E-Malt.com News article: USA, MI & IL & PA: Short’s Brewing Co. decides to expand distribution to Illinois and Pennsylvania

A Northern Michigan craft brewer has decided to expand the distribution footprint of its products to out-of-state markets for the first time, MiBiz reported on January 28.

While it had once proclaimed it claimed it would remain “Michigan only, Michigan forever,” Short’s Brewing Co. of Bellaire and Elk Rapids has decided to start selling its Short’s brand of beers and Starcut Ciders in Illinois and Pennsylvania, a market where the company had a relationship with a distributor.

The reason: The company has an excess capacity of 10,000 to 12,000 barrels per year at its brewery and saw its growth within Michigan start to become capped, according to CFO Brian Beckwith.

“We’re not growing just for the sake of growing, we’re growing to use up capacity we have,” Beckwith said, noting Short’s has the capacity to brew 52,000 to 53,000 barrels of beer annually.

Calling the move purely a business decision, one that came after considerable discussion within the company, Beckwith said Short’s remains in the “exploration phase” to get licensed in other states and then approach distributors about possible further geographic expansion.

“We thought Michigan would absorb all beer we could make,” he said. “(Expanding distribution) was a very difficult decision that we debated over the last six weeks, but based on some things we saw at the end of the fourth quarter in 2015 and how we were going in sales, we realized we needed to push some excess capacity outside of the state. We wanted to be ahead of the curve and not do it as some sort of reaction.”

The first shipments will take place Feb. 5.

In a handwritten letter posted on the company’s website, founder Joe Short said the highly competitive Michigan market and limited retailer shelf space contributed to the decision to expand.

“As you probably know, the number of breweries popping up in the past seven years has increased tremendously. While our Michigan craft beer is thriving, my observation is that there is simply too much awesome beer on the shelves for everyone to enjoy sustainable growth in the near term,” Short wrote.

The move to sell in new markets comes “in order to do what is right for our company and our community,” he said.

“I have an amazing product, capacity to brew more beer, and a badass crew working hard in Northern Michigan to consider,” Short wrote. “We want to continue to grow and do awesome stuff, but we don’t want to sell out to investors or another brewery.

“We currently have both the capacity and the personnel to sell more beer and cider than just the Michigan market, without compromising the quality of service to our home state.”

According to a press release, the craft brewery boosted distribution in its only market — Michigan — by 24.2 percent last year.

The company, which just released the 5,000th batch of beer to be brewed at its Elk Rapids production facility — it also brews at its pub and taproom in Bellaire — also expanded its product offerings with the addition of a new bottling line to fill 22-ounce bomber bottles. The first beer through that line, Batch 5000, a triple India pale ale, will see limited distribution throughout Michigan, but more releases in that format are planned this year.

For the brewery that long touted it would remain focused only on the Michigan market, the company’s commitment to the state has not been diminished in any way, Beckwith said.

“We’re brewing beer in Michigan and we’re bringing money back to Michigan,” he said. “We have a ton of Michigan pride, and this doesn’t change that all.”


29 January, 2016