Beer City’s keystone brewery turns 25

Founders Brewing has had a turbulent history, but continues to push forward in Grand Rapids.
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CEO Elton Knight and co-founder and President Dave Engbers

A few years back, I was sitting in the office of Founders Brewing co-founder and President Dave Engbers when my phone buzzed.

It was a text from my dad. My parents were in Europe at the time, so I excused myself from my conversation with Engbers and checked what the message said. Thankfully not an emergency, it was a rather coincidental encounter. My dad was at the John Bull Pub in Aalborg, Denmark, enjoying a Founders All Day IPA. 

“The bartender knows all about Founders and Grand Rapids!” my dad’s text read. 

Engbers laughed, acknowledging the wide growth the brewery had obtained. It was indeed a crazy thought for the brewery that at several times in its history was near bankruptcy. Rather than shutting down, it turned 25 years old this year and has become a significant Grand Rapids employer and one of the city’s biggest, most visible exports.

Grand Rapids would not hang the banner of Beer City it does now without Founders. Its beers are found across the globe and has been revered throughout much of its history for its quality. It helped transition Furniture City USA into its new, current growth trajectory — making sure people knew about Grand Rapids for something it currently produces rather than a residential furniture industry that left long ago. 

As Travel Michigan’s Dave Lorenz said elsewhere in this magazine this issue, “They know they have office furniture, but they don’t know where it’s made.” 

Beer drinkers likely don’t have that problem with Founders beer, with packaging that proudly claims Grand Rapids as home.

Once a poster child of the innovative craft beer industry, pushing boundaries with its big beers like Dirty Bastard and Kentucky Breakfast Stout, now simply KBS, and growing to look toward the mass beer market with its All Day IPA and the packaging innovation of 15-packs, the brewery is majority-owned by Spanish brewing giant Mahou San Miguel. And for all the positives Founders has brought the West Michigan community, it is not without its controversies.

Through it all, however, has been Engbers. His co-founder, Mike Stevens, stepped down from his CEO role in January, and was recently replaced by Elton Andres. At one point in my dozens of conversations with Engbers and Stevens, in 2012 for the 15th anniversary, I asked them if they could do it all over again, would they. Stevens said no. The first 15 years were nothing short of challenging, but the past ten years have likely changed that — after all, Engbers joked that Stevens was off somewhere on a beach with his shirt unbuttoned. 

“I always say there’s a lot of scars people don’t know about,” Engbers told me in September over Oktoberfests in the Grand Rapids taproom when I reminded him of that exchange. “It’s a very personal question. Mike and I see things much differently. People say we’ve got this beautiful facility, a great taproom, beer garden, not to mention our other facility down the road. 

“A lot of it just comes from tough memories of the first ten years, just not knowing whether we’d be in business 60 days later and what does that mean to lose your house, or, I mean I used to get my electric turned off and we never even thought about having cable TV.”

Engbers said he didn’t take a paycheck for at least eight months straight at one point, because if he did they wouldn’t be able to buy glue sticks to close their beer cases. He compared Founders to a rock band, and that works as an incredible analogy to explain how the beer world views Founders. 

“It’s a lot like when a rock band makes it and they go from playing little clubs to sharing a hotel room with five or six people, but then they start playing stadiums and when they start playing stadiums, they’re no longer cool,” Engbers said. “It’s like, yeah, but now they’re playing stadiums. 

“But you look back and ask, what’s been the best experience. Oftentimes, people will say, ‘Oh, when we used to drive around in that van. So, not to be one of those old guys with gray hair, but it’s like, I do think some of our best times were when we’d do anything, you’ll sacrifice anything to stay in business and keep the dream alive. We had plenty of times we had opportunities to call it quits.”

Now that Founders is one of the craft beer industry’s prime examples of a rock band playing in a stadium, it has run into plenty of detractors saying they’ve sold out, gotten too big and the quality’s changed or simply aren’t cool anymore. But just like former Nirvana drummer and Foo Fighters frontman Dave Grohl made a documentary about band’s starting in vans, What Drives Us, and by all appearances remains the same guy over all these years, Engbers too remains an incredible ambassador for beer and Grand Rapids, an aloof, laid back man who is eager to share a beer with just about anyone. Experience Grand Rapids, which markets Grand Rapids as a tourism destination, often takes Engbers along to industry events, looking to help position the city as a cool place to be.

And the thing that drives him and Founders, remains the same today as it was back when the brewery started: beer.

“Beer has always been this conduit that brings people together, it’s just that social beverage that is accessible to everybody, all walks of life,” Engbers said, echoing the foreword he wrote for my 2015 book, Grand Rapids Beer: An Intoxicating History of River City Brewing. “When we started writing our business plan, there were about 300 breweries in the U.S. By the time we actually opened up there were about 600 and we thought our window of opportunity was closing. Now we’re these veterans with about 9,000 breweries in the country and we’ve seen our brand go from one of the extreme breweries to creating the first sessionable IPAs and a pioneer of putting craft beers into aluminum cans.”

Now, instead of bankers, Founders is thrown constant market changes, from beer trends to a resurgent spirits market and the high-paced growth of hard seltzers and canned cocktails.

When thinking about how the Founders perception has changed in the US craft beer industry, national beer writer Joshua M. Bernstein said the brewery’s journey really started as a David vs. Goliath story. As it turns out, however, an industry’s darling followed a path that almost any business would love. 

“The reality is, it’s the beer business and that second word is sometimes overlooked,” said Bernstein, who’s 10th anniversary reissuing of The Complete Beer Course comes out next year.  I first become aware of Bernstein when his first book, Brewed Awakening, which features Founders, was sitting on the table in the Founders office lobby back in 2012.

“Founders, in so many ways, we’re talking 10 or 15 years ago, helped change the perception of what a barrel-aged beer was and we can’t deny the impact of All Day IPA.”

While some have shied away from Founders because of its status as a behemoth among the big beer world, others have turned away from the brand because of its highly publicized racial discrimination case against a former employee. Founders eventually settled with former employee Tracy Evans, who alleged Founders tolerated a “racist internal corporate culture” and that the company fired him because he complained to human resources about the racism.

While both of those factors have perhaps knocked the brewery down a peg or two when it comes to how the industry views the brewery, for many, it probably simply does not matter.

“Sometimes, companies can be messy,” Bernstein said from his New York City home. “Quality is just one metric upon what a modern brewery stands on. It’s branding, aesthetics and how you treat other people. It’s hard with so many options and if you are a consumer that wants to learn about brands, it can be a make or break factor. But, most people look at beer as Friday night fun or a happy hour treat, we get in these bubble worlds and most people don’t know it other than a good beer.

“Will Founders ever be the cool kid on the block again? Probably not, but it’s a fairly priced beer that tastes good and that’s the reality of the beer business. As much as some of us want to think about it, for most people, a beer purchase is no different than granola, it’s another considered purchase when you’re doing a supermarket stock up.” 

Back in Grand Rapids, Engbers said while the majority owner is in Spain, he will continue to argue Founders is a very local company – and plenty of tourists make a pilgrimage to the taproom on an annual basis. 

But thinking about his company as a business, he and Stevens knew there was a door closing before Mahou took its first 30% stake in the company in 2014. Mahou later acquired another 60% in 2019, with Engbers and Stevens retaining 10%. 

“When we started seeing acquisitions, when Anheuser Busch started buying breweries, Miller Coors started buying breweries, as a business owner it would have been irresponsible not to look at that,” Engbers said. “We had a lot of private equity groups looking at this as an opportunity to make a lot of money and we knew we had a responsibility to ourselves and shareholders to look at it. Partnering with Mahou, people kind of scratched their heads at it because I think people wanted to get upset but a lot of people who’ve taken business classes said, ‘Oh, that’s a good move.’

“But our timing, we recognized in 2014 there were about 7,000 breweries and our window was closing before the industry changed dramatically.” 

Sure enough, shortly after Founders sold its first stake, fellow hot brewery Ballast Point Brewing from San Diego sold for $1 billion in 2015 to global spirits brand Constellation Brands. A few years later in 2019, Ballast Point’s brand cache was all but dead and sold to a strange Chicago-based brewery called Kings & Convicts from Chicago for an undisclosed amount, but industry experts estimated it to be less than $200 million.

Unlike Ballast Point, however, Founders has been able to keep its momentum – albeit slowing down with much of the overall industry – and has remained a powerhouse in the beer world. It’s unlikely a brewery will ever meet the trajectory Founders hit, brewing less than 10,000 barrels of beer in 2007 to brewing more than 600,000 in 2019.

At one point, especially by the mid-1990s, Grand Rapids was, as Engbers called it, a “sleepy little town.” There were times it was called Bland Rapids. A former mayor said you could roll a bowling ball down Monroe Center after 5 p.m. and not hit anybody. 

Grand Rapids is anything but that sleepy little town and there are many more plans in the future to continue its growth. Founders can take at least a bit of credit for helping it on its current path.

“I don’t think we can take all the credit, but I think we can take a hell of a lot of credit because this really is just about bringing people together,” Engbers said. “It’s great to see what happened to this town and I think beer played a role in it, but obviously Van Andel Arena played a huge role, Meijer Gardens played a huge role. It all speaks highly to our community here and beer is kind of a cool thing that people like to read about. But the conduit of beer has brought a bunch of different people together here.”

Founders started as a small brewery on Monroe Avenue, in the Brass Works Building, becoming a cult favorite among Grand Rapidians while it struggled to pay the bills before finally breaking out into the world of beer and becoming the aging global rockstar it is. Engbers followed a passion spurred by a home-brew kit his mother gave him at 18 and the brewery grew well beyond any aspirations he and Stevens set out to build. 

“The intent was not to become a national player, it was to start a brewery and we had no idea how to do that,” he said. “The parameters changed significantly when we went from starting a little business to being responsible for 500 employees and families and their salaries and 401ks. You can’t control it, it becomes a much bigger animal.”

With Founders a global brand and in the hands of a parent brewery that’s been around since the late 1800s, it is probably safe to say Founders will remain an anchor to downtown Grand Rapids for at least another 25 years. But how long will its founders remain connected to it? That is to be seen. Stevens still sits on the board and Engbers still has his day job. Plenty of other early Founders executives have gone on to other beverage endeavors.

Are second generation Engbers in line to helm an office on Granville Avenue?

“I know a lot of brewery owners and their kids don’t have a huge interest in getting involved in the business,” Engbers said. “I think that’s one of the things that any company faces, whether it’s a restaurant or a baker, they grow up in it and they say, ‘Yea, I don’t want to do that.’

“I’ve got kids who say they’re kind of interested in getting into the beer industry, but, you know, listening to a 10-year-old say he really wants to be a brewer …

“I’m like, ‘Eh, maybe you wanna be a farmer.’” 

 

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