but I caution startups to focus on the product. “
In 1998 and 1999, a period of shutdowns took place because the “pipe was too full,” and Halfpenny expects to see another shakeout because of demand being filled. Those breweries you know the names of will stay, but the corner startup might say goodbye.
“That was because the amount of product on the shelf exceeded the small population that consumed it,” Halfpenny said. “When that happens, Bell’s will still be there, Founders will still be there. The people that have brand equity will still be there.
“It’s a double-edged sword; we’ve got people looking at Michigan beer as a magical elixir. We have people getting into it for the wrong reason.”
Still, there is so much untapped potential in Michigan’s beer industry, and much more growth is set to come, Briggeman said.
“The current state of the industry, coupled with the possibility of some positive changes to the Michigan liquor code, leaves us nowhere to go but up,” he said. “The craft beer market share continues to grow on a national level, as well as in Michigan. The expansions that a lot of microbreweries are going through, in addition to proposed brewery start-ups, will help to satisfy the ever-growing demand for Michigan-made beer. We want to triple the amount of Michigan beer sold… right here in Michigan.”