John Gallagher

Detroit Free Press

Founders planning a $40-million expansion in Grand Rapids

Its most popular beer? Founders All Day IPA

GRAND RAPIDS – Founders Brewing, a downtown Grand Rapids institution that grew from two hopeful co-founders into a major beer influence, is embarking on a $40-million expansion that will grow its operation over its entire current city block.

Co-owners Mike Stevens and Dave Engbers have grown the business from 1997 into a 275-employee, 200,000-barrel-a-year operation. Stevens said it would would have been easier to build a whole new brewery on a fresh site in the suburbs than shoehorn an expansion onto its crowded downtown site. But loyalty to Founders' hometown was a key motivator.

"It's important to us ultimately to stay downtown, to stay in Grand Rapids," Stevens said. "Grand Rapids is where we started our business. We've been growing in Grand Rapids. My partner and me were born and raised in Grand Rapids."

Craft beers and the microbrewery pubs that sell them have become key drivers of urban revitalization across Michigan with Grand Rapids a major focal point and perhaps the jumping off point for about two decades of steady growth and increasing fame for Michigan craft beer.

The craze has spilled over into other urban centers with HopCat, another Grand Rapids microbrewery institution, opening a Detroit location next week and an Ann Arbor location next month. Others have flourished in urban areas across the state.

Founders' loyalty and sense of place help explain why craft beer and microbreweries have become so popular and effective instruments of urban renewal, including in Detroit, where companies such as Atwater Brewery and Motor City Brewing Works help anchor neighborhoods.

"I think ultimately beer brings people together," Stevens said. "I think your local brewery can take a community and define it to some extent, and it's a source of pride. I've seen over and over where a brewery can be put into an area of town that needs development and upkeep and it can bring a real sense of strength."

Stevens said that "back in the late '90s, most people didn't know of craft beer, but the people of Grand Rapids helped this business become the company it is today. We were never profitable until 2008. If it wasn't for the people of Grand Rapids who held us up and encouraged us, Founders wouldn't be where it is today."

Founders projects 2015 production at around 275,000 barrels, and once the expansion in finished over the next few years, that output will roughly double to around 500,000 barrels a year, with a capacity to produce at peak seasonal times at a rate of 900,000 barrels a year.

What is true of craft beer's appeal as a spur to urban redevelopment might equally be said of the entire local food movement or, indeed, of Americans' whole approach to how they shop.

"We've seen a shift," Stevens said. "I think we're talking about a transition in how people buy products and how they align themselves with products. People want to know where their products come from more than ever before. I think you see this in restaurants, the farm-to-table concept, definitely in craft beer, in wine, in spirits. It is an economic driver."

Founders now sells beer in 32 states, mostly in the eastern half of the U.S., and in about a dozen foreign countries, including England, Ireland, Spain and Australia. Its best-selling beer is its All Day IPA.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.

Founders expansion

The Michigan Strategic Fund is helping out with a $250,000 grant, while the Grand Rapids DDA is pitching in $4 million in various incentives. Total incentives equal about $4.5 million.