E-Malt.com News article: USA, MI: Brew Detroit’s bet on contract brewing

Brew Detroit LLC is a new and a state-of-the-art 100-barrel contract brewery started with $8 million in private investment. Led by Keith Sirois, the CEO of Big Boy Restaurants International, Brew Detroit LLC is set to launch in Detroit’s Corktown neighborhood next month, Brewbound reported on February 12.

Other partners in the contract brew startup include David Crawford, Big Boy’s senior vice president of marketing, and Don Foss, a famous used car salesman and the founder of Credit Acceptance Corporation, which provides auto loans to individuals with substandard credit. Mark Rieth, the owner of Atwater Brewery (and a former automotive professional himself) is also a minority partner in the new venture.

Sirois said that “a few years ago,” on behalf of Big Boy chairman Robert Liggett Jr., he reviewed the financials for a craft brewery looking to raise capital.

“The result was that we thought the brewery was over-leveraged,” he said. “It wouldn’t be worth it. We kept looking at the white space in brewing and, especially in Michigan, we saw a need for a space to produce beer in quantity for all these wonderful brands that the state of Michigan has.”

Sirois, Crawford, Foss and Rieth invested a combined $8 million to start Brew Detroit and hired former Mendocino Brewing supervisor Jason Schrider to oversee the brewing operations.

Situated in about 75,000 sq. ft. of space, the company has already received a brand new 100-barrel BrauKon brewing system, four 400-barrel fermentation tanks, two 200-barrel fermentation tanks and a packaging system capable of canning 400 containers per minute. The brewery will be capable of bottling 12 oz. and 22 oz. packages, filling 12 oz., 16 oz., and 19.3 oz., cans and packaging draft beer, Sirois said.

Brew Detroit will launch with about 48,000 barrels of capacity and has already signed contract agreements with Atwater Brewing and two other “fairly large” Michigan-based breweries, whose names Sirois said he could not disclose.

Sirois said he knows the transition from managing a chain of burger joints to a large-scale production brewery won’t be easy, especially as the contract brewing environment becomes more competitive. Right now, new ventures like Brew Hub in Florida, Ruckus Brewing in Pennsylvania and Paragraph XI in Massachusetts are preparing outposts of their own.

“I am not a brewer,” said Sirois. “I don’t have the background that a lot of folks have. It was not easy to put the money and this project together, but I think the upside is great. I think there is a hole and there is a great opportunity to create a nice business out of it. Will it become competitive? Sure, and that is what tells me that this is the right thing to do.”

Brew Detroit will initially look to take on Michigan-based clients, but Sirois said he’s not ruling out the possibility of brewing for larger regional companies looking to expand their footprints in the Midwest and on the East Coast.

“This was built to service a variety of needs,” he said. “We will talk to anybody.”

Nonetheless, Sirois said he’s “extremely optimistic” that Brew Detroit will begin producing beer at the end of the month, pending a zoning approval from the city of Detroit. In the meantime, the brewery has already conducted a number of test batches on the new equipment.

Brew Detroit has also donated a 2 percent equity position to the New Common School Foundation, which raises scholarship funds for Cornerstone Schools, an independent Christian private school. It’s part of the company’s commitment to investing in Detroit, Sirois said.

“We did this in the city of Detroit because it needs help coming back,” he said. “We need to invest in the people. We have made a commitment to them and will give the school a piece of every case we produce and an annual endowment.”


14 February, 2014