Construction, Food Service & Agriculture, and Manufacturing

Founders adds to downtown’s skyline

Brewing company hopes to have seven-story addition done this summer.

January 23, 2015
| By Pat Evans |
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Founders skyline
The new space will house facilities that could pump Founders’ output to more than 900,000 barrels annually. Photo by Chris Pastotnik

Founders Brewing Co. is adding to the Grand Rapids skyline.

The brewery is in the middle of a $40 million expansion project that includes construction of a seven-story steel frame to house new 1,550-barrel fermenters, which are six stories tall. The new brewhouse produces 300 barrels per batch, likely the largest of any craft brewery in the nation.

Co-founder and CEO Mike Stevens can hardly believe this is where the company is now, after nearing bankruptcy in its early years and only recently breaking out of the red.

“That’s a lot of beer,” Stevens said. “One turn in one of those fermenters is more than we did in a year for several years.”

Heading into 2014, the project already was on the agenda. Stevens said as Founders finished up a $26 million expansion project that upgraded both the taproom and production space in 2012 and 2013, he and partner Dave Engbers knew this project would be next.

Founders forecast it would produce approximately 200,000 barrels of beer last year — a barrel equals 31 gallons — and ended the year at slightly more than 193,000 barrels. That number is likely to push it into the top-15 breweries in the country based on barrel production. As recently as 2011, the brewery was outside the top 40.

This year, Stevens said he expects the brewery to produce approximately 275,000 barrels. The potential for the brewery will jump to an almost unfathomable 900,000 barrels annually once the current expansion is completed, which he said is still on schedule for this summer.

What Stevens and Founders didn’t expect in 2014 was the partnership with Spanish brewer Mahou San Miguel. Stevens said the opportunity ensures Founders will be around much longer than this generation.

“It also allows us to take American craft beer, and Founders, internationally,” Stevens said. “That’s been a goal of ours for a while.”

Currently, the plan is to build and develop a team to execute that international growth. The team will operate separately from the domestic operation, Stevens said.

While the team is being built, he said the focus will remain stateside. Major efforts, at least in the first half of the year, will be to expand on- and off-premises chain sales in the brewery’s existing 32-state distribution footprint.

“We’re faced with a great window of opportunity,” Stevens said. “2015 and 2016 are going to be pivotal years in making us a national player in the craft beer market.”

Founders’ All Day IPA is leading the charge into new markets and makes up approximately 40 percent of the brewery’s sales. The beer didn’t exist a few years ago, and was created at a fortunate time when session beer wasn’t a category, Stevens said of the 4.7 percent alcohol-by-volume beer.

Stevens said each beer in the Founders’ portfolio is growing at a pace greater than 30 percent.

“(All Day IPA) is a lead brand that helps pull other brands into the market,” he said. “No brand is suffering — quite the contrary.”

At the current time, no new markets are slated for opening, but the brewery is researching new markets out west, Stevens said.

“We don’t want to short wholesalers,” he said.

He said Founders could potentially open up a new market or two in the second half of the year once the new brewhouse is up and running. That new brewhouse, however, will be the main focus of 2015.

“It will be quite the showpiece when all is said and done,” Stevens said.

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