USA, MI: Eastern Market Brewing Co. to acquire Axle Brewing Co. in Ferndale

Fast-growing Eastern Market Brewing Co. will buy Axle Brewing Co., the brewery and taproom in Ferndale that closed in June after two years, the Crain’s Detroit Business reported on September 20.

The elephant-themed microbrewery plans to open a second operation outside Detroit, even as it plans to expand its home operations in the Eastern Market food district just northeast of downtown, according to a news release. In the agreed-upon deal, Eastern Market would take over and rebrand Axle's 10,000-square-foot Ferndale base that housed a restaurant, taproom, beer garden and production equipment at 567 Livernois St. in southwest Ferndale.

The Deroit brewer expects the purchase deal to close once all its licensing is approved, said Dayne Bartscht, managing partner of Eastern Market Brewing. It would aim to open afterward, possibly in late 2019 or early 2020. Bartscht declined to disclose terms of the purchase.

The Detroit Free Press first reported the deal.

The move would triple the Detroit brewer's total production capacity to approximately 3,000 barrels a year, grow its can selection and allow it to experiment with barrel-aged beers, it said in the release. It would also move packaging operations there.

The incoming taproom and eatery is dubbed the Ferndale Project for now, Bartscht said. The team is still concocting a branding plan, but for now an egret logo adorns its Facebook page. The bird species is known for symbiotic relationships with elephants, Bartscht said.

The second location would focus on the "hop-forward IPAs and fruit-forward sours that have driven much of our success to date," the brewer said in a Facebook post. Also, Eastern Market Brewing gets a full kitchen. In Eastern Market, it serves food out of a food truck.

Aside from new branding, the space will look nearly the same, Bartscht said. He expects to grow from 20 employees to around 30-40.

The president of Axle, Dan Riley, and co-founder Carolyn Bellinson will retain ownership of the building.

Riley declined to comment to Crain's.

"I've had the utmost respect for Dan and what he built in Ferndale," Bartscht said. "He opened his taproom right around the same time we were opening our taproom. We developed a relationship at that point … I reached out to him when it was announced Axle was closing, just to offer my sympathy and support, and that conversation blossomed … and got us to where we are today."

Axle Brewing said in June it decided to close because it didn't see a "clear path to profitability" and struggled with lean distribution margins. The brewer had said it was looking at potential acquisitions or partnerships.

Meanwhile, Eastern Market Brewing is pacing to hit close to $1 million in revenue for the first time since it opened in 2017 at 2515 Riopelle St. It is still planning to expand its home base, alongside expanding outside the city to Ferndale. But the focus on the new plans will likely push back the expansion timeline, Bartscht said.

The Detroit brewer wants to build out a walk-up beer window next door, as well as expanded seating, a shiny new facade and — later — a rooftop beer garden.

Eastern Market Brewing is ramping up its distribution businesses, but faces a major roadblock when it comes to how Michigan law restricts self-distribution.

Axle joined at least 14 other breweries in Michigan that have closed since Aug. 20, 2018, Crain's reported last month in an article that explored whether the craft beer boom is over. While the number of breweries in the U.S. grew from just 1,653 in 2009 to 7,450 in 2018, according to data from the Brewers Association, it seems to some experts that the industry's success is beginning to fizzle. But breweries continue to open, seeing opportunity, and others are diversifying to remain profitable.

24 September, 2019