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How Much Does Beer Mean to Michigan?

by Lisa Diggs

It’s Craft Beer Month here in Michigan, and it’s pretty easy to figure out what to do to celebrate. Arguably the hardest part of the decision is which pint to hoist!

Lest you think the only thing to celebrate is the deliciousness of the libations our state is producing, (and indeed that would be reason enough for a few toasts), this seems a good time to also highlight the economic contributions of the industry to our state.

Since it was officially organized in 1997, the Michigan Brewers Guild (MBG) has seen its brewery membership grow from 35 to 155 as of June 1, 2015. Additionally, a growing number of “Brewery in Planning” members (15) indicates that the industry continues to grow by leaps and bounds here.

According to Scott Graham, MBG Executive Director, Michigan ranks #5 in the nation in the number of overall breweries, and the industry provides a direct impact of more than 5000 jobs, totaling over $144 million in wages, and more than $277 million in total output.

The latest economic impact study touted by MBG, indicates that 65% of the craft brew purchased in Michigan is product that was produced here.  Even at Detroit Tigers games, where the price of any beer is already high enough, fans flock to the Michigan Craft Beer stand to pay a little more for a quality selection from local brewers like Bell’s, Founders, New Holland, or Atwater.

In addition to the growth of the industry itself, increases in craft beer production are also creating new opportunities within the agricultural and tourism industries. Last month I spoke to a farmer who has converted several fields to produce hops and barley, which is a growing trend. Local resources are not yet keeping up with the demand of the brewers.

There is a learning curve, and in some cases additional investment required, for farmers to begin producing malting barley in particular. Because of the heightened demand for locally sourced ingredients, MSU Extension published a paper which explores the potential, and outlines best production practices, for Michigan-grown malting barley. It’s an excellent resource for farmers considering new beer-related opportunities. Aside from hops and barley, brewers are also making use of many locally-produced flavor enhancers like berries, pumpkin, and even maple syrup to create their unique portfolios of brews.

Tourists are flocking to the “Great Beer State” for tastings and festivals as well. On any given day, if you stop by one of our state’s many tasting rooms, you will likely find visitors from Indiana, Illinois, Ohio, or Wisconsin who are on brewery tours. Grand Rapids has earned national acclaim as a “must-visit” destination among true beer enthusiasts, having twice been voted “Beer City USA” in an online poll popular among beer fans.

The breweries themselves are struggling to keep up with demand, which is an incredible problem to have. As a result, many have expanded. Bell’s and Founders both clearly have their eyes on building national brands.

In May of 2012, Bell’s opened a new 200-barrel brewhouse and expanded production facility. By April of 2013, the company added a new division called Upper Hand Brewery in Escanaba, and reportedly plans are underway for an additional expansion. The new 200,000-square-foot addition is designed to increase its production capability to 1 million barrels of craft beer per year.

Similarly, in 2014, Founders embarked on a $40 million expansion, and projects 2015 production at around 275,000 barrels. Once the expansion is finished over the next few years, the output will roughly double to around 500,000 barrels a year, with a capacity to produce during peak seasonal times at a rate of 900,000 barrels a year.

To put those production levels in perspective, only three craft brewers in the nation make more than a million barrels a year. Michigan’s mug is definitely flowing over. 

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