Suds Appeal: Microbrew Industry Looks back on First 20 Years

March 16, 2005

This year marks the 20th anniversary of the start of the craft brew industry in Michigan. In 1983 Larry Bell of Kalamazoo opened a homebrew shop and began selling supplies and making beer. His friends thought his beer was pretty good and so in 1985 he launched the Kalamazoo Brewing Company, the maker of Bell’s beers.
Larry Bell has gone from selling beer out of his trunk to becoming one of the country’s top microbrewers. His beers are now available in 10 midwestern states and are found throughout Northern Michigan, including his summer beer Oberon that will again be on tap next month, marking the return of summer.
Larry Bell has become the godfather of the craft brew industry in Michigan. His vision 20 years ago has helped Michigan become one of the top states nationally for craft breweries and craft brew production. At 59 breweries, our state ranks sixth overall. Bell’s, with his distribution and production nearing 50,000 barrels annually, is classified as a regional brewer.

MORE SUDS
The state currently has 38 brewpubs (restaurants that make beer) and 20 microbreweries. According to Fred Bueltmann, president of the Michigan Brewers Guild, this number is likely to grow. The Brewers Guild gathered this past January at the Park Place for their annual conference and there was plenty of enthusiasm for the future.
“It is really hard to predict how many more breweries will open in the next few years in Michigan. I suspect some,” said Bueltmann, who also serves as director of sales and marketing at New Holland Brewing Company. “When the brewpub laws were enacted we saw an explosion, and some breweries have since closed. It really isn’t about numbers; it is about quality, and I think we have that now in Michigan.”
Brewpub legislation in Michigan was passed in 1993. By 2001 the state had 80 breweries, but has since seen 26 breweries close with five new ones opening. Bueltmann sees several factors in the closings of breweries.
“The biggest challenged we were faced with in the beginning was consumer confidence,” said Bueltmann. “The consumer was unsure of the quality of our product and if they had a bad experience at one craft brewery, the assumption was we were all the same. I think through education and certainly improved quality we have overcome that image to a point. We still have a lot of work to do.”
Other factors that contributed to brewery closings included under-capitalization and several individuals getting into the business who really didn’t understand how it worked. All six of the craft breweries that have opened in the Upper Peninsula in the last 10 years remain open and nine of the 10 breweries in Northern Michigan remain in business today, proving that these craft breweries have become integral parts of small communities.

SHORTS’ SUCCESS
One recent example of success is Shorts Brewing Company in Bellaire. In 1993 brewmaster Joe Short made national news when he announced he was opening a brewery. A local church tried to block his license. After a year and a half of jumping through the hoops of bureaucracy, he opened his business on April 26, 2004. By the end of the year he was selected as the Bellaire Chamber of Commerce Business Person of the Year.
At 25, Joe Short is probably the youngest craft brewery owner in Michigan. His passion for beers came while he was a student at Western Michigan University. He began brewing beer in his apartment. He got so good at it that he was brewing three times a week to keep up with the demand of his friends. Short eventually turned his hobby into his profession and began working at a few craft breweries including a stint at Traverse Brewing Company in Elk Rapids before launching his own operation.
For Short, the past year has been a challenge.
“I wake up some mornings and have to remind myself why I got into this business,” he said. “At the end of an 18 hour day I am reminded. It isn’t easy. Sure I am having fun but the work never ends, nor do the bills. There is this myth that during the non-tourism season you get a break. Actually you have less money so you have fewer employees and end up working just as hard and just as long.”
Short isn’t crying in his beer. He loves what he does and that passion is coming out in his beers. He has 14 beers on tap and by the time he has his one-year celebration, that number could reach 19. He laughs that even the best business plan can’t prepare you for everything.
“I grew up in Rapid City and when my Uncle called me about the old Bellaire Hardware being for sale I knew it would be perfect for my brewery,” said Short. “Well I got the business plan together, the capital and all of the equipment and great employees. I guess I forgot to put having a leaky roof into the business plan.”

GETTING CREATIVE
For Joe Short, at the end of the day it is all about the creative process. It is why he is a brewer; for that opportunity to create and to walk by a customer and have them say, “Wow this is a great beer.”
“I think you have to give a person a reason to come in,” said Short. “By being creative and pushing the envelope-creates some excitement. It also makes for better tasting beers.”
Bueltmann agrees and thinks that brewers like Short hold the key to Michigan’s brewing future. Their innovative approach is putting Michigan on the all-important brewery tourism map.
“We are quickly becoming one of the top “Beer Escape” destinations in this country,” said Bueltmann. “We have a diverse cross-section of brewers and a lot of different styles. Brewery tourism is becoming big business and we are on the cutting edge of this trend. The traveler is seeking out beer destinations and in Michigan we have positioned ourselves perfectly for this.”
Bueltmann sees one segment of the beer industry as being similar to the American middle class: disappearing.
“There is very little middle ground in this business. Either you are small and stay that way or you have to get big,” said Bueltmann. “Consolidation has been the catch phrase in the beer industry. Larger breweries are buying out mid-size successful micros and even the large breweries are consolidating with each other. Competition and competitiveness has forced this.”

ONE DAY’S WORTH
To put production in prospective, Anheuser-Busch, makers of Budweiser, produce more beer in one day then all the Michigan brewers make collectively in one year. But domestic beer manufacturers have seen flat sales in recent years due to a new trend.
“The younger set is less brand loyal when it comes to beer,” said Bueltmann. “They are more willing to experiment. Another societal change is a move to support local. I think people like knowing the brewer and seeing his or her personality reflected in the beers.”
Joe Short is betting several hundreds of thousands of dollars on that fact. He sees the local support growing by drawing in the beer tourist. He has been having a positive impact on the local economy. Even area restaurants are putting his beers on tap, including Lu Lu’s, one block down the street. The two businesses have built a nice working relationship between each other.
“I know when they close because we get a rush,” said Short. “We send each other business and collectively our two businesses have become a nice draw for Bellaire.”

YOUNG INDUSTRY
As for the future Bueltmann and his fellow brewers are all smiles. While beer has been around for years Bueltmann points out that craft brewing is only in its infancy in Michigan.
“Remember, our oldest brewery in this state will celebrate 20 years this year and 90% percent of the rest of our breweries are less than 10 years old,” said Bueltmann. “This craft brew industry across the country is still young but we are having an impact. The big boys (Bud and Miller) are respecting us. They have given up on the idea of us going away.”
Bueltmann sees several things that his industry has done that have had a major impact on the larger brewers.
“Microbrewers brought forward the concept of fresh beer,” said Bueltmann. “Now the big brewers are all marketing fresh beer. The larger breweries are constantly launching new styles as a result of consumer demands that are a direct result of our emergence onto the beer scene. There is no question we are having an impact”
As for Short, he has brewed a special Anniversary IPA Ale to celebrate and will release it on Saturday, April 23, a day when he plans to have nine bands perform.
“I made it through my first year, the toughest for any new business, and I want to celebrate that fact and I want to say thank you in a big way to everyone that has supported me,” said Short.
For Larry Bell, Joe Short, Fred Bueltmann and their fellow brewers, these past 20 years have been a wild ride. Their dedication and perseverance is beginning to pay off, and at the end of the day it really is about having a great pint of beer. The good news is that it is now a guarantee every time you order a Michigan made beer. Cheers.

Northern Michigan Brewers include:

Wiltse’s Brewpub
in Oscoda (the first in the north to open)

Fletcher Street Brewery
in Alpena

Big Buck Brewery
in Gaylord

Boyne River Brewery
in Boyne City

Shorts Brewing Company
in Bellaire

Traverse Brewing Company
in Elk Rapids

Mackinaw Brewing Co.
in Traverse City

North Peak Brewing Co.
in Traverse City

Jamesport Brewing Company
in Ludington