May 11, 2017
It’s happening all over. The economy is steady yet, in the first quarter of 2017 alone we’ve seen more major retail outlets across the U.S. file for Chapter 11 Bankruptcy than in the whole of 2016. In the age of being able to order everything to your doorstep, physical retail outlets across the United States are being forced to re-imagine their industry; to pivot to survive.
Some of this doom-day buzz has begun to circulate in regards to the Craft Beer Industry; an industry that boosted the Michigan economy by $1.85 billion in 2014 according to a report released by Denver-based Brewers Association, an industry trade group.
Today, the media conversation looks a little different:
“Is the craft beer market in Grand Rapids saturated?”
“Concern over craft brewery saturation in West Michigan emerges among lenders,”
”Executive roundtable: Craft beverage makers struggle through internal divisions, market forces, threats”
These saturation concerns were touched on in a recent article in The MiBiz Journal on April 29th.
MLive also featured a March 22nd article addressing this issue. Many of the statements in the story touched on the concept that while competition has increased, it is not accurate to say the industry has reached a breaking point.
In the article, one brewer stated that:
“I am sensing that we’re not getting to a breaking point, but we’re going to be getting to some point of transition. A bubble isn’t going to burst in a negative way that affects consumers -- but I think we’re going to see a semblance of a more mature industry, which is going to start forcing brewers in this industry to start professionalizing what we do.” MLive
Regardless of opinion, the craft brewing industry in West Michigan has undoubtedly become more competitive in recent years. Consider these factors:
- Competition is up – In Grand Rapids alone, the number of active breweries has tripled since 2011;
- Professional experience plays a roll – It’s not enough anymore to have the capital, see that the demand is hot, and jump into the craft-beer scene with no industry experience. The opposite is also true; hobby brewers with a great product are finding they are less qualified, in terms of business experience, than the competition is now demanding.
Brewery, tap-room, and distillery owners who have been hard at work professionalizing their craft may require professional services dealing with debt, vendors, or bank pressures. The right attorneys can help with efforts to streamline debt, negotiating with lenders, and generally review restructuring or reorganizing options that might be available for the business.
Keller & Almassian can help review these options with you. The lawyers at Keller & Almassian, PLC possess considerable experience in the areas of bankruptcy law, transactional law, receivership, business insolvency, and litigation.
Our firm has experience working with craft brewery companies in the reorganization and bankruptcy arena. Even in stressful times, reorganization or bankruptcy is not always inevitable and you may have any number of options. We can meet with you to assess your company's debts, assets, cash flow projections, and your goals. This will allow our team of board certified bankruptcy and litigation attorneys to determine whether bankruptcy or non-bankruptcy options might fit your needs.
The attorneys at Keller & Almassian can assist you in taking the next step to help your craft-beverage small-business. Contact our attorneys at our Grand Rapids location to inquire further.