With its 348 barrels of beer produced last year, Newaygo Brewing Co. accounted for less than 1 percent of all craft beer made in Michigan in 2015.
While the year-old company may be among the small producers in the state’s burgeoning craft beer industry, Newaygo Brewing’s story is a common one among breweries large and small. Namely, after just a few months in operation, owners Nick and Krista Looman have already had to invest in new equipment for the brewhouse, taproom and kitchen just to be able to meet demand from customers.
Unexpectedly, most of those customers have been coming from outside of Newaygo, a tourism destination and bedroom community about 35 miles north of Grand Rapids.
“This area has a lot of summer homes for Chicago residents and people from bigger cities like Grand Rapids. Because of that, we had to brand and design our beer for a more refined palate,” said Nick Looman, a longtime homebrewer. “It pushed us to get better at brewing and change how we look at our beer.”
The Loomans projected the brewery would need to produce between 200 and 500 barrels of beer over the course of 2015, and they hit their expectations “right in the middle.”
“I’m surprised how many people drive an hour or two to Newaygo just to come here,” he said. “We get people coming from Kalamazoo and farther, and that’s awesome.”
Across the board, Michigan craft breweries produced 769,897 barrels of beer in 2015, the 10th highest production volume among all states, according to new annual statistics from the Brewers Association, a Boulder, Colo.-based trade group. Pennsylvania, California, Colorado, Ohio and Florida were the top five producers, each with more than 1 million barrels.
With 205 craft breweries, Michigan ranked sixth in the nation for the number of producers. That’s 2.9 breweries for every 100,000 people over the drinking age.
Michigan’s craft breweries had an economic impact of $1.85 billion as of 2014.
The Brewers Association’s production figures for the state actually fell by 55,200 barrels, only because the group removed Founders Brewing Co.’s volume from the totals for 2015. The changes reflect Founders’ sale of a 30-percent stake in the company to Mahou San Miguel Group, a family-owned Spanish brewery. The Brewers Association’s definition sets a 25 percent threshold for non-craft brewery ownership for a company to be considered a craft brewery.
In sales, Founders ranked as the 20th largest brewery in the country last year. Bell’s Brewery Inc. of Galesburg maintained its position at 12th.
ESTABLISHED PLAYERS JUMP IN
Even in a crowded market like the greater Grand Rapids area with more than two dozen craft breweries, the industry continues to grow with a mix of small locally focused startups and established brands expected to open facilities in the coming year.
Among them is New Holland Brewing Co., which is opening a west side neighborhood taproom. Additionally Detroit-based Atwater Brewery will open a brewery and taproom in downtown Grand Rapids by late summer — at least prior to ArtPrize, according to President and CEO Mark Rieth.
“We’re really excited about the Grand Rapids project. It’s something that will be really special,” Rieth said. “We’re an established brand that’s trying to connect the two largest cities in Michigan with our project.”
The company plans a 6,000-square-foot taproom and production facility in the Rowe Hotel building at the northwest corner of Michigan Street and Monroe Avenue that CWD Real Estate Investment is redeveloping into a mixed-use property. Early designs by Integrated Architecture for the Atwater project feature roll-up doors to open the taproom to the sidewalk area, as well as a mix of wood and brick interior finishes.
Across its multi-site footprint, Atwater Brewing produced about 45,000 barrels of beer in 2015, Rieth said. The company distributes its beers, including the Dirty Blonde, Vanilla Java Porter and Grand Circus IPA brands, across 22 states, and is in the process of building a $15 million, 80,000-square-foot satellite production facility in Austin, Texas.
The new Texas facility will add 40,000 barrels of brewing capacity for Atwater and supply the southeastern U.S.
Rieth, who’s been at the helm of Atwater since 2005, remains bullish on the prospects for established large-scale producers. That’s despite the increased competition nationally, where the number of craft breweries surpassed 4,269 last year, more than at any time since Prohibition, according to the Brewers Association.
“A majority are smaller breweries and brewpubs. I think that’s where the growth will continue,” Rieth said. “I tell people getting into it to start small, establish themselves but really focus on how you can capture that local market.”
FORGING LOCAL TIES
Focusing on the local market in Grand Rapids serves as the basis for the formation of the new Beer City Brewers Guild. The nonprofit group aims to “celebrate, promote, and raise awareness of the craft brewing culture of our community.”
The guild, which includes breweries, breweries in planning, affiliated industry partners and enthusiasts, grew out of an initial collaboration of breweries that promoted Grand Rapids in an online vote to designate the title of Beer City USA, said President Jackson Van Dyke, the co-founder of Harmony Brewing Co.
Creating a separate nonprofit “would allow us to handle money, formalize and make it official,” he said. The group is open to all breweries in Kent County or in any city or township bordering Kent County.
The promotional organization will focus initially on its inaugural festival, currently planned for Aug. 13 at Ah-Nab-Awen Park in Grand Rapids.
“We wanted to do something highlighting Grand Rapids breweries,” VanDyke said. “There are lots of festivals, but ours will be different, and we want to keep it simple and focused.”
In the future, the guild could look to offer a forum for information sharing among members, as well as a marketplace for equipment and raw materials. But for now, the festival remains the top priority, he said.
To the north, Newaygo Brewing Co. is planning a weekend-long event of its own from April 29 to May 1 to celebrate its first anniversary. The brewery expects to have upwards of 30 beers on tap, including a range of special one-off products and barrel-aged offerings.
Over the first year in business, co-owner Looman said he’s been surprised by how much the taproom’s kitchen has served as an attraction for patrons. The initial plan assumed sales would be split evenly between food and beer, but food now makes up 60 percent to 65 percent of the business, he said.
“We found ourselves running a restaurant where beer is one component,” he said, noting that shift forced the company to invest in additional kitchen equipment and staff. “We knew we needed to bring in professionals that knew more than we did, who could teach us how to do it right. We’re good marketers and good business administrators, but my specialty was not in the kitchen. So we went out and got people with kitchen management experience to improve upon it and give us some guidance.
“The demand for food forced the beer to evolve, too. And as the size of the audience increased, the demand for a larger variety of beer also increased.”
A similar demand for an expanded variety of beer also played out for Atwater, which leverages its Grosse Pointe Park taproom “to serve as a test kitchen and let our brewers be more creative,” Rieth said.
The company moved some of those small batches to large-scale production this year, as well as executed a rebranding of its beers “to keep relevant,” he said.
“The craft beer industry as a whole is very vibrant and strong,” Rieth said, noting the industry’s string of successes has started to attract the attention of investors and strategic buyers in recent years. “It’s an interesting time, and everyone should embrace it. It’s a natural progression for the industry.”