Wealthy Street Mega Thread

[GRyan]

News on 710 Wealthy. Although I'm not really into pottery I think this would be a great addition to this stretch of Wealthy

https://www.mlive.com/news/grand-rapids/2019/08/pottery-studio-to-renovate-aging-grand-rapids-building.html

[GR_Urbanist]

#1 Thank goodness that this building is finally going to see some action!

#2 This actually reminds me of a place I would pass by going to and from my hotel when I was in Manhattan. There was a little pottery studio that would be open fairly late into the evening called "Mud Matters"

And with a massive set of windows like this will have, I may find myself making walks past it to gawk like I did in NYC!

Edited August 19, 2019 by GR_Urbanist

[discgrab21]

https://mibiz.com/sections/food-agribusiness/spanish-brewer-mahou-to-acquire-founders-brewing

Mahou-San Miguel Group increasing its ownership stake in Founders from 30% to 90%

 

[wingbert]

32 minutes ago, discgrab21 said:

https://mibiz.com/sections/food-agribusiness/spanish-brewer-mahou-to-acquire-founders-brewing

Mahou-San Miguel Group increasing its ownership stake in Founders from 30% to 90%

 

Welp, nice knowin’ ya Founders.

[grandrollerz]

Legacy Brewer, not craft. Interesting way to avoid the macro Brewer label. I guess it fits.

If this means they can their NA beer, I'm all for it. I know mahou pushed them to even make it, but it's a growing segment. 

I say good for them. Things grow, things  change. 

[mpchicago]

Hoping for the very best, but can't help to have that awful image in the back of my mind - 10 years down the road  - Mahou-San Miguel clearing house in Grand Rapids for one reason or another.   

Here's to continued growth and prosperity for Founder's....in Grand Rapids.

[egrguy]

San Mahou has been a family owned brewery for generations. Of all potential partners to sell to, I think they're a great fit. I'm sure this 60% stake wasn't valued at $200m like the original purchase. 

A side note, I'm curious to the investor list that are getting large payouts. Could also be an indirect benefit to GR as well.

[joeDowntown]

Pipe dream here, but I'd love to see Mahou San Miguel move their US headquarters to Grand Rapids. If they're pushing into the US market, maybe GR would be an ideal put their US marketing, operations and leadership teams? 

Can you buy Mahou / San Miguel beer in the US?

Joe  

[kwl]

3 hours ago, egrguy said:

San Mahou has been a family owned brewery for generations. Of all potential partners to sell to, I think they're a great fit. I'm sure this 60% stake wasn't valued at $200m like the original purchase. 

A side note, I'm curious to the investor list that are getting large payouts. Could also be an indirect benefit to GR as well.

Agree,  based on Dogfish Head, I’d be surprised if this came in at < $750 Million given the strength of brand, assets, sales growth, capacity, etc. 

From what I’ve always heard, their cap table has been an absolute mess (although this was before the 2014 round). I’m certain there were a few people drinking and retiring early last night, but I’ve also heard there were (in the early days) absolutely dozens of shareholders. Extrapolate that across multiple and significant dilutions  and your guess is as good as mine. 

Also, an important thing to remember, these transactions are typically asset sales. I’m just speculating here, but I can’t imagine the state of their balance sheet given the amount of capital expenditures they’ve had over the past decade. If indeed an asset purchase, all those debt holders are getting bought out in advance of any equity distributions. 

[gvsusean]

4 hours ago, kwl said:

Agree,  based on Dogfish Head, I’d be surprised if this came in at < $750 Million given the strength of brand, assets, sales growth, capacity, etc. 

From what I’ve always heard, their cap table has been an absolute mess (although this was before the 2014 round). I’m certain there were a few people drinking and retiring early last night, but I’ve also heard there were (in the early days) absolutely dozens of shareholders. Extrapolate that across multiple and significant dilutions  and your guess is as good as mine. 

Also, an important thing to remember, these transactions are typically asset sales. I’m just speculating here, but I can’t imagine the state of their balance sheet given the amount of capital expenditures they’ve had over the past decade. If indeed an asset purchase, all those debt holders are getting bought out in advance of any equity distributions. 

Personally, I can only see this as having a high likelihood of being a bad thing for GR. There is no real reason to keep Founders in GR. It’s location is not optimal for distribution. The loyalty of the people is to the brand not the location. No international airport for San Miguel clients and staff. I bet they end production and all office staff and just keep the bar (if even that).

[joeDowntown]

7 hours ago, gvsusean said:

Personally, I can only see this as having a high likelihood of being a bad thing for GR. There is no real reason to keep Founders in GR. It’s location is not optimal for distribution. The loyalty of the people is to the brand not the location. No international airport for San Miguel clients and staff. I bet they end production and all office staff and just keep the bar (if even that).

They have to be located somewhere, why not here? They bought the brewery in Colorado for west coast distribution, I don’t necessarily see there being a downside to staying in Grand Rapids. 

Joe

[GRDadof3]

16 hours ago, gvsusean said:

Personally, I can only see this as having a high likelihood of being a bad thing for GR. There is no real reason to keep Founders in GR. It’s location is not optimal for distribution. The loyalty of the people is to the brand not the location. No international airport for San Miguel clients and staff. I bet they end production and all office staff and just keep the bar (if even that).

I agree. These type of buyouts rarely if ever are good for the GR area. There may be a few exceptions but when you look at locally owned manufacturers around here that were bought by international firms, the local crew basically is just manufacturing people and not top brass. Most Founders drinkers do not care that it's based in Grand Rapids, and I think only 20% of Founders' sales are in Michigan now. We shall see if Mahou thinks there is value in keeping the main production hub here.  I believe there are a ton of layered tax credits in all of that recent growth that they'd be on the hook for if they skipped town. 

I will add though that it's definitely congratulations to Dave and Mike and the others. In business school they teach you to grow a business with the ultimate goal of selling it. And that's what they did. It's textbook business success story. But the feeling of pride for Grand Rapidians having Founders here is pretty much gone, in my mind. 

[RegalTDP]

6 hours ago, GRDadof3 said:

I agree. These type of buyouts rarely if ever are good for the GR area. There may be a few exceptions but when you look at locally owned manufacturers around here that were bought by international firms, the local crew basically is just manufacturing people and not top brass. Most Founders drinkers do not care that it's based in Grand Rapids, and I think only 20% of Founders' sales are in Michigan now. We shall see if Mahou thinks there is value in keeping the main production hub here.  I believe there are a ton of layered tax credits in all of that recent growth that they'd be on the hook for if they skipped town. 

I will add though that it's definitely congratulations to Dave and Mike and the others. In business school they teach you to grow a business with the ultimate goal of selling it. And that's what they did. It's textbook business success story. But the feeling of pride for Grand Rapidians having Founders here is pretty much gone, in my mind. 

I agree that there might be changes to the business model that could hurt GR, but I also think Mahou has an interest in keeping the Founders legacy close to its roots.  Founders is a much more visible business than other manufacturers, and isn't going to just wither away from the local consciousness.  I don't agree with the sentiment that "most Founders drinkers don't care where it's from."  Most beer drinkers just don't drink craft beer period, but those who do care enough to drink craft beer tend to be curious about where the beer is made - I think that's a unique aspect of craft beer culture.  But that's beside the point.

Mahou stated explicitly they want to grow these brands, and beer brand marketing is all about the narrative.  I know more about Jim Koch, the Busch family, and the Lienenkugels than I ever cared to, and I have their ad agencies to thank for that.  In the same vein, I think we'll see campaigns centered around Mike and Dave's story: "Two guys from Michigan who had a dream [cue the heartwarming music]," coupled with images of salt-of-the-earth workers with tattoos and beards walking proudly between silver fermenting tanks.  Founders isn't just a beer - it's 'Murica.  Mahou will want the story to be part of the brand, and keeping the local operation alive will be essential to telling the story.

To give an example, even after being acquired by Duvel, Boulevard's Kansas City brewery is still kicking, and is a tourist draw.  They're still putting out beers with KC-centric themes, including one where they collaborated with a local rapper. Same with Golden Road (bought by InBev) here in LA.  I believe ultimately that is what Mahou wants for Founders.  I could be wrong, but I'd be surprised if they tried to have it any other way.

So, regardless of what they do to the top brass and/or the current operation, I don't think they're "leaving" GR as a brand.  If Mahou succeeds, Founders will be forevermore attached to GR.  If they fail, then Founders will go away, everything will close, and 20 years later we'll see the beer resurrected as a cheap watery pilsner after Pabst acquires the name.  So let's hope it succeeds. 

Edited August 31, 2019 by RegalTDP

[cutlervillegr]

On 8/31/2019 at 8:27 AM, GRDadof3 said:

I agree. These type of buyouts rarely if ever are good for the GR area. There may be a few exceptions but when you look at locally owned manufacturers around here that were bought by international firms, the local crew basically is just manufacturing people and not top brass. Most Founders drinkers do not care that it's based in Grand Rapids, and I think only 20% of Founders' sales are in Michigan now. We shall see if Mahou thinks there is value in keeping the main production hub here.  I believe there are a ton of layered tax credits in all of that recent growth that they'd be on the hook for if they skipped town. 

I will add though that it's definitely congratulations to Dave and Mike and the others. In business school they teach you to grow a business with the ultimate goal of selling it. And that's what they did. It's textbook business success story. But the feeling of pride for Grand Rapidians having Founders here is pretty much gone, in my mind. 

I think what tends to happen in situations like this is stagnation for Founders in GR.  Instead of seeing growth for Founders GR operations, instead you see further growth opportunities move elsewhere.  

Let's say Founders needs to expand capacity in 2022 (hypothetically).  Before this, it probably would have involved purchasing or building in GR.  Now, new operations may crop up somewhere else in the country.  The corporate PR machine will say that opening a plant in Texas helps cater to the large population there, that this isn't replacing GR operations, this is a good thing for Founders, etc.  Then, in 2025, a bottling line is shifted from GR to Texas.  This continues until not much is left in GR.  

I hope I'm wrong.  But there are innumerable examples of this occurring in many industries across the country.  Time will tell, but while it may be a positive for Founders and their investors, it probably won't be the optimal development for GR and West Michigan.  

The other problem is that profits won't be filtering into GR.  Profits go to the corporate headquarters and philanthropy, investment, etc. stay there and not in GR.  

[egrguy]

They (Mahou) already purchased Avery out of Colorado. Saves $5 a case in distro cost. When you're trying to sell some high volume beer like All Day, Solid Gold and Pilsner that's a huge difference to remain competitive. I'd imagine we will see them purchase a brewery in the SE. 

Things can always change, but most of these brewery purchases haven't resulted in the former independent brewery being abandoned.  

Ab InBev is considering the evil bad guy in craft and Goose Island still around in Chicago and Elysian in Seattle, etc. 

[mgreven]

I wonder if they sold to avoid offers from AB InBev and other big places. Maybe they figured in the hands of a family owned brewery from Spain was the best best if they wanted a partner or to sell out. I’m kinda bummed but would be more bummed if it was AB. I guess when in San Diego I wanted to check out Ballast Point and Stone. Ended up at Stone and on the tour they were very clear that they were independent and mentioned Ballast Point wasn’t anymore. I didn’t really even know that and I feel like I pay attention to that stuff. I’m sure Founder’s fans will still make the trek to GR to see home base and hopefully it stays the same or bigger in GR. 

[gvsusean]

45 minutes ago, mgreven said:

I wonder if they sold to avoid offers from AB InBev and other big places. Maybe they figured in the hands of a family owned brewery from Spain was the best best if they wanted a partner or to sell out. I’m kinda bummed but would be more bummed if it was AB. I guess when in San Diego I wanted to check out Ballast Point and Stone. Ended up at Stone and on the tour they were very clear that they were independent and mentioned Ballast Point wasn’t anymore. I didn’t really even know that and I feel like I pay attention to that stuff. I’m sure Founder’s fans will still make the trek to GR to see home base and hopefully it stays the same or bigger in GR. 

It’s weird, but for some reason I’ve lost all pride in having Founders in GR. I always tell beer aficionados that I meet that Founders is in GR, but I almost feel ashamed to say it now. Is that weird? I don’t even want to drink their beer anymore. I’d rather just go to New Holland or something, at least it’s local.

[egrguy]

1 hour ago, mgreven said:

I wonder if they sold to avoid offers from AB InBev and other big places. Maybe they figured in the hands of a family owned brewery from Spain was the best best if they wanted a partner or to sell out. I’m kinda bummed but would be more bummed if it was AB. I guess when in San Diego I wanted to check out Ballast Point and Stone. Ended up at Stone and on the tour they were very clear that they were independent and mentioned Ballast Point wasn’t anymore. I didn’t really even know that and I feel like I pay attention to that stuff. I’m sure Founder’s fans will still make the trek to GR to see home base and hopefully it stays the same or bigger in GR. 

I know they were approached by others so I assume that includes AB InBev. I also know they really liked the multi generation family owned part  of Mahou. 

I took a brewery tour Friday and the rest of the group was a bunch of Brazilian guys here for work. I just dont see the issues with the purchase. 

The company I work for is Euro owned and I think the deep pockets have only made what's in GR stronger. 

I am generally very adverse to local companies getting bought out but I truly think this is a great fit for Founders to be vibrant long term.

[Guest]

I feel like Founders has really stepped up their mass production over the past few years.  Somewhere along the line they reached that sweetheart deal of selling 15 pack for $15.99 at Meijer.  I would guess Meijer sells more Founders than any other outlet.  You can't really find a better deal on a pack of IPAs anywhere.

Me, I'm more of a Bells guy.  Two Hearted is probably the best IPA out there.  Hopslam is awesome.  Not really a fan of Oberon anymore, they really tamed it down.  Their brewery just seems more... organic?  I'm still not a fan of the expansion of the Eccentric Cafe, I really liked the intimacy of the original concept and beer garden.

I think there's just more hype around Founders, especially their special releases like KBS.  Sorry, but I'm just not going to wait in line to spend $25 on a four pack of beer

[joeDowntown]

4 hours ago, gvsusean said:

It’s weird, but for some reason I’ve lost all pride in having Founders in GR. I always tell beer aficionados that I meet that Founders is in GR, but I almost feel ashamed to say it now. Is that weird? I don’t even want to drink their beer anymore. I’d rather just go to New Holland or something, at least it’s local.

It is kind of weird. I don't know why you'd be ashamed? Would you rather have Founders pick up and move completely? Would that in any way help Grand Rapids?

"Hey, we used to have this brewery in town. Grew from a tiny brewery, almost went out of business, but became one of the biggest in the industry. Then they moved out of town completely. Isn't that cool?!".

Joe

[gvsusean]

18 minutes ago, joeDowntown said:

It is kind of weird. I don't know why you'd be ashamed? Would you rather have Founders pick up and move completely? Would that in any way help Grand Rapids?

"Hey, we used to have this brewery in town. Grew from a tiny brewery, almost went out of business, but became one of the biggest in the industry. Then they moved out of town completely. Isn't that cool?!".

Joe

I feel like they did pick up and move. Founders is no longer “in” Grand Rapids. Just like Budweiser is no longer American. At least I don’t associate them being as such. I’m sure I’ll still go to founders it’s just  my deeper feeling about it.

[RegalTDP]

17 hours ago, mgreven said:

I wonder if they sold to avoid offers from AB InBev and other big places. Maybe they figured in the hands of a family owned brewery from Spain was the best best if they wanted a partner or to sell out. I’m kinda bummed but would be more bummed if it was AB. I guess when in San Diego I wanted to check out Ballast Point and Stone. Ended up at Stone and on the tour they were very clear that they were independent and mentioned Ballast Point wasn’t anymore. I didn’t really even know that and I feel like I pay attention to that stuff. I’m sure Founder’s fans will still make the trek to GR to see home base and hopefully it stays the same or bigger in GR. 

That's funny, because I feel like there's been growing antipathy lately toward Stone among the San Diego locals.  Maybe they're just getting too big, and too internationally-focused.  There's kind of a "I-liked-______-beer-before-it-was-cool" mentality down there anyways IMO.

11 hours ago, gvsusean said:

I feel like they did pick up and move. Founders is no longer “in” Grand Rapids. Just like Budweiser is no longer American. At least I don’t associate them being as such. I’m sure I’ll still go to founders it’s just  my deeper feeling about it.

Fair enough, but if it adds any perspective from this side of the country, Founders and Bells are the only two Michigan beers I can get from the supermarkets in my neighborhood.  They carry only a few other brands from east of the Rockies.  Two beers from Michigan out here and both from the West Side.  I ain't ashamed to tell people about them.

Edited September 2, 2019 by RegalTDP

[GRDadof3]

On 8/31/2019 at 2:07 PM, RegalTDP said:

I agree that there might be changes to the business model that could hurt GR, but I also think Mahou has an interest in keeping the Founders legacy close to its roots.  Founders is a much more visible business than other manufacturers, and isn't going to just wither away from the local consciousness.  I don't agree with the sentiment that "most Founders drinkers don't care where it's from."  Most beer drinkers just don't drink craft beer period, but those who do care enough to drink craft beer tend to be curious about where the beer is made - I think that's a unique aspect of craft beer culture.  But that's beside the point.

Mahou stated explicitly they want to grow these brands, and beer brand marketing is all about the narrative.  I know more about Jim Koch, the Busch family, and the Lienenkugels than I ever cared to, and I have their ad agencies to thank for that.  In the same vein, I think we'll see campaigns centered around Mike and Dave's story: "Two guys from Michigan who had a dream [cue the heartwarming music]," coupled with images of salt-of-the-earth workers with tattoos and beards walking proudly between silver fermenting tanks.  Founders isn't just a beer - it's 'Murica.  Mahou will want the story to be part of the brand, and keeping the local operation alive will be essential to telling the story.

To give an example, even after being acquired by Duvel, Boulevard's Kansas City brewery is still kicking, and is a tourist draw.  They're still putting out beers with KC-centric themes, including one where they collaborated with a local rapper. Same with Golden Road (bought by InBev) here in LA.  I believe ultimately that is what Mahou wants for Founders.  I could be wrong, but I'd be surprised if they tried to have it any other way.

So, regardless of what they do to the top brass and/or the current operation, I don't think they're "leaving" GR as a brand.  If Mahou succeeds, Founders will be forevermore attached to GR.  If they fail, then Founders will go away, everything will close, and 20 years later we'll see the beer resurrected as a cheap watery pilsner after Pabst acquires the name.  So let's hope it succeeds. 

You just summed it up perfectly for me. I buy national brands and shop at national stores like Costco and Target. But what "kept" me as a Founders fan was the local rags to riches story, community pride, and the brewpub "was" cool. But that's gone now. I actually haven't been to the brewpub in over a year; far better places in town to meet people for drinks.

People keep arguing that the workers are still local but Applebees employees are also local. But people shirk Applebees for being a national chain.. Many have said similar about Hopcat.

If they run ads like that it would be totally ridiculous in my mind. Do Mike and Dave even have a fraction of ownership anymore?

Either way the new and old owners don't care what the locals think. This is all about expansion and not being local. 

 

 

[thebeerqueer]

12 hours ago, GRDadof3 said:

If they run ads like that it would be totally ridiculous in my mind. Do Mike and Dave even have a fraction of ownership anymore?

Yes, Dave and Mike each retained 5% ownership.

12 hours ago, GRDadof3 said:

Either way the new and old owners don't care what the locals think. This is all about expansion and not being local. 

I had the pleasure of meeting some of the Mahou execs at Mike's house and they seemed very interested in meeting and talking with as many locals as possible about their view of the Founders brand. That may be a facade but it seemed genuine. 

I've shared this infographic before around the discussion of 'local' micro/large breweries and their ownership/local-ness. Some of these brands might be in your fridge right now and sure knowing that majority ownership isn't in GR anymore takes the luster off the shine but as long as they kick out good beer, they'll continue to succeed. There are lots of other places to get great beer in GR but I think for the average consumer, they'll still be just fine with rolling into the taproom to say they had a couple of beers at Founders. 

[discgrab21]

I think there is more to gain for Mahou keeping Founders healthy in GR than shifting production.  First, there is already the infrastructure in place to produce about 40% more beer right here in grand rapids, and I think that is without accounting for the purchase of Avery for west coast production and distribution.  Sure, some of the grown might come from acquisitions like Avery, but I would not expect a build out of a new production brewery in random city.  Michigan has embraced the craft beer industry, in large part because of Bells' and Founders' successes.  I also think it helps with branding.  Grand Rapids as Beer City USA is pretty well accepted by now.  Anybody who drinks craft beer knows that GR has a great beer scene, and they know that it is led by founders.  If Mahou (and Mike and Dave) are earnest about strengthening Founders' brand, it would be foolish to relinquish their throne as the flagship beer/brewer in Beer City USA.

When I meet out of towners for a beer, I kind of always say, "There are a ton of great places we can go, but Founders is the mecca" and there are so many great taproom exclusives and events (cellar raid anybody?), not to mention rotations of highly sought after beers like C/KBS that are available in "off season" times.

The other thing that GR has going for Founders is the fresh water supply.  In reading about other brewery expansions, particularly west, the most important ingredient in Beer is consistent and quality water supply.  Nothing better, more consistent, nor a more durable supply than water piped directly from Lake Michigan.

I would also add, that I am somewhat saddened that the ownership is no longer local.  I am glad that it isn't InBev or Miller-Coors.  But I do not really think this will have an adverse impact on the company.