According to experts at the Brewers Association, a craft beer trade group, Michigan’s craft breweries still have a lot more room to grow, both within the state and the country. But the latest step for some brewers is to step into the international market, selling in countries like Italy, Ireland, even Russia and Japan.
Every day, thousands of bottles clank their way along the production line at Arcadia Brewing’s 30,000-foot facility in Kalamazoo. Most of the beer will end up on draught or in liquor stores in nearby states. But by the end of the year, owner Tim Suprise plans to send some all the way around the globe.
"We’ve heard interest from Russia, or all places, believe it or not," Suprise says. "Perhaps Spain and/or a couple of European markets we’re looking at for 2015. Then later this year, we’re excited about a festival looking at 50 years of a certain style of malted barley."
The vast majority of craft beer is still sold locally, within a few states of home base. And experts say there’s plenty of room to grow in the market. Galesburg's Bell’s Brewing has stayed totally domestic, even as it prepares to expand its facilities to one million barrels a year. But Arcadia is following in the steps of a few Michigan breweries like Founders and Short’s and going abroad.
"Let’s just take Great Britain for example," Suprise says. "There’s been a really profound renaissance in craft brewing there for a few years now. And I think there’s been during that period of time, a continuing appetite and desire for diversity through American craft beers."
Nationally, the amount of craft beer going to other countries grew by 36 percent just last year. Michigan Brewers Guild President Scott Graham says it’s all a natural progression.
"It’s this incredible phenomenon!" Graham says. "At the most recent craft brewers’ conference in Portland, Oregon -- massive trade show, attendance is over 11,000 people! This trade show 20 years ago was 300 people who knew each other! So it’s really a remarkable thing. So why wouldn’t some exporting be part of the mix?”
That popularity really started in the depths of the Internet. Founders Brewing Company in Grand Rapids was one of the first to export beer all the way back in 2008. And co-founder Mike Stevens says it was the web that convinced him to take the leap.
"I guess what I saw overseas was a mirror image of what I saw domestically 20, 25 years ago," Stevens explains. "That being this community of beer geeks that desired the kinds of beers we were making. This community of small, boutique wholesalers that were hand-selling these beers to this community. And what we found so enjoyable in the states, perhaps 10 or 20 years down the road they will as well."
Well, now the market’s getting there. And while it may seem appealing to a lot of brewers, there are two main questions they’ve got to answer before jumping in. The first: does it even make business sense? There’s a tradeoff with going overseas: you open up new markets, but with shipping and everything, it costs more. That’s an issue for smaller breweries, as some don’t even make a profit until they’re selling more than 10,000 barrels of beer a year.
"Yeah, that’s Business 101, right? Really, does size matter? Technically speaking, no," Stevens says. "Because you can find a home. But does size matter from a business perspective? You bet it does. Because if you’re not a profitable company then you have no business shipping internationally."
The second question a brewer needs to figure out is how to make sure your beer stays fresh from the production facility all the way to the mouth of a beer drinker in, say, Hong Kong. It’s tough. For breweries without the benefit of a larger company to help show them the ropes, they have to rely on a wholesale distributor to buy their product and push it out.
Finding one is actually pretty easy. The hard part is picking a good one. That’s where the Brewers Association comes in. The association has an Export Development Program to help small brewers expand internationally. But program manager Mark Snyder says the goal isn’t simply exporting as much as possible. It’s making sure brewers export wisely.
"And so many of our brewing members are being contacted by exporters," Snyder says. "But they’re not exporters or they don’t know what they’re doing, and they want the cheapest way to get their beers overseas. And if the beer isn’t protected, it will arrive in essence bad. It'll spoil!"
As the newest brewery in the international market, Arcadia is planning on sticking with the “slow and steady” track. Suprise says that foreign sales won’t change anything domestically. He wants to keep things deliberate.
"We’re not looking at huge volumes," he says. "Somewhere between 8 to 10 pallettes of beer a month. That’s a manageable number. And it keeps us engaged at a close and personal level, with where the beer is going. Making sure it's pulling through."
This is still the trickiest balance for a brewery, expanding the business while making sure everyone gets the same quality beer. But Mike Stevens of Founders thinks the industry can do it. And he envisions that some point, decades from now, the international craft market could be just as big as what’s in the states.