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People like their craft beer

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For Larry Bell, founder and president of Bell’s Brewery, Inc., hitting the bottom of the barrel is a good thing.

So good that Bell and his 115-employee workforce celebrated the company’s 25th year in business in 2010 with major expansion plans. The additional space is needed to accommodate the ever-increasing demand for craft beer on a local, state and national level.

Sales of Bell’s Beer doubled from 2009 to 2010.

“In 2009 we hit the bottom of the economy as well as seeing a spike in brewery commodities,” Bell says. “We were forced to take a price increase at the worst time. We only had 12 percent growth that year. We expect to finish 2010 at 23 percent growth.”

Bell’s Beer, the company that got its start in 1985 with brew made in a 15 gallon soup kettle, now has one percent of the beer market in Michigan. And though this may not sound like a huge number, Bell says it’s enough to get him and his company noticed by the “big guys” such as Anheuser-Busch.

Being noticed is one thing, being bought out by them is another.

Bell, 52, says for the past several years he has been quelling persistent rumors of plans to sell his company to a major player in the beer industry. Acquiring other craft breweries, however, is something he’d like to do.

“We’re interested in acquiring, but we’re not interested in being acquired,” he says.

So far, what’s  stopped him is is most craft breweries aren’t technologically advanced enough for him to be interested in buying.

These days, Bell’s interest is primarily tied up in expansion plans that began last year with the purchase of an existing building just down the street from the company’s brewing facility at 8938 Krum Ave. in Comstock Township, east of Kalamazoo. The building houses the company’s corporate offices.

About $17 million will be invested in 2011 to expand the company’s brewhouse. Fermenting capabilities will expand, employee care areas enhanced and more space and equipment will be provided for new specialty fermentations. The upgrades are expected to be completed by early 2012.

Another $35 million will be spent through 2016 to build out and equip an additional 60,000 square feet of floor space at the company’s Krum Avenue location.

These expansion plans will create the need for additions to the company’s current 115-employee workforce. Bell says he thinks between 10 and 12 employees will be added each year for the next five years in areas such as packaging, logistics, brewhouse, sales and office staff.

And the company’s brewery expansion follows a $2.5 million renovation project that got under way last year at Bell’s Eccentric Cafe, its downtown venue for live music.

Attracting the talent needed to grow certain segments of the business has at times not been easy, Bell says. For awhile it was difficult to find people with training in the brewing. That improved after craft beer began to be recognized as a serious contender in national and international markets and courses offering degrees and certifications in brewing became available.

And it can sometimes be a challenge to attract top talent to Michigan, Bell says. “But, when people come here and see the level of sophistication we have for a small brewery it’s enticing for them.”

Bell’s head brewer relocated here from London, Ontario, and one of his salesman came from Anchorage, Alaska. There also have been a few hires from the Detroit area.

When it comes to the long view for the company, Bell did not have to look far to find his likely successor. He says his daughter, Laura, has expressed an interest and passion for the family business. She’s now in charge of the company’s marketing operations for the business, which despite its growth is considered a small brewery by national standards. The government’s definition of a “small brewery” is anything which produces under 2 million barrels per year. In 2010, Bell’s Brewery produced and sold more than 115,000 barrels.

Oberon and Two-hearted Ale are the company’s number one and number two selling beers respectively. Bell says these two beer brands account for 70 percent of the company’s production.

Completion of the new brewhouse will enable the 24/7 production schedule needed to meet the ever-growing demand for craft beer.

The recent opening of Michigan’s 85th craft brewery shows the popularity of specialty brews.

“All of the craft breweries in Michigan are doing well,” Bell says. “Through all of this economic trouble the citizens of Michigan get it that if they spend their money here it helps.”

On the national level, craft beer has been the only “hot” segment of the beer industry, Bell says.

“Because we’re one of the older craft breweries we have the capacity to take advantage of that.”

Bell’s Beer is sold in 18 states, the District of Columbia and Puerto Rico. And one of the “frequently asked questions” posed to Bell’s is when their beers will be available in new markets.

“People realize how much better (craft beer) is,” Bell says. They’re healthier for you than other beers, too, he says.

Among those places where the locally-produced beer won’t be found are large sports venues where brewing giants such as Anheuser-Busch have a virtual lock on beer sales.

“The places where a lot of volume is sold are the places we can’t get into,” Bell says. “These are places where the big brewers are paying to keep us out.”

Then there are state-by-state restrictions such as laws in Minnesota stipulating that only beers produced in that state can be sold and served in any building constructed with public funds.

Bell concedes there is some irony in the fact that such an iconic fixture of American culture as beer is now being produced predominantly by foreign-owned businesses in the United States. “Over 80 percent of the beer produced in America is made by foreign-owned companies,” Bell says.

Never one to shy away from a challenge, he says his sales force will continue to pound the pavement in search of new markets and customers.

“Nobody knew back when I first started that it would take off like this,” Bell says.

Jane C. Parikh is a freelance reporter and writer with more than 20 years of experience and also is the owner of In So Many Words based in Battle Creek.

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