In an era of unexpected, dramatic change in almost every segment of the economy, the craft beer industry is braced for new competitors. That includes one challenger that might be a surprise to some:
“Cannabis is a huge part of what we look at right now,” Mark Rieth, owner of Michigan-based Atwater Brewery, told the audience at the 53rd Annual MSU Detroit Executive Forum on Wednesday, Oct. 24 in downtown Detroit, which focused on “The Business and Science of Beer” and was co-sponsored by the Eli Broad College of Business and the College of Engineering.
Rieth cited a study that claims cannabis can cut into male beer consumption: “We have a whole new world coming about here in the next few years, and we’ve got to keep a real close eye on that. It’s going to affect the overall beer industry pretty significantly.”
Rieth (BA General Business Administration, ’89) was part of a forum panel that included Larry Bell, founder of Bell’s Brewery in Kalamazoo; and Tony Grant (BS Engineering, ’02; FTMBA ’05), CEO and partner of Northern United Brewing Co.; and moderated by Shannon Long (BA Marketing, ’14), founder and CEO of Brew Export and host of the “Pure Brews America” television show, which features Michigan’s craft beer industry.
Bell, one of the craft beer industry’s pioneers and giants and a long-time friend of the Broad College, showed less concern about a cannabis challenge. He said a trade association economist’s study shows in “states that have legalized recreational marijuana, beer consumption is actually up.”
The role of fending off challenges is quite a change for the craft beer industry, which has seen its products go from being novelty beverages to virtually mainstream in recent years.
In 2017 Michigan was home to 330 craft breweries, fourth-most in the nation, according to the Brewers Association (BA). The number of craft breweries in Michigan tripled between 2011 and 2017, and the average Michigander 21 and older drinks almost four gallons of craft beer annually.
But tastes have been changing as of late: “Spirits and wine are kind of kicking our butts. We’ve got to be smart about what you do,” Rieth said, adding that his company has been diversifying its product lines to include hard seltzers.
Grant, a former MSU football player, wondered if that was the right approach for beer experts to take: “Do you want to take your eye off the ball? Your core competency is making beer … you can easily get distracted by the next shiny object.”
The annual forum, started in 1965, has hosted top executives and entrepreneurs from a wide-spanning variety of local and regional Fortune 100 companies. Last year’s event featured Jim Hackett, CEO of Ford Motor Company.
“This is an event that we really look forward to every single year,” said Sanjay Gupta, dean of the Broad College. “I am delighted with this theme which allows us to focus on what is happening in this great city of Detroit. If you think about all the changes that have taken place in the economy, this is an example that we ought to be focusing on … In some sense, if you reflect on it, this is what the Spartans are all about: embracing change; embracing entrepreneurship; embracing the idea of, how do we evolve what it is that we are doing?”