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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.”

The romance

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.”

It’s growing

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.”

Editor’s Note: This is the third part of a five-part series profiling Michigan’s brewing industry.

At 3.8 percent of the Michigan beer market, the state’s craft beer industry is still just a drop in the growler.

But that number has tripled since 1997, and is, as Michigan Brewers Guild executive director Scott Graham puts it, snowballing toward a larger share. The guild’s job is to help promote and support the industry its members make up, and to compete against the beer corporations of the world.

And that’s where the problem stems from, getting consumers to switch over to the better tasting liquids.

“There are still a lot of people who don’t know there’s a brewery down the street or there’s great beer in Michigan,” Graham said. “As more people find beer that’s interesting, it makes them more interested in seeking it out and sharing and bringing more people into the marketplace.

“If they’re a beer lover, they’re part way to being a craft beer lover. Not all of them will decide they like it, but a lot of them haven’t even thought about it or been exposed to it.”

The guild’s job

The guild is an organization made up of Michigan’s craft brewers seeking to get their products into the hands of more beer drinkers, and so far so good.

The guild’s goal is to hit the 10 percent market share, and although the current 3.8 seems a long way off, it really isn’t that far to reach. With states such as Oregon reaching about 20 percent of the state’s market share, it’s a national goal to hit 10 percent of the market, Arcadia Brewing Company owner Tim Suprise said.

“All of us at the guild certainly have our eyes on that goal and I’m convinced it’s possible,” Suprise said. “We’re all doing a great job in growth and awareness, engaging customers locally and culturally. All things combined can help us to that 10 percent mark.”

That sentiment was one Graham agreed with, as the amount of quality beers brewing and the ability of consumers to easily access the product is continually improving. If that’s the status quo, the market share also will steadily increase.

“I really think, if we keep doing what we’re doing, we’re taking all the right steps,” he said. “It doesn’t happen fast, the quality is important. The more we talk and try to find ways to educate the public and it will come faster and faster.”

In fact, Rex Halfpenny, publisher of Michigan Beer Guide, said the four percent mark will come this year, if it hasn’t already.

The number will only continue to get closer as more merchandisers look to carry the products being made by more than 100 breweries across the state.

“(I look forward to) watching retailers accept it more and realize it’s not only fun for them but good for their business because it draws in different and more consumers,” Graham said. “And to see the guild grow and play a role in building awareness, there’s still a lot of room to grow. There’s still going to be a lot of new ways, just because there aren’t enough of us working on it. It’s great to have those new opportunities.”

Editor’s Note: This is the second part of a five-part series profiling the state of Michigan’s brewing industry.

“Bottom line is we have some great liquids coming out of our state,” Dave Engbers spurted as he drove to the Indiana Brewers Guild Festival.

The co-founder of Founders Brewing Co. light-heartedly joked that the Hoosier State is jealous of the Mitten’s craft brewers. But that jealousness is the same sort of feeling Michigan’s brewers feel toward the states in the Pacific Northwest.

With world quality breweries such as Founders, Short’s Brewing Company and Bell’s Brewery Inc., the state has come a long way since 1997, although there’s still a long way to go to match a 20 percent market share some states have. But the Michigan Brewers Guild has the breweries in the same mindset. The Guild’s 15th Summer Beer Festival will begin Friday in Ypsilanti.

“We’re all on the same page of trying to build our industry,” Engbers said. “(Oregon) has an almost 20 percent market share, 20 percent of all the beer consumed in the state. Compare that to Michigan, where we’re around three percent. We’ve got a long way to go.”

The state’s craft beer industry makes up 3.8 percent of the market in Michigan, tripling since the guild’s inception 15 years ago. And it’s a good start to the 10 percent the guild hopes for in the near future, said Rex Halfpenny, publisher of the Michigan Beer Guide.

That goal will come by buyer’s awareness, the same awareness the guild has helped create in beer customers and enthusiasts in Michigan.

“The consciousness of buying something better, buying something artisan, something diverse, buying color, flavor, aroma, finish and aftertaste all plays into the decision,” Halfpenny said. “That’s the great thing about craft beer — they’re craft beer drinkers, not brand specific. A Bud drinker is a Bud drinker on the airplane, on the golf course, at home, anywhere he travels across the country…where a guy who drinks Founders will also drink Bell’s. And that’s what we’ve always wanted to produce that diversity.”

And those beer enthusiasts are growing faster, Michigan Brewers Guild executive director Scott Graham said.

“We have a good beer drinking community, some of the enthusiasts are vocal and get out to the breweries and that helps create the awareness, excitement and enthusiasm,” Graham said. “Now we’re seeing it get a little bit of size, and there’s more that’s reaching further and it’s like a snowball that’s gaining size. And it’s getting to the size that it can grow faster as it rolls over.”

To the point

Part of what has helped the craft industry grow is the decline of mass breweries and beer drinkers in general.

In 2002, Michigan consumed 6.8 million barrels of beer. In 2011, the state drank just 6.3 million barrels, a decrease of 500,000 barrels. But at the same time, the craft industry has grown by three percent.

“Those guys are hurting,” Halfpenny said of the big five breweries. “Meanwhile, craft beer, even though the numbers are small, is growing. We’re drinking less, but we’re drinking smarter.”

Still, the big four — Budweiser, Pabst, MillerCoors and Labatt — comprise 88 percent of the market share.

And the increase is product driven, by the way the product tastes, not like the mass advertising from major breweries.

“The big boys are going to outspend us and buying media,” Engbers said. “But at the end of the day, it’s about the liquids in the bottle, that’s how we compete. The beer enthusiasts are engaged in our industry and we have better educated consumers out there and they want better beer.”

To an extent

The guild has led to many of the dreams of Halfpenny being fulfilled. But he said since they’ve made some decisions against his wishes, now that he is no longer with the guild — because he’s not a brewer, a rule he helped implement.

“Subsequent to (me leaving) the guild has made some decisions that aren’t best for the industry,” he said. “If the guild did a little better job on marketing and spent the money more wisely we’d have a bigger industry.”

Still, Halfpenny pays his dues to be an enthusiast member of the guild and provides support by way of his publication and speaking engagement promoting Michigan beers. His dreams of having multiple Michigan beer festivals a year has come to fruition.

“I see that we have community, a stat that supports Michigan stronger than many states,” he said. “I had very big plans, and we succeeded with that to a certain extent. Now there are spring and fall festivals. I’m happy that we have that community that shares. If a brewer is in trouble, he can call another brewer and get help. That’s the community I wanted to see and we have that.”

And guild members agree the community is strong as ever, and growing — but there still is plenty of room to grow.

“We have a great community in terms of the sheer number of well-crafted beers and they are just now getting the recognition and attention it deserves,” Arcadia Brewing founder Tim Suprise said. “From the view point of the rest of the country, we’re lagging. So we have that room to grow.”

Editor’s Note: This is the first part of a five-part series profiling the state of Michigan’s brewing industry.

In 1996, Rex Halfpenny had trouble sleeping, stressed from the rigors of corporate America.

Halfpenny had come from the vast beer cultures of the West Coast to Michigan for his job in 1988, and now eight years later, decided to become part of the beer industry.

“I didn’t know how,” Halfpenny said. “I’d been chasing beer all my life. I had that going for me. I came to Michigan and there were virtually three breweries: Bell’s, Stroh’s and Frankenmuth.

“Frankenmuth got thrown into the river, Stroh’s closed. Thank God there was Bell’s.”

And he had ties to Bell’s Brewery. Upon his arrival to Michigan, Halfpenny said he became “pretty good friends” with Bell’s founder Larry Bell.

After his departure from corporate big wigs, Halfpenny traveled around Michigan visiting all 30 or so breweries there were at the time — just a few more than the three he knew.

“They knew each other, but didn’t talk, there was no community, no conversation,” he said. “So that took some effort. When I finally got them together, they sat in cliques. They talked about each other, but not to each other.”

So they finally met, all together in a dive bar in Saginaw that sold only Budweiser because they didn’t want to have to meet at a place with each other’s beers. Halfpenny wanted a group unanimous in decisions and what a solid beer community would do, but the brewers could only decide on one thing.

“I said, ‘Drink Michigan beer,'” Halfpenny said. “We decided to start a guild based on marketing Michigan beer. That was the one thing we could all agree on.”

So it begins

The Michigan Brewers Guild was born that night in 1996, but it didn’t really get its start until 1997.

Brewers Guild Director Scott Graham, in his sixth year in the position, said he’s not sure anyone else will notice the guild’s made it to 15 years.

“It’s nice to see, but it’s hard to notice. You don’t really see it unless you stop and think about it,” Graham said. “Fifteen years doesn’t make a big difference for consumers. Internally we’re happy for how much we struggled and what we’ve done.”

He said the guild’s one goal is to promote beer, something most consumers won’t notice. That goal is the shining remainder from Halfpenny’s early days as executive director.

Halfpenny left the guild following three years of no pay and the simple fact he isn’t a brewer. He now is one of the leading supporters and promoters of Michigan beer with Michigan Beer Guide.

“I should probably give Rex Halfpenny credit, he was instrumental in getting things going,” Graham said. “He tried to figure out common interests, and everybody wanted to sell more of their own beer. That led to the first beer festival.

The early struggles

The early interest in Michigan craft beer was low, and it showed in the guild’s first attempt at throwing a beer-centric festival.

The 1998 festival was thrown in Livonia, and people trickled in and out of the festival.

“That festival had 600 people,” Halfpenny said. “That was the interest in Michigan beer.”

At that time, the Michigan craft beer share in the state’s beer market was well under one percent. That festival was thrown with very little capital, just on the backs of the young brewers who made up the guild.

“We didn’t have any money,” Graham said. “We were producing a much smaller group, but all of us were a bit younger with enthusiasm.”

With about 30 breweries in hand, the festival showed they all knew that an association was a benefit to their businesses and the industry. Those brewers know to win people over, they need to work at it.

“What is so special about our industry is it happens very organically,” said co-founder of Founder’s Brewing Company Dave Engbers. “As a small brewery we’re very accessible, we have a taproom that brings people to the source of the beer and that’s where we meet our customers. You get to sit down and have a beer with them, have a good time, then they tell their friends and it grows. It’s very organic and very genuine.”

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