Alexander Alusheff

Lansing State Journal

MERIDIAN TWP. – Kyle Schoenmaker was sipping an Irish cream coffee stout. Chelsea Nelson was in the middle of a card game called Skip-Bo.

Behind them, a crowd of perhaps 50 people, mostly Millennials, filled the bulky wooden tables and high tops in the former Lansing State Journal newspaper distribution warehouse that’s become Ellison Brewery and Spirits, one of the newest additions to the local craft beer scene.

“I’d pay more for beer if a place has atmosphere,” said Schoenmaker, 25, of Lansing.

Schoenmaker and Nelson initially came for the beer. They stayed for the atmosphere — and the beer. Schoenmaker got them each Mug Club memberships for Valentine's Day. The couple comes at least once a week.

“Every time we come, we’re playing a game with some people or we’re interacting with new people,” said Nelson, 21, as she adjusted a row of cards. “You don’t just sit down and watch TV.”

And the beer, well…

“This has just got a lot of flavor,” Schoenmaker said of his stout. “I like this instead of drinking something so bland and similar. Breweries like Budweiser are trying to replicate that craft beer feel. It’s a movement.”

A movement that is finally picking up in Lansing.

In the past four years, the region has gone from two breweries to 11.

There’s the Lansing Brewing Co., for instance, a $3.5 million development by Gillespie Group inside a renovated auto warehouse on Shiawassee Street. There’s Old Nation Brewing Co. inside a former police station in Williamston. There’s Sleepwalker Spirits & Ales in Lansing, a nano-brewery, which converted a utility closet into a tiny taproom inside the Allen Neighborhood Center. And Sanctuary Spirits, a craft distiller in Grand Ledge, started brewing beer in October as a way to attract more customers.

Four more are slated to open this year.

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At one point in the late 1990s, the Lansing area was home to four breweries. By 2000, it was down to two — Harper's Restaurant & Brew Pub in East Lansing and Michigan Brewing Co. in Webberville. It would be 12 years before another brewery opened here.

Meanwhile, brewing in the rest of the state was exploding like a shaken Schlitz tall boy.

“When you looked at the map, there was a big, gaping hole in Lansing,” said Rex Halfpenny, publisher of Michigan Beer Guide, which has covered the state’s industry since 1997. “It’s the capital of the great beer state. What was wrong with that picture?”

The likely answer: a recession and a long-tradition of drinking cheap, utilitarian beer.

Lansing was a vacuum, Halfpenny said, “and all vacuums need to be filled.”

But it’s more than that. Tastes are changing, as is the market for local products. With a strengthening economy, people are more willing to spend a few extra bucks on craft brews. And banks are seeing breweries as safer investments.

“People want to drink quality over quantity now,” said Harry Hepler, who owned Lansing’s first brew pub, Blue Coyote, which operated from 1995 to 2000. “It’s no longer a Budweiser and Miller Lite game.”

The new breweries

When Dan Buonodono retired from his IT job at the Michigan Department of Technology Management and Budget five years ago, he and his wife mortgaged their house to buy a former party store on a half-empty stretch of Mt. Hope Highway.

EagleMonk Pub and Brewery now has more than 1,300 individually painted mugs hanging from the wooden ceiling and local art decorating the cream-colored walls. Buonodono spent $250,000 to buy and renovate it, opening in August of 2012.

“There was a need,” Buonodono said, as his wife, Sonia, brought a glass of raspberry wit beer to the table. “There was only Harper’s. I can’t wait until next year when there are 12 or more around. It helps us all."

The same summer, a former Lansing police officer named Brian Rasdale converted a floral shop in downtown Mason into a 1,500-square-foot brewery.

“I always had a dream of opening a brewery, but I had a good job,” said Rasdale, who was laid off along with 35 other officers in 2011. "Once I got laid off, I said, ‘Let’s open a brewery.’ It worked out a lot better than I thought.”

BAD Brewing Co. — it stands for "Brian After Dark" — opened at 440 Jefferson St. in July 2012 with a $165,000 investment from Rasdale.

By 2014, three more breweries had popped up — Sleepwalker Spirits and Ales in Lansing, The Gallery Brewery in a former art gallery in Portland, and the Charlotte Brewing Co., which sits inside Eaton Pub & Grille in Charlotte.

Three more opened last year: Lansing Brewing Co., Old Nation Brewing Co. and Ellison. Sanctuary Spirits, a craft distiller, added brewing to its repertoire.

The local industry already accounts for more than 200 jobs. It’s a small fraction of the 14,733 jobs supported by the roughly 250 breweries across Michigan. Craft brewing had an economic impact in Michigan of $1.851 billion in 2014, according to the most recent data by the Denver-based Brewers Association, which considered the value of craft beer as it moved through the entire production and distribution system.

Four new breweries expected to open before the end of the year: Arcadia Ale & Smokehouse in Lansing, which will bring the first major Michigan brand name to the area; Ozone’s Brewhouse in Old Town, started by father-and-son duo Dan and Kyle Malone; Dimes Brewhouse, which is going into a vacant flower shop in downtown Dimondale; and Brickhaven Brewing Co. in Grand Ledge inside the former city hall.

“Lansing has been asking for craft beer,” said Travis Fritts, owner of Old Nation Brewing Co. “The more people appreciate craft beer, the more breweries will open. A rising tide raises all boats.”

Easier money

Banks didn't always see small breweries as a good investment. But craft beer in the U.S. has grown into a $19.6-billion market, according to the Brewers Association. And many banks have changed their tune. It doesn't hurt that more and more of bank loans to breweries are getting the backing of the Small Business Association.

“When we do industry analyses, what we’re seeing in university communities is that more and more people are going to craft beer,” said Nick Heriford, assistant vice president of commercial lending at Capitol National Bank in Lansing. “The demographics are there to support it, and there’s more of a focus on the industry.”

Capitol National Bank’s first step into the craft beer industry was lending Ellison Brewery and Spirits more than $500,000 to open its facility off Grand River Avenue in Meridian Township. The loan is guaranteed by the SBA, which means the federal government will cover 75 percent of the loan if it falls through, giving the bank more assurance, Heriford said.

“That SBA loan guarantee helps mitigate unsecured risk,” he said. “Since the recession, there is more openness to look to more ventures. But with any new venture, there must be a well thought-out business plan.”

And Heriford was impressed with Ellison’s business model, which has a heavy focus on distribution.

Ellison opened in October. Its beer selection ranges from hoppy and bitter India pale ales to a Tiramisu Stout. Half of its beers have an alcohol content of 8 percent or higher, well above Budweiser. Three-quarters of the beer it produced has been distributed to bars in mid-Michigan and metro Detroit, said co-owner Aaron Hanson, a former engineer.

Co-owner Eric Elliott, who sports the obligatory brewer’s beard, used to work for a wholesaler and used his ties in the industry to get Ellison’s beers distributed.

“We focused our business plan on mass distribution rather than just a brew pub, because Lansing still needs development,” Hanson said.

Ellison has also partnered with Shannon Long, CEO of Brew Export, a fledgling logistics company focused on exporting craft beer into the international market. Countries they will likely ship to include France and South Korea.

Long, 23, is a recent Michigan State University graduate who lives in Detroit. She just recently received a wholesale license from the MLCC and will soon export beer from her roughly 15 clients in the U.S., which include Latitude 42 Brewing Co. in Portage and Arcadia in Battle Creek.

“It’s a gap that needs to be filled,” Long said over a beer at HopCat in East Lansing. The bar, which opened in 2013, offers 100 craft beers on tap. It’s both a sign of the growing local market for craft beer and one of the establishments that's expanded it.

“Brewers need to look to other markets,” Long said. “They can’t sustain their growth in the Michigan market.”

That’s exemplified by Bellaire-based Short’s Brewing Co., known for quirky beers like Soft Parade, an ale loaded with pureed berries, and Space Rock, an American pale ale with flavors of citrus and dandelion leaf.

Short's announced in January that it would expand distribution to Pennsylvania and Illinois to maintain its growth. It's big news for a company with the motto “Michigan Only, Michigan Forever.”

“The market is getting crowded,” said Scott Graham, executive director of the Michigan Brewers Guild. “That doesn’t mean there will be a bunch more space for beer at Kroger and Meijer. This means people trying to get space will have to be smart business people.”

The beer wasteland

A German immigrant named Frederick Weinmann opened a beer garden at the corner of Pine and Maple streets in 1856. It was the first of at least six breweries that operated in Lansing and East Lansing between the 1850s and 1910.

A story recorded in “Pioneer History of Ingham County” holds that Weinmann was forced out of business by Abigail Rodgers, a founder of the Lansing Female Seminary, because she couldn’t tolerate the smell of beer, pig slop and sauerkraut. It seems to be a fabrication.

What did eventually close the city's breweries was Prohibition.

Ingham County enacted a local ban on alcohol sales in 1910, went wet again two years later and then dry in 1914, six years before Prohibition went into effect nationally. The city's most notable victim was the first Lansing Brewing Co. located on the corner of Turner and Clinton streets in Old Town and known for its amber cream beer.

It would be 81 years before Hepler opened Blue Coyote.

Michigan legalized brew pubs in 1992, allowing brewers to not only make, but sell a limited amount of beer on site. That had been previously outlawed under the three-tier system established by the Michigan Liquor Control Act of 1933, after prohibition was repealed. The law was designed to keep manufacturers, distributors and retailers from crossing into one another's businesses and possibly dominating the supply chain.

Hepler said he had a hard time finding investors in the early 1990s because craft brewing was such a young industry with a lot of risk. It was a $300,000 loan from the Lansing Economic Development Corporation that got the business running, he said.

In 1995, he and and then-business partner Michael O’Leary opened the pub in a building tucked away on Pere Marquette Drive, distinguishable by the three-story fermentation tank out front.

“I worked for a year to build it,” Hepler said. “I had a little bit of anxiety because, you know, were people really going to embrace this the way we were hoping they’d embrace this? We did a soft opening … and Pere Marquette turned into a parking lot and we reached capacity of 400 in about an hour. It stayed like that for months and months.”

But it was closed by 2000.

Blue Coyote produced 875 barrels of beer at its peak year in 1997. By that time, the Lansing area was home to three more brew pubs and breweries — Michigan Brewing Co., Harper’s Brew Pub and Lansing Brewing Co. on River Street, which was not the same Lansing Brewing Co. that now operates on Shiawassee Street.

“Everyone had the idea of starting a brewery back then, because the beer market was growing and you wanted to jump in, too,” said Brad Throop, owner of that former Lansing Brewing Co., which operated from 1996 to 2000 at 1105 River St. "In those days, you had to be a beer geek to pursue it.”

Lansing Brewing Co. didn’t sell beer onsite, but through distributors, Throop said. Some of the beer he made included Amber Cream Beer, Centennial Stout and the Timberman’s Blonde Lager, which was distributed throughout Mid-Michigan.

But operating a brewery tucked away on Lansing’s south side with no on-premises sales was not a sustainable business model, Throop said.

“We had low output,” he said, “And when you’re CEO, head brewer and bottler, you get very burned out.”

Lansing Brewing Co. closed in 2000, having produced 300 barrels of beer in its four-year run.

“People tell me I was ahead of my time,” Throop said. He'd proudly worn his blue brewers smock with the defunct company’s logo on it during an interview with the Lansing State Journal. “I knew the beer boom was going to happen, but I was too early.”

And then Lansing “became a beer wasteland,” Throop said.

While Lansing went a dozen years without a new brewery, the number operating in the rest of the state went from 70 to 139. Brew pubs and microbreweries were opening in Ann Arbor, Grand Rapids, Kalamazoo and Detroit, increasing their output of beer.

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“The breweries in the state doubled, but Lansing didn’t open anything,” Halfpenny said. “It’s got something to do with people drinking hard but drinking cheap. They are only just now embracing the idea that it’s smart to drink better beer.”

Michigan Brewing Co. did open a pub on South Washington Square in 2009 but the beer was still brewed in Webberville. By 2012, however, owner Robert Mason had defaulted on loans. The brewery that had produced Kid Rock's Badass Beer went into foreclosure and was evicted from its Webberville facility. In July of 2012, its brands and equipment were acquired at auction by MillerCoors.

Its Lansing pub would restructure and become Midtown Brewing Co., reopening in 2013. It makes small batches of beer in the kitchen or at Mountain Town Brewing Co. in Mount Pleasant.

“Places like Blue Coyote had great food and great beer, but Lansing was a meat-and-potatoes town,” said Scott Isham, the brewer at Harper’s since 2000. “It’s quantity over quality here. I think it just took time.”

“In a way I’d like to think Harper’s had something to do with the whole (craft beer scene),” he said. “College kids will come for the music, come for the dancing and, while they are here, they have some really nice beers. It’s hard to go back to Keystone Light when you have a Spartan Wheat.”

A frothy, golden age

The Lansing Brewing Co. name was resurrected again in October, this time in a prominent location behind Cooley Law School Stadium and what seemed like an instant clientele. On the morning of its opening in October, there was a line extending down the block.

Seated at the bar of the 7,000 square-foot brewery on Thursday evening in March, Jeff Baas took a final swig of Soul Slayer Imperial Stout, a hearty 9 percent beer.

“I’m not going to lie, it’s awesome,” Baas said. He'd just finished a sampler of five beers. “This is top notch.”

That’s a compliment coming from a Kalamazoo resident.

“I come from a beer capital,” he said. “But Lansing is coming along. I’d recommend this to my friends.”

That’s one of the reasons Pat Gillespie of Gillespie Group decided to build the brewery — to put Lansing on the map.

“Lansing is really the last frontier of Michigan cities for beer,” said Gillespie, whose wife, Jennifer, owns the brewery. “As a real estate developer, we really needed a brewery. I called all these breweries and asked them to please come to Lansing. Everyone said they were too busy to come so I just did it myself.”

In 2015, Lansing-area brewers produced 2,385 barrels of beer, a 104 percent increase from 1,168 in 2014. It's a 126 percent increase from 1,052 barrels in 2013 and a 208 percent spike from 772.5 barrels in 2012.

However, its an 79 percent decrease from production in 2011, when the region had made 11,890 barrels between Michigan Brewing Co. and Harper’s.

Microbrewery and brew pub owners have invested roughly $7.64 million in the region since 2012 in startup costs alone. Most say they plan to expand their brewing capacities or their facilities.

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Barrels of beer produced in Lansing - Infogram, charts & infographics



Buonodono is investing another $50,000 to add a beer garden to the back of EagleMonk. He bought the house next door to turn into a parking lot. He hopes both will be ready by this summer. Rasdale bought the building next to BAD Brewing to add an extra 900 square feet to the business to double its seating capacity and add an extra bar. The $65,000 renovation, which is being financed by an SBA-backed loan, is expected to be completed in July.

In June, Lansing Brewing Co. beer will be on tap at area bars. The company has also ordered more tanks to add 25 percent more capacity, said general manager Dan Glazer.

“It’s doing better than we thought it would be,” Gillespie said.

Sleepwalker Spirits and Ales reached its investment goal of $125,000 to leave the 200-square-foot closet it rents from the Allen Market Place. It plans to open a 5,000-square-foot brew pub on Kalamazoo Street this summer.

Isham said he is considering adding more capacity to his brewing system, which produces 15 barrels of beer in one batch. He could bring in a two-barrel system and expand from six beers on tap to 12.

Fritts said Old Nation Brewing Co., which opened in June, is on track to producing 6,000 barrels of beer this year. It has the capacity to produce 14,000 barrels annually.

Originally from Dimondale, Fritts gave up ownership of the Detroit Beer Co. to start this venture back home.

“The investors weren’t as interested in exploring this market,” Fritts said. “It took a while to sell the idea of opening a brewery in Lansing. Craft beer is an industry that is on an upward trend.”

Or, as Elliott sees it, returning to where it once was.

“If you go back through history, every town in America had a pub,” he said. “It’s just how we used to consume our beer. We’d all go down and have a couple pints … it was a social gathering. That’s kind of where we’re going as a country, I feel. If you break the population of Lansing down, there is plenty of room for growth.”





Contact Alexander Alusheff at (517) 388-5973 or aalusheff@lsj.com. Follow him on Twitter @alexalusheff.

Barrels of beer sold by Lansing brewers in 2015

BAD Brewing Co. - 314

Charlotte Brewing Co. - 86

EagleMonk Pub and Brewery - 352

Ellison Brewery & Spirits - 164

The Gallery Brewery - 114

Harper's Restaurant and Brew Pub - 450

Lansing Brewing Co. - 249

Old Nation Brewing Co. - 583

Sleepwalker Spirits and Ales - 62

Sanctuary Spirits - 11

*Midtown Brewing Co. does not show up on these reports because it brews most of its beer at Mountain Town Brewing Co. in Mt. Pleasant.

*Data taken from Michigan Liquor Control Commission.