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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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Paying attention to trends

KALAMAZOO — Sheryl Connelly’s primary job with Ford Motor Co. is to predict the future as it relates to the continued good financial health of her employer.

She told an audience of community leaders from the business, education and non-profit sectors gathered Thursday at the Radisson Plaza Hotel & Suites in downtown Kalamazoo that no one can predict the future.

But they can pay attention to trends and changes in consumer attitudes which will keep their businesses and organizations relevant.

Connelly, whose titled is futurist, was among several speakers at the second annual Catalyst University presented by Southwest Michigan First, Kalamazoo County’s economic development agency.

“In today’s world we all have so much to do and so much responsibility,” Connelly said.

“We become extremely focused and don’t see what’s around us. This is a problem Ford has had” beginning with its founder, Henry Ford.

Ford apparently was so focused on bringing transportation to the masses and producing an automobile to fulfill his goal that he insisted on only using black paint because it dried faster.

“While he was focusing on efficiency, our competitors were focusing on styling and we lost a share of the world market because of that,” she said.

Similar hiccups in the company’s history happened in the 1970’s when the first energy crisis occurred and the bigger, wider, longer vehicles Ford had been producing after World War II to satisfy consumer demand weakened the company’s position in the world market.

“We weren’t paying attention to what was going on around us,” Connelly said, during her talk, “Charting the Course.”

“There were things going on in the world we had no control over,” she said.

This is what Connelly focuses on. She studies consumer and social trends and demographics and spends a lot of time talking to individuals who represent a broad cross-section of what she needs to know to help the leadership at Ford make good decisions.

Connelly’s definition of a trend is a long-term shift in consumer values, attitudes and behaviors. She said the United States’ aging population will have major implications for Ford which will have to consider designing a vehicle for the consumer who has issues such as reduced response time and limited range of motion.

In addition to an aging population, Connelly said she has been paying attention to other areas, such as an attitudinal shifts, which finds consumers feeling extremely vulnerable and seeking out products which will give them greater peace of mind. Many of these products use technology such as GPS, which at one time was only available to the government and businesses.

“Technology is becoming more accessible and you can buy it at your local spy store,” Connelly said.

Many of these same consumers are showing a movement toward ethical consumption, which involves pushing accountability off of the individual and onto the organization.

“There’s a desire from consumers to take back control and the idea that something which happens locally has global implications,” Connelly said. “They want to make sure these larger organizations are doing their part.”

In 2008 colleagues of Connelly’s approached her about the continuation of ethical consumption. Her response was that the era of excess had come to an end and consumers would be balancing practicality with passion, in other words, living within limits.

As a result consumers are seeking out avenues which provide experiences, entertainment and escape.

Connelly said focusing on areas such as the ones she cited where the company has no control makes good business sense.

“It all goes back to strategy,” she said. “It’s understanding who you are, where you want to go and the environment where you want to execute your plan.”

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Kalamazoo’s a good place to be

KALAMAZOO — Kalamazoo symbolizes the type of community people would like to live in, and technological advances are making it more of a reality, said Joel Kotkin, author and nationally-recognized authority on global, economic, political and social trends.

Kotkin, a Distinguished Presidential Fellow at Chapman University in Orange, Calif., was one of several speakers at Southwest Michigan First’s second annual Catalyst University held Thursday at the Radisson Plaza Hotel and Suites in downtown Kalamazoo. More than 400 leaders representing the area’s business, education, and non-profit sectors attended the two-day event which began Wednesday.

“People would like to live in smaller communities if they could. The real growth will be in communities with populations between 100,000 and 500,000,” Kotkin said.  “This is one of the key opportunities for this community.”

Younger people in particular want to locate in an area of the country where they can enjoy an affordable lifestyle and have access to the types of technology that tie Southwest Michigan to U.S. and global markets, Kotkin said.

“Young people motivate us. If you take that away, you’re not a good leader,” he said. “Young people are like the yeast in the economy.”

However, Kotkin predicted there will be extreme regional and state competition for these individuals. Rather than trying to become the next Austin, Texas, or Madison, Wis., Kotkin suggested that community leaders capitalize on the qualities and characteristics which make their communities unique.

He said a good question to ask is, “Is this city a place where someone could come to transform themselves and their lives?”

“Just being in the Cool Cities program is not going to grow your cities,” Kotkin said. “You need to understand who you are and why you’re here.”

The title of Kotkin’s presentation — “The Next Hundred Million” — was taken from the title of his new book, “The Next Hundred Million: America in 2050,” which explores how the nation will evolve in the next four decades. He said the United States is in a good position to take advantage of future growth in Africa and Asia.

Residents of these continents increasingly desire a middle class lifestyle which will enable them to live more comfortably. To get there they will need access to the types of products and services which will help them achieve a better standard of living.

Kotkin said leadership at all levels in the United States need to figure out how to sell products in those parts of the world which are growing.

“We are the only advanced country in the world with a growing population and tremendous resources,” Kotkin said. “We are in a relatively good position. We have to believe in ourselves and know that we’ve got to compete in a global marketplace.”

Countries such as Australia, Canada and Germany were better able to weather the global economic meltdown because they manufacture and sell “stuff,” Kotkin said.

That “stuff” can be any number of things. As an example, Kotkin talked about the increased demand from China and India for fresh fruits and vegetables and protein-packed foods.

“The U.S. and Canada together are agricultural superpowers,” Kotkin said. “Water is important and you’re sitting among the largest freshwater reserve in the world.”

Michigan, he said, has the resources, in addition to an enormous amount of skill and technical talent to be part of any national effort to sell globally.  Even though the state has a long way to go, Kotkin said he thinks it has the types of communities many people would like to call home and do business.

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Things Are Looking Up

As economy improves, more temp workers are being converted to permanent employees

PORTAGE — Barb Miner wasn’t looking for another career. She was searching for a job which would supplement an early retirement package she received when she left the former Pharmacia Corp., now Pfizer Corp., after 27 years there.

But after spending a year as a temporary employee with a Portage manufacturing company, Miner was hired as a permanent human resources administrator and receptionist.

More temporary workers are being given permanent positions, area staffing agencies representatives say. It’s a trend that may show that companies are feeling more secure about their future because they’re willing to ramp up hiring rather than relying solely on temporary workers.

“What we’ve seen for the last three quarters is significant growth in terms of hiring activity with our customers,” said Steve Beebe, vice president of WSI, the Kalamazoo staffing company that placed Miner with the Portage company.

“Within the last 45 to 60 days we’ve seen an actual increase in permanent hiring. I relate that to companies seeing work that is more sustainable and bringing on the work force to handle that work which is quite common.”

In 2008, WSI placed Miner with W.L. Molding in Portage as a temporary employee. One year later that company hired her in full time as their human resources administrator/receptionist.

Beebe said WSI’s business for contract hiring is up 200 percent this year compared to 2009. He said national projections indicate that most companies are planning to expand employment during the first quarter of 2011.

Miner said she thinks starting out as a temporary hire makes sense for people like herself who have experience, but lack the education so many employers require.

“I had worked my way up to a managerial job with Pharmacia, but I didn’t have the education so I knew it would be difficult for me when I looked for another job,” Miner said. “They (W.L. Molding) started recognizing and utilizing my talents and they offered me a full-time job.”

The majority of jobs which shift from temporary to full time employment are still in manufacturing, Beebe said.

Melissa Johnson, sales director for Advance Employment’s Kalamazoo office, said her agency has had an almost 60 percent increase from 2009 in terms of the number of individuals they have put to work. She said some of these jobs were trial hires, as opposed to temporary positions.

Last month, she filled a request for 80 positions, which came from a Lansing-based company that focuses on energy-efficient products and services.

“The outlook for 2011 is that we’re actually going to have sustainable jobs in Michigan for the first time since 2001,” Johnson said. “We were in a general decline beginning in 2001. Our best year since then is this year.”

Mark Lancaster, president and chief executive officer of Battle Creek-based Employment Group, said he noticed an improvement in his business midway through 2009. He said his customers’ hiring forecasts have gone from three days to three months and in some cases six months — an indication of increased confidence in the economy.

“Our customers are actually hiring in 2010 and willing to bring people onto their payroll,” Lancaster said. “My most recent numbers are that 811 of our temporary workers have been hired onto customer payrolls.”

Lancaster said sectors of the economy in Michigan which are hiring include aerospace, electronics, food, furniture, distribution, energy and the automobile industry.

“All in all it’s broad-based hiring,” Lancaster said. “The auto industry and auto suppliers are still driving employment in Michigan.”

General assembly jobs often lead to the creation of other positions necessary to support an increasing workload, such as clerical or administrative jobs, Johnson said, particularly for those companies that were able to weather tough economic conditions.

Companies that survived while watching their competitors go out of business now have a bigger share of the market, Johnson said, and the majority of them need to expand their work force to meet anticipated demand for their products and services.

“Certain companies that haven’t utilized us for two or three years are calling us,” Johnson said.

Many of WSI’s clients are telling Beebe that their hiring will be sustainable and continuous.

Beebe said he thinks now is a “great time” to be a contract or temporary employee because, “you can get in the ground floor in entry-level manufacturing.”

For those individuals in the hunt for a clerical, administrative or professional-level job, Beebe discourages waiting out the recession and said these individuals need to start applying and getting their resumes out.

“You don’t want to miss the boat,” Lancaster said. “Starting out as a temporary or contract worker allows you to see what the company’s workplace culture is like to make sure there’s a good foot and it’s a great way to get your foot in the door.”

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