Founders is a blind-buy brand. It’s a statement Co-Founder Dave Engbers has heard for some time now. For fans, there’s no review or recommendation required when seeing a new beer from the Grand Rapid’s craft brewery.
“Our reputation … it’s not from a formal survey or anything, but one thing I always hear is that there is a level of confidence that our customers have when they pick up any Founders brand,” said Engbers. “They know the beer is going to be well made. Hopefully, they experience a great balanced beer, and that balance is a mixture of hops, hop aroma, malts and bitterness.”
Perhaps because of that confidence in overall brand selection, Founders doesn’t necessarily have a flagship beer either. A lot of folks know it as the Dirty Bastard brewery or the Breakfast Stout brewery. Customers from around the nation often just know it by the reputation of its hometown, Grand Rapids, Mich., which just won (for a second year in a row) the title of Beer City USA. But if Founders was to have a flagship beer brand, it would probably be its Centennial IPA.
“Often times, and especially in markets where we’re fairly well established, Centennial tends to be the beer we’re known for,” Engbers explained. “That’s definitely one of our challenges as a brewery — we don’t hang our hat on one brand — which is good and bad. But right now, our Centennial IPA is our highest volume beer.”
We sat down to talk with Founders about its biggest beer, Centennial IPA, but like always the conversation evolved into something much more interesting, digressing into hops buying habits, Founders new canning line from Krones and its next big brew brand (All Day IPA). Overall, India Pale Ales are definitely a Founders favorite today, but it wasn’t always that way.
Back in 2000, when Centennial IPA was launched, it was actually a difficult beer to sell. In the early days, IPAs didn’t have the following that they do now, Engbers says. It’s taken almost a generation of drinkers to really acquire a taste for hops, which has led in recent years to whole categories of heavy hop-infused craft beer — hence the Imperial IPAs, double IPAs, triple IPAs and beyond.
“Initially, I think it was more of a tongue-in-cheek joke when we introduced Devil Dancer as a triple IPA,” Engbers laughed, noting the June specialty beer has an incredible 112 IBUs and a 12 percent ABV. “Now I understand that there are several people brewing triple IPAs.”
Yet, Centennial IPA isn’t one of those hop bombs. It adheres to Founders’ main mission statement: Brew a well-balanced beer. The flavors of Centennial IPA work in harmony, producing a wonderful floral bouquet, citrus accents from dry hopping, sweet flavors from malty undertones and a hop character that never turns too bitter. With 65 IBUs and an ABV of 7.2 percent, Founders plans to make about 30,000 barrels (bbls) of Centennial IPA in 2013. That would be 67 percent growth over last year. Year-to-date Centennial IPA is contributing 19 percent of volume overall.
Centennial IPA is named after the centennial hop. “That was maybe one of our original pitfalls in our marketing. We didn’t realize how important branding was,” Engbers noted. “It’s called Centennial IPA because we use centennial hops. Not very creative, but it gets the job done.”
Centennial hops were first engineered by the USDA in the 1970s. It was created by splicing Brewer’s Gold Hops, Fuggle, East Kent Golding, Bavarian and an unknown fifth hop. According to the excellent website Beer Legends: “Centennial works undoubtedly well in Pale Ales and India Pale Ales, where some bottom-line bitterness is needed with the top end aroma … Centennial has seen a resurgence in the industry. In its short life, it has seen a rise and fall, and is now on an upswing. Its versatility in different beer styles, resistance to disease and fungus and moderate storability will keep Centennial in the American mainstream for some time to come.”
Of course when Founders began brewing its Centennial IPA, centennial hops were a unique choice.
“When we were playing around with recipes, centennial at the time was not the hop that it is today,” Engbers said. “It just didn’t have the notoriety, and I don’t think there were that many people, at least from a homebrewing standpoint, that thought centennial was a popular hop. But over the years, it has just grown and grown and grown.”
Founders has been on similar growth trajectory. Today, Founders Brewing Co. is Michigan’s second-largest beer maker, and it was ranked No. 30 on the Brewers Association’s list of the Top 50 Largest Craft Breweries in the United States in 2012 (it was No. 42 in 2011). Founders estimated it brewed about 71,886 bbls in 2012 and has projected to push that to 130,000 bbls in 2013. IPAs will be a big part of that push.
“IPAs initially were not the most popular styles, but now I think a lot of breweries are actually judged by their IPA,” Engbers said.
It’s not just meeting the customer demands of particular brands and categories for Founders. It’s also about projecting and hitting equally aggressive production, distribution and sales standards, while maintaining quality craft beer. That takes a well-balanced business plan, and for Founders that includes items like strong hop contracts, a new canning line and strong distribution and wholesale channels around the United States. Most big plans have growing pains. Just last year, the brewery had big plans to launch All Day IPA (its spring and summer seasonal session beer, which splits the year with its hugely popular Breakfast Stout in the fall and winter). Last year, All Day IPA could only be launched into four markets (Michigan, Ohio, North Carolina and the Chicago land area). Founders now distributes it across its entire footprint. Why the initial soft launch?
“Our original plan was to release that over a much larger footprint, but at the time, unfortunately, our hop contracts weren’t strong enough,” Engbers explained. “We had to make a decision where we put off launching it for an entire year or we do a soft launch in targeted markets. Luckily, we saw absolutely great results, so we’re really, really excited about that brand.”
Founders buys the majority of its hops from farmers out West. The brewery is at the stage now where it’s committed to working directly with the growers, actually visiting the farms and choosing which hops to use right off the vine. Hops relationships are exceedingly important, Engbers says, noting that strong, multi-year contracts are something growing breweries need to be factoring into their business plans. Currently, Founders sources only a very small percentage of its hops from its neighboring Michigan growers.
“We like to source ingredients locally if that ingredient fits our standard of quality,” Engbers said. “We also have a policy that says just because something is grown locally, in the county next to you, doesn’t mean it belongs in our beer. Our [Michigan] hop growers from what I understand are starting to make way. They’ve got to do some more work on their processing equipment and their harvesting equipment, but I think we’d be very interested in utilizing some of the local hops when their quality standards meet our quality standards.”
Founders is taking those standards across the country and even overseas. In early March, Founders announced a big distribution deal in Texas. In mid-April, Founders announced it was expanding its distribution territory to include the Sunshine State, with Brown Distributing slated to represent the brand across the entire state of Florida beginning this summer. Today, Founders brands are available in 25 states. The company will also be distributing its craft creations in cans now. In early April, Founders announced plans to can its first beer — All Day IPA — packaged in 12 packs which will be available this summer.
The brewery did extensive research to find a canning line that would meet its high standards. The company wanted a system that could deliver a sealed container meeting the same quality standard as what comes off its bottling line every day. For that new canning line, Founders turned to world beverage industry leader Krones, which had installed its bottling line about three years prior.
“Krones obviously is spectacular at what they do, and they’ve been a great partner,” Engbers said. “We’ve had opportunities to put our beer in other cans, but ultimately what it comes down to is the quality, and when we talk to the folks at Krones, they’re just so great at what they do. They’ve essentially guaranteed that our air pickups are going to be equal if not better than our bottling, so we’re really excited about doing that. And All Day IPA, to me, is just the perfect product to put into a can.”
New brands, new packaging systems, growing distribution channels and strong ingredients relationships — Founders is aiming to harmonize its standards with its growth — noting sales growth was a whopping 73 percent in 2012. As we spoke, Engbers was sitting in a Founders lounge, overlooking a new 9,000-sq ft area just added to the brewhouse. It has three 600-bbl fermentation tanks currently, with room for 33 additional tanks. It’s a sight that says Founders is prepared for expansion. The biggest challenge?
“We must never comprise our product. We must never compromise our brand,” Engbers said. “It’s kind of the unwritten rule at Founders. Well, maybe it’s written. You can’t take shortcuts. That’s my advice to other brewers. Our industry will thrive if people will continue to be diligent about quality liquid. That’s the best thing we can do for all of us to survive because I think there’s room for all of us as long as we have a high level of quality.”