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Wednesday, 30 July 2014 23:27

New wave of Southwest Michigan microbreweries embrace bootstrapping startup model

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Tibbs Brewing Co. Tibbs Brewing Co. COURTESY PHOTO

Even when Kevin Tibbs has a painfully slow night at his newly opened brewpub, he doesn’t sweat it too much.

That’s just one of the luxuries that comes with the slow, methodical growth philosophy that he and his wife, Cindee, outlined in launching the Kalamazoo-based Tibbs Brewing Co.

“If I was facing a bunch of loans and all those interest payments, I’d be stressing out all the time, rushing to make and sell a certain amount of beer,” said Tibbs, the brewery’s general manager. His wife is the owner.

The Tibbses bootstrapped their brewery, opening it on Dec. 6, 2013 using just $40,000 in cash and no loans to date. It was a five-year hobby that eventually turned into a business opportunity.

Tibbs Brewing is not alone in this lean startup approach to business, which could explain the continued launch of new breweries throughout Southwest Michigan despite an abundance of existing options.

However, in the local brewery community, there are no competitors — just allies, Tibbs said.

“I would definitely say it has a community feel to it,” Tibbs said. “I actually get a lot more business here due to the heavy concentration of breweries right here in Kalamazoo — more than if I were just here by myself.”


INCREMENTAL IMPROVEMENTS

Although his operation pales in comparison to established heavyweights like Bell’s Brewing Inc., Arcadia Brewing Co. and Dark Horse Brewing Co., Tibbs said the brewery’s first year in business surpassed his expectations.

Tibbs started on a one-barrel system before quickly adding another to the mix. Currently, Tibbs brews behind the bar when the pub is closed. The microbrewery is on track to finish the year having produced about 200 barrels. Distribution is not an option at this point as Tibbs said he struggles to keep up with demand over the counter.

While a quick infusion of cash might make life a bit easier for Tibbs, the husband-and-wife duo is sticking to their initial bootstrapping strategy.

“We had a plan coming in and we’re sticking to it,” said Tibbs, who added that he and his wife are considering an expansion into the location’s basement. “We’ve done it without loans up to this point. It just takes a little more work. It can be done.”

T.J. Waldofsky and Chris O’Neill share the Tibbs Brewing philosophy as they work to launch One Well Brewing at 4213 Portage Street in Kalamazoo. They signed a lease for the property in June.

In true bootstrapping fashion, the partners from One Well Brewing turned to family members for cash and plan to tap into friends to help with renovations.

“We want to grow organically,” Waldofsky said. “Many of the microbreweries are able to throw a lot of money at it. We don’t have a lot of money, and that’s why we’re doing many of these things on our own.”

The partners behind One Well aren’t completely lacking in cash, armed with roughly $80,000 for the venture. But they’re still finding ways to be smart with their limited resources.

Waldofsky’s friends and family are hard at work collecting reclaimed wood and metal to lend a rustic look to their establishment that won’t break the bank, he said.

One Well should open its doors in early 2015, but a soft opening later this year is not out of the question, Waldofsky said.


SOPHOMORE SUCCESS

Tibbs, One Well, and fellow newcomers Rupert’s Brewhouse and yet-to-open Brite Eyes Brewing Co. LLC — both in Kalamazoo — are navigating territory that was trodden by a previous wave of microbreweries.

Gonzo’s BiggDog Brewing and Boatyard Brewing in Kalamazoo and Latitude 42 in Portage were the new kids on the block last year and are still going strong — if not flourishing by some accounts.

Boatyard Brewing swung open the doors of its new, 2,400-square-foot taproom, located at 432 East Paterson Street, on June 21. Co-owner Brian Steele said Boatyard now has the space to focus on special events after originally opening as a 1,800-square-foot brewing facility with an 800-square-foot taproom. The new space has helped Boatyard triple its over-the-counter sales compared to its original location.

With renovations disrupting the brewing process, Boatyard is on pace to turn out around 500 to 600 barrels this year. However, next year, Steele said production should be well north of 1,000 barrels.

After opening at 140 South Westnedge Avenue last November, Greg “Gonzo” Haner counted the first year at his $1.5 million brewery as a success.

The brewing veteran of 22 years explained that Gonzo’s BiggDogg Brewery expanded after just two months in business by adding two 500-gallon serving tanks. He said the brewery will make similar expansions again soon.

Right now, Gonzo’s doles out 500 gallons of beer a week via its tap house alone. The brand went into statewide distribution two months ago.

“We have some specialty brews coming up,” Haner said. “These are really high-end gravity beers that will be one-offs — very small batches to give our brew gurus a little added bonus.”


BIG NAMES KEEP TRUCKING

Of course, not all the recent activity in the local microbrewery scene has been low-cash, bootstrapping deals. Arcadia Brewing Co. finally opened its $6.5 million brewing facility and tap house in Kalamazoo. In the process, Arcadia shifted its headquarters and main operations from Battle Creek to Kalamazoo, where it will top out at a 60,000-barrel capacity.

“We remain committed to Battle Creek,” said Tim Suprise, founder and president of Arcadia Brewing. “While we shifted some production from Battle Creek to Kalamazoo, we are still running a fairly full production schedule of both draft beer and some packaged beer in Battle Creek. The bulk of our packaging is done in Kalamazoo.”

With Arcadia’s limited capacity, the company had to scale back on distribution in the last three years. Thanks to the new facility, Suprise said the brand should be available in Indiana, Kansas, New York and Virginia before the year’s end.

The company is targeting strategic markets in 2015 but was not ready to share the specifics, he said.

Arcadia opened for business in Kalamazoo in May, following a string of development woes.

“I believe any time you tackle a brownfield site, it requires some understanding of what you may or may not run into when you open up Pandora’s box, so to speak,” Suprise said. “We did have a bit of an expectation that we would encounter difficulty. The extent to which we did surprised us. The delays were a bit more than we anticipated.”

Not to be outdone, the dean of Southwest Michigan breweries, Bell’s Brewery, also made a sizable investment in Kalamazoo with a $12 million expansion to its production facility in Comstock Township.

The additional 12,000 square feet have been devoted to canning, fermentation and refrigeration lines. Founder Larry Bell said the company has plans for an even greater expansion over the next year.

MiBiz Staff Writer John Wiegand contributed to this report.

Read 6070 times Last modified on Wednesday, 30 July 2014 23:33
Jayson Bussa

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