Thursday, May 21, 2009

Talking Head: Bell's Brewery's Larry Bell inspired to do things his way

Posted By on Thu, May 21, 2009 at 6:09 PM

click to enlarge Larry Bell at his Michigan brewery
  • Larry Bell at his Michigan brewery

The craft beer industry is full of colorful characters from Dogfish Head's extreme beer advocate Sam Caliagione to Lagunitas' Zappa fanatic and cannabis apologist Tony Magee. Between those representing the East and West coasts respectively, you'll find self-described eccentric Larry Bell, founder of Bell's Brewery of Kalamazoo, MI. From selling homebrew cooked up in a 15-gallon soup kettle, Bell has become a leading brewer in the Midwest, moving into a new facility in 2003 that's already been expanded twice and now has a capacity of 140,000 barrels. Over 110,000 barrels were brewed last year, making Bell's the 13th largest craft brewer in the country. Bell's is now distributed in 17 states, including Georgia, where it's rolling out this week.

With the tagline "Inspired Brewing," Bell's emphasizes its dedication to craft beer excellence. Batch numbers printed on the bottle can be entered on the company's website to get information on brewing and bottling dates. The brewery turns out 7 year-round beers and 10-12 seasonals, along with one-time releases such as the Batch series of commemorative beers. In the first round of shipments, Georgia will see the Amber Ale, Porter, Pale Ale, Third Coast Old Ale, and Kalamazoo Stout from the year-round stable, along with the wildly popular wheat ale, Oberon, which is the company's only summer release and accounts for close to half of the brewery's output. Because of the shortage of particular strains of hops, the Two-Hearted Ale, a brisk, hoppy IPA, will not make it to Georgia until later. "In the summertime we're so busy brewing Oberon that it's tough getting to those other specialties. Come September we'll be able to offer up a little bit larger portfolio," Bell says.

Bell's has managed to continue its growth despite pulling out of Illinois in late 2006 as a result of a dispute with its distributor, which is just one of the many eccentric moves Larry Bell has made. Bell ran afoul of the notorious three-tier system in Illinois, where distributors can sell distribution rights to a brand without the consent of the brewery. In addition, Illinois, like many states (including Georgia) has "franchise" laws that prevent breweries from dropping their distributors if they're unhappy with their performance. In essence, once signed to a distributor, a brewery loses all control over how their beer is sold.

When Bell's distributor, Union Beverage, sold their rights to distribute Bell's to the Miller distributor, Bell decided that his whole line of offerings would not get the proper attention. Rather than risk declining sales for its more esoteric styles, Bell decided to pull out of the state entirely, losing over $1 million in yearly sales, 10% of its market.

Bell had the last laugh, though. In 2007 he did an end-around by bringing in two completely new beers under Bell's former name, Kalamazoo Brewing Company, fully expecting to get sued by Union beverage's parent company, National Wine and Spirits. In fact, NWS had promised Bell that they would make the lawsuit as long and as expensive as possible. But no lawsuit ever materialized. Then, last year, NWS sold their Illinois distributors and ceased operation in the state. Now Bell's has re-entered the Chicago market with new distributors.

Still, Bell cannot rest on his laurels. The regulations protecting distributors are still in place in most states, and he's now embroiled in yet another dispute, this time with one of his home state distributors, Classic Wines, Ltd. "Our distributor in Lansing for 22 years, a small guy, decided to sell his beer business to the big Bud houses that are over 99 percent Anheuser-Busch products, and we said no," Bells says. They will be facing more than the distributor in court. "The Michigan Beer and Wine Wholesalers Association are pooling all their money to fight me in court. The one distributor has the backing of the whole industry against me. We have offered to buy him out at the price the Anheuser-Busch people have offered, but it's not about the money, it's about control."

Bell may be crazy to take on the big boys, but so far he's proven to be crazy like a fox. He started his business in 1983 as a homebrewing supply store, then began selling his homebrew in 1985. In 1986, the company managed to produce 135 barrels, less than 300 kegs. By 1989, Bell felt like he could take on a wholesaler to distribute the 500 barrels of beer he was turning out a year. After struggling through the first craft beer industry fallout in the early 1990s, Bell's gradually increased capacity at its Kalamzoo brewhouse until 2003, when it became necessary to move into a new modern facility in nearby Galesburg.

The Kalamazoo brewery, with its attached pub called, naturally, The Eccentric Café, continues to produce test batches and in-house beers, and is where the lawsuit-weary founder finds some stress relief. The brewery celebrates the release of its winter warmer each year at the café with its annual Eccentric Day in early December. "The Eccentric Day grew out of a beer I used to make called Dr. Bell's Medicinal Ale. It was a way to celebrate our individuality in a way that the big breweries never get to do. We're odd and eccentric and we dress up goofy. I like to say that Eccentric Day is about exploring the deepest, darkest corners of both your personality and your closet."

In 1997, Bell told Brewing Age magazine he would be happy to reach a nice stable level of 30,000 barrels. "We'll just try to make some decent money and still have some fun." So with all the legal issues and turning out nearly 4 times that volume, is he still having fun? "Um, I'm trying to," he laughs. "It's gotten to be a bit more of a job. I'm actually on this trip [to northern Michigan] to work on some of the creativity, just to get away from the brewery and try to clear out some of the bullshit that I wind up dealing with all the time."

Bell's specializes in stouts, including the highly-rated Expedition Russian Imperial Stout and Special Double Cream Stout, a tough sell in Georgia. Bell is confident that there is a market out there for his special brand of brewing. "The good thing for us is that so many students from around here, when they graduate there are no jobs so they move to Georgia or the Carolinas or Florida, and they take their love of their homestate beer with them. Its almost like viral marketing for us because we have all these transplants all over the country."

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