Founders Brewing Co. is Michigan’s second-largest beer maker. The company 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, but with that type of aggressive expansion planned, there are bound to be a few growing pains.
Yesterday on its blog, Founders announced that: “Over the last couple of months we have been tight on production, and we have watched warehouse inventories, including ours and those of our distributors, affected by a perfect storm of activity.”
The Grand Rapid’s brewery is in the midst of a giant production facility expansion with a brewhouse extension, improvements made to its bottling line, the installation of a high-speed canning line and the addition of several 600-barrel (bbl) fermenters, but that’s all taking a lot more resources than anticipated. Specifically, the expansion has affected Founders’ ability to provide proper inventory quantities for all of its markets. We quote the blog:
After several months of effort, we can now say the end is near, and we are wrapping up our production facility updates. However, during this process, we had to undergo downtimes, which led to inventory levels becoming significantly reduced. It’s important for us to maintain a focus on our core brands in our current markets; as such, we must make some difficult decisions.
In the best interest of our wholesaler partners, retail accounts and craft beer consumers, we will hold off opening planned new markets at this time, including Florida, which was scheduled for a July launch. We also will not be introducing the new package launch of All Day IPA in 12-pack cans next month. Please know that these difficult moves affect many parts of our business but should be done for both short- and long-term success. Until we have built up core brand inventories in all markets again and are comfortable in meeting existing demand, these opportunities must wait a bit longer.
We are confident this won’t take long and hope to be able to embark on these new projects as soon as possible. We appreciate your support and your patience with us as we grow.
We interviewed Co-Founder Dave Engbers last month, discussing (among other things) the company’s aggressive production, distribution and sales standards. We also discussed how 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).
“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 in the article. “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.”
It’s the story of many hugely popular craft breweries. Founders is still struggling to keep up with its growth plans and crazy demand. It’s one of the most difficult challenges successful craft brewers must deal with today. We’ll keep you updated on Founders’ progress and its revised production and distribution timelines.