Bell’s $7 Million Investment to Improve Innovation

Michigan’s Bell’s Brewery last week said it would spend $7 million on capital improvement projects at its brewing facilities, located in Comstock and Kalamazoo.

Bell’s, the seventh-largest U.S. craft brewery (as defined by trade group the Brewers Association) said the projects will focus on “quality, sustainability and beer production” and will take about 18 months to complete.

The decision to invest $7 million comes about 10 months after Bell’s completed a $50 million expansion project at its 200,000 sq. ft. Comstock facility. That project gave the company the ability to scale its annual production capacity to 1 million barrels. It also included the addition of a new bottling line and the construction of a warehouse logistics center as well as new office spaces.

The latest investment, aimed at sharpening Bell’s focus on innovation, will include the addition of a 20-barrel pilot system at Bell’s Comstock production brewery and a 3-barrel pilot system at its original brewery in downtown Kalamazoo, founder Larry Bell told Brewbound.

The new 20-barrel brewhouse will feature the same technology as the company’s primary 200-barrel brewhouse, he said, which will allow brewers to more easily scale up recipes as well as produce a wider array of specialty offerings.

To accommodate the production of those beers, Bell’s also plans to add a bottling line designed to fill speciality packages and “odd-sized bottles.”

“That gives us some flexibility for doing some smaller-run stuff and off-the-wall-type products,” Bell said.

The new 3-barrel system in Kalamazoo, meanwhile, will replace an existing 15-barrel brewhouse, a move that gives Bell’s innovation brewers the ability to brew test batches with experimental hops. The 15-barrel system will be recommissioned and used for various sour ale projects, Bell added.

“It’s really old, and it’s difficult to produce items on that are scalable,” Bell said of the original brewhouse.

Bell said his company is also constructing a new yeast propagation facility in Comstock after “outgrowing” its existing one. The upgrades will aid Bell’s commitment to sustainability by reclaiming low pH yeast, which will be sold to local farmers for animal feed.

“When you’re making so many dry-hopped beers, the question becomes where yeast comes from then?” Bell said. “It’s not a problem when everyone’s drinking Amber Ale and Oberon. But everyone seems to like IPAs these days. It puts constraints on us.”

The upgrades in Comstock will also include additional office space as well as a new employee gym, Bell said.

Once completed, Bell said he anticipates hiring 10 to 12 new full-time employees between both brewing facilities.

Earlier this year, Bell’s added significant territory to its distribution footprint with an expansion into Texas. The company also plans to enter its 32nd state, New Mexico, in September.

“Texas was a really big market,” Bell said, and expanding there gives his brewery access to many former Michiganders who have fled to the Lone Star State.

“As that [the Texas expansion] settles down, New Mexico gives us that connection all the way out to Southern California,” Bell added. “So that route will be done.”

Bell doesn’t anticipate adding new territory this year, although he believes New England will be the next area where his company will attempt to establish a presence.

“We need to look there,” he said. “There’s some territory in Connecticut that we feel good about. Massachusetts is full of big markets. There are big breweries that have gone to Vermont and died. Maine is the same way.

“We’ve had preliminary talks with people out there,” he added. “Do I expect those markets to light us up on fire? Not necessarily.”

Bell’s will also look at adding territory in the Pacific Northwest and the Mountain West, although Bell said filling out a U.S. map isn’t among his company’s priorities.

“We just don’t have a manifest destiny mindset to do it as quickly as we can,” he said. “We work a little more methodically.”

Sales grew 14 percent last year as the brewery sold more than 421,000 barrels of beer, according to the Brewers Association. Bell added that sales of his company’s beers were up 10 percent through the first six months of 2017.

“Given the current environment, I’m really happy with that,” Bell said.