LANSING — Go ahead and crack open a Michigan-made brew. It's good for the economy.

A recent study from Michigan State University estimates beer to be about a billion dollar industry for Michigan. In Lansing alone, the industry contributed an estimated $14.5 million to the local economy in 2016.

And, though growth in the craft beer industry is starting to slow nationwide, those in the industry in Michigan say there's still room for expansion.

“For beer in general, I’m cautiously optimistic that the industry will stay strong,” said Steve Miller, one of the study's co-authors and director of the Center for Economic Analysis at MSU. “We’re a pretty big beer state.”

The study found that the beer industry in Michigan contributed nearly $1 billion and 9,738 jobs in total aggregate economic contributions in 2016, including close to $14 million in the Lansing region.

For every dollar spent on a Michigan craft beer, 65.9 cents goes to retail and food service, 8.4 cents goes to distributors, 6.8 cents go to state and federal taxes, 6.2 cents goes to hops and 3.4 cents goes to the brewers, according to the study.

Travis Fritts, the co-owner of Old Nation Brewing in Williamston, said the rapid growth of the industry has created intense competition, meaning it's getting harder for brewers to stand out and get their beer in the hands of consumers.

But that's not necessarily cause for alarm.

“That’s less of a sign of the sky falling and more of a sign of a maturing market," Fritts said.

A growing industry

Between 2010 and 2015, craft beer production in the U.S. doubled. Growth since has held steady at a few percent each year, according to the Brewers Association, a trade group that represents thousands of brewers.

But that slowdown doesn't mean the golden era of craft beer is over.,

That Lansing in particular has room for growth just in number of breweries, Miller said.

Grand Rapids has 19 breweries per 100,000 people. Lansing has fewer than 8.5 per 100,000 people, according MSU agricultural economist Trey Malone.

“There’s clearly a big difference," said Malone, the lead author of the study, "and it’s not clear to me the consumer profile from one city to another is that different."

The market also hasn't hit saturation, even if it is harder to break into the beer business than it was a decade ago, said Scott Graham, the executive director of the Michigan Brewers Guild.

“A whole business based around 'everyone loves my beer' isn't enough," he said.

A growing hops industry

Michigan is the fourth-largest producer of hops in the country, one of the key ingredients in beer along with yeast, water and barley.

There's about 800 acres of the crop across the state today, hop grower and MSU grad Jim Mikesell said. There were only a handful of acres a decade ago, he said.

Mikesell is a co-owner of Dog Star Hops near Charlotte. He said he expects hops growing to continue to get bigger in the state. Little by little, the quantity and quality of Michigan hops is improving, he said.

"We’re really interested in the brewers acceptance of using local hops," said Dog Star co-founder Michael Parrott. “The fact that (brewers are) starting to recognize Michigan hops is really, really great.”

The state's growing hops and barley industries means Michigan brewers can source their ingredients entirely in-state.

“Michigan is one of the few states where you could source a beer 100% locally,” Malone said. “It’s pretty hard to do that anywhere else in the country."

Hops are similar to wine grapes. Certain varieties grow better in different climates and latitudes. That's why the Pacific Northwest has traditionally been a large producer of the crop.

Fritts said hops and barley production still lags other parts of the country. Few hops producers in the state can meet the large demands in terms of volume and hops varieties for larger craft breweries.

“Can you grow good hops in Michigan? Absolutely," he said. "Can you grow the full range as in the Pacific Northwest? No."

Distribution and regulation

Miller described the Michigan as progressive in terms of its regulatory laws pertaining to beer production and distribution.

Spencer Nevins, the president of the Michigan Beer and Wine Wholesalers Association, said most regulations have helped brewers, not hurt them. Many prevent large brewers like Miller Coors and Anheuser Busch from dominating the beer market.

For example, the state's "secondary-use" law prevents brewers from giving bars branded items like coasters and mugs. Nevins said that prevents certain brewers from using gifts to earn a monopoly on bar taps.

“I’d be hard pressed to find a regulation that is hurting craft brewers,” he said. “I think the regulations have created a great market.”

Fritts agreed. There aren't laws in Michigan that make it unusually difficult for brewers or distributors to operate in the state, he said.

“It’s not a pleasure to work with any government bureaucracy," he said. "But, as much as Michigan can make it easy, Michigan makes it easy.”

Miller and Malone said the best thing the state can do is continue to encourage research on the industry and support those who want to be part of the beer market — from farmers to distributors.

“I think we're really lucky," Nevins said. "If you’re a fan of beer you’re really lucky to live in the state of Michigan."

Contact reporter Haley Hansen at (517) 267-1344 or hhansen@lsj.com. Follow her on Twitter @halehansen.