top of page

Larry Bell Turned His Homebrewing Obsession Into Something Really Big

Bell’s Brewery founder Larry Bell and I have some personal history in common. Way back when it was pretty tough to find any variety in the beers that were widely available here in America, we both decided to make our own. We both wanted to sample the many different styles from across the world–all the ones that the big domestic brewers had long since abandoned in favor of a common white-bread pilsner for the mass market.

But Bell’s passion ran far deeper than mine. I was a homebrewer only until a burgeoning imported beer market and then the craft brewing explosion made true variety accessible. He, on the other hand, was just getting started. In fact, he was one of the pioneers of that very craft beer movement that rendered my homebrewing no longer necessary. (That is an actual fact; my relocation from Memphis, Tennessee, to Cadillac, Michigan, in 1996, where I suddenly had access to Bell’s, Great Lakes, and other marvelous regional brands in various styles, marks the exact time I quit homebrewing for good.)

Founded in 1985, today Bell’s Brewery is one of the most successful of America’s hundreds of craft brewers. They’re the sixth-biggest craft brewer in the country and #16 in the world, and they’re Michigan’s largest independent craft brewery. The family-owned company’s modern brewery and headquarters are in Comstock, Michigan, while their original brewery, pub, restaurant, and entertainment venue are in Kalamazoo. They have a sister brewery, Upper Hand, in Escanaba in Michigan’s Upper Peninsula. Their brewing volume in 2019 was close to half a million barrels (or around 15 million gallons). They distribute to 43 states, Puerto Rico, and DC. But it truly did start with homebrewing.

“I started homebrewing when I was working in a bakery,” said Bell. “I worked with a guy there who invited me over for a homebrew. It foamed over and wasn’t very good. I thought, ‘I’m a better baker than him, so I bet I could do this better too.’ I wound up moving in with three other guys, and we got a kettle and a bad homebrewing book and got started.”

Eventually, Bell says, his ‘homebrewing was getting out of control.” A couple of chance occurrences–a visit from a local bluegrass band wanting to buy a whole bunch of his beer for one of their road trips and a $200 gift from his mother–convinced him to go commercial. He spent $35 on incorporating and $165 on supplies. His initial capitalization was $39,000, including a $7,000 loan and $32,000 in stock (six shares of which went to a local landlord for space for his first brewery).

Bell knew the market he was up against. “I was aware of Anchor and Sierra Nevada [two successful California craft brewers],” he said. “I also knew about Real Ale Company in Chelsea, Michigan–I watched them fail. I sat in the bankruptcy attorney offices once myself, but never filed.” The early days were hand-to-mouth. “We kept the heat at 50 degrees, except on Fridays when we’d have customers in. Then we’d raise it to 60.” Unable to afford new commercial bottles, which required order quantities of three truckloads paid for in advance, Bell re-used another brewer’s bottles, hand-washing them, removing the old labels, then filling and labeling them by hand.

But slowly things started to turn around. “As the craft beer movement grew, people wanted beer from their own backyard,” said Bell. “As it started to catch on in the Midwest, we’d already been around awhile, so we were well-positioned to take advantage of the market. Around 1991, we turned the corner to be profitable. In 1993, we were able to get legislation passed to allow breweries to sell beer by the glass, and also got a law passed to reduce the tax burden on brewers.” That same year Bell’s became Michigan’s first brewery to open their onsite pub, the Eccentric Cafe.

But of course, success never would have come without good beer. “We have an established culture of who are as brewers,” Bell explained. “Customers have bought into that. One thing we’ve done well is that we’re good brand builders. Other brewers do the ‘flavor of the month,’ but we’ve focused on building great beer brands.”

That brand focus will remain the key as Bell’s looks to the future and anticipates more change. “When I started out, the U.S. had about 100 breweries,” Bell pointed out. “Now there are over 8,000. There’s always lots of change, and craft drinkers are promiscuous. That’s why we have our pilot facility and make use of test markets. Now that we’re at a bigger size, we’re a lot more data-driven, and we do lots of focus groups. I think online interaction has a lot of untapped potential, where we can get real-time input into what people think. And it’s a lot cheaper than focus groups.”

As for specific products, Bell was noncommittal. “Right now, seltzer is hot,” he said. “Over the next couple years, that will play out and there will be price wars. There’s not a lot of differentiation. But the better-for-you category will be with us for a while. Anyone below Generation X is more health-conscious about their drinks. And IPAs will continue to rule the craft world–people love their hops.”

In the meantime, he’s happy with where he is. “Macro beer is a volume business,” he said. “There’s not a lot of money per unit, but there are a lot of units. Craft beer brought back margin, and that’s why it’s been successful. Brewing is capital-intensive. It takes a lot of money to get up and running, but once you are you can be around a long time. After all, it’s five o’clock somewhere.”

Follow me on Twitter or LinkedIn

9 views0 comments


bottom of page