More Than Half Full

Michigan craft brewing industry growth is good for beer lovers and the economy


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The reach of Michigan beer has been expanding in recent years. Offerings from powerhouses like Atwater, Bell’s, and Founders can now be found in bars or party stores across the nation. Brewers like Short’s pledge to keep their beer only in our home state, but continue to gain fans. Meanwhile, numerous smaller breweries may sell only in their own pubs, or perhaps distribute a handful of kegs to a small, regional following.

What they all have in common is their contribution to the financial health of Michigan.

The impact can be measured not only in direct jobs and beer output from breweries, but also in dollars spent on support businesses and the multiplier effect — extra income for industry workers leads to more spending on additional goods and/or services, which leads to more income, etc.

 

Show Me the Money

Consider a few statistics from the Brewers Association Economic Impact Study. The association (brewersassociation.org) provides annual breakdowns of the economic impact nationwide and for specific states.

  •  In 2014, Michigan’s craft breweries provided 5,000-plus jobs with more than $140 million in wages. The total direct output of money topped $277 million.
  •  In 2013, Michigan breweries accounted for 582,909 barrels of craft beer, putting the state in eighth place nationwide. 
  •  The volume equates to around 2.5 gallons of beer produced per 21-and-older adult, which ranked 13th in the nation. 
  •  The total number of Michigan craft breweries in 2013 was 131 (it now tops more than 140), placing the state fifth in the nation. 
  •  Michigan isn’t alone: The total number of breweries nationwide in 2014 was 2,822 — the second highest number of breweries since 1873.

 

Spreading the Wealth

The growth in craft breweries isn’t just good for their own bottom lines. There’s an indirect impact — to the tune of more than 750 jobs and $37 million in wages — on supporting businesses. Indirect impact includes, but is not limited to, goods and services such as malt, hops, glass, marketing, packaging, and brewery equipment. The total output for these support industries is more than $92 million.

One example of a support business is Top Hops Farms in Goodrich. The family-owned and operated farm south of Flint produces seven commercially available varieties of hops, plus another 15 in their trial yard. They have been cultivating their hops for seven years.

Sean Trowbridge, co-owner of Top Hops Farms, entrenches himself and the farm deeply in the local community. “We strive to have a presence in both the commercial and home-brewing communities,” Trowbridge says. “We like to bring brewers up to the farm to have them see the process in action. It’s great having the brewers pick some hop cones and roll them in their fingers to release the oils and aromas.”

The farm also likes to invite home-brew clubs to the farm for their feedback and participation. 

“We had 25 home brewers on the farm last year brewing with our hops [and using] grains donated by local breweries,” Trowbridge says. “Some of the home-brew clubs also volunteer their time in the trials yard.”

Top Hops Farms also practices local sustainability. When installing their trellis system, they used Michigan products whenever possible — from Michigan pine to cables from US Steel. 

“Our advertising and marketing, packaging, and upcoming website redesign are all handled by local companies,” Trowbridge adds. They are also considering adding their own clean room and pelletizing capability for the 2015 harvest. 

Top Hops Farms employs around 30 people annually, with three full-time employees. They produced 6,300 pounds of hops in 2014, which were shipped to more than 25 breweries around the state, including Kuhnhenn, Woodward Avenue Brewers, 51 North, and The Great Baraboo. They hope to harvest an additional 15,000 pounds of dried hops in 2015.

 

Ripple Effect

The final piece of the economic puzzle is what is called “induced” impact: the effect of the industry workers purchasing additional goods and services. These purchases can be correlated to another 1,200-plus jobs and more than $49 million in wages, with a total output of $146 million.

Add it all up, and the total contribution of Michigan’s craft brewing industry for 2014 was more than 7,000 jobs, $232 million in wages, and an overall economic impact of more than $516 million.

The number of breweries is still on an overall growth trend, with 148 member breweries in the Michigan Brewers Guild. Until the craft beer growth bubble bursts, Michigan can expect to see increased financial benefit from the beer industry.

The bottom line is: From farmers, brewers, package designers, and marketing companies to barkeeps, grocery store stock clerks, distributors, and truck drivers, your favorite Michigan beer helps the economy. So drink up!

 

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