Band of brothers: Brewers keep pushing each other
At the Association for Corporate Growth’s meeting this month, the theme was “a rising tide lifts all boats.”
The subject of the night was “Business-to-Business Sales Success in a Crowded Market,” led by a team of panelists from a rapidly growing but very cooperative industry — craft beer.
Mike Stevens from Founders Brewing Co., Tim Suprise from Arcadia Brewing Co., and Fred Bueltmann from New Holland Brewing Co. discussed the pains of starting a brewery about 15 years ago and the now rapid expansion of the industry.
Despite having more than 120 breweries, ranking Michigan fifth in the country in breweries per capita, consumption of craft beer is nearly 50 percent that of the national average. Michigan beer consumers chose craft beer just more than 3 percent of the time, while the nation hits about 6 percent.
Stevens said the 6 percent should double in the next three to five years, and he expects Michigan’s consumption will rise as well.
In the early years of the current brewery explosion, there was a competitive edge to the companies. But in 1997, Michigan brewers came together to form the Michigan Brewers Guild, and now look at each other as friends and brothers.
“Why not come together, push together and push that percentage up, rather than push up against the people who make that percentage?” Stevens said. “That support system lives within our community and we’re taking an entire segment and working together to build it.”
The panel — and most brewers — feel as though more quality brewers making good beer will only help push the market shares up, especially as international companies continue to purchase and cut corners at the macro breweries like AB InBev and SABMiller.
The low market share in Michigan is strange, Suprise said, as the state has some of the nation’s — and world’s — best regarded beers in Founders, New Holland, Arcadia, Bell’s Brewery Inc. and Short’s Brewing Co. But he, too, believes the camaraderie will only help see the continued growth of the industry, and joked with the bankers in attendance that the breweries will have their backs.
“As an industry, that’s a really powerful tool,” he said. “We had this ability to somehow come together and stay together and flourish.”
Suprise said as the market continues to grow for craft beer, so too will the expansions of the breweries, the capital invested and jobs created.
The group did say it has to be wary of startups without the same intentions that most brewers start with, and that stems from passion. That thought makes Stevens wonder what the market will look like in three years.
Bueltmann reminded the crowd that breweries aren’t overnight successes, and that it takes at least a decade to build a trusted brand. Without a solid business plan and, even better — a unique product — the brewery could be without hope.
“These aren’t quick-dollar stories. They didn’t look like good investments, and they probably weren’t,” he said. “There’s an idea of passion and stability, and the more roots you put into it, the more trust you’ll gain.”
The way breweries can make it in a market that continues to crowd the shelves at the grocery store is to create a niche and have a distinctive product, Suprise said.
That idea was lost during a boom in the late 1990s, when several breweries came and went out of business, thanks in part to making the same styles, something Stevens’ partner, Dave Engbers, has called “well-crafted, unremarkable beer.”
Founders almost fell into that trap, coming near bankruptcy twice in early years. Now, after spending 75 percent of its history in the red, Stevens told the crowd that Founders recently hired a company to conduct a market survey.
The response: “They make a lot of beer, and they make a lot of beer really well.”
Stevens said that outcome is from when the partners changed from following the beer trends to following their passion for brewing.
“It’s a brand created by people who really care about beer,” he said. “It’s not something we take lightly. You can remember the beers you had at your favorite concert, the night you met your spouse, or those great weekends with friends.
“We recognize we’re a part of your weekend and we take it very serious.”