Rene and Matt Greff are happy people, and not just because they own a pair of breweries. The Ypsilanti couple miraculously balances their laid back personalities with the frenetic enthusiasm of running two successful businesses --
Arbor Brewing Company and the
Corner Brewery.
The two are often described with right brain-centric cliches: Extroverted. Fearless. Intuitive. Open-minded. Creative. They're terms the Kalamazoo College graduates use to describe each other as they claim ownership of the same gung-ho personality.
"The downside is there is no governor in our relationship," Rene says. "If one of us comes up with a hare-brained idea, the other one doesn't go, 'Ehhh... I don't think that's such a great idea.' The other person always goes, 'Dude, that is the best idea!'"
For the Greffs the mantra seems to be: the more out-of-the-box the idea the better. Opening a brewpub with zero restaurant experience resulted in the ever-popular Arbor Brewing Company. Opening another in a long vacant building in a city most Ann Arborites hesitate to visit produced the similarly successful Corner Brewery in Ypsilanti. When the duo replaced a parking space in front of their business with a huge bike rack they started a downtown trend. When they backed a moderate Republican for governor (despite their self-avowed left leanings) they made a friend in Lansing. Unconventional choices constitute the Greff's recipe for success. And those choices continue with plans to open a microbrewery in India, of all places.
Concentrate's Jon Zemke sat down with the couple to talk beer, business, and even downtown development.
Ann Arbor is the hot spot for craft brewing. Could mircobreweries become a significant economic engine?
RENE (pause): It is a growth industry in Michigan. Definitely in Washtenaw County. We are poised to take advantage of that in Ann Arbor and Ypsilanti more than any other place.
MATT: It's another feather in Washtenaw County's cap. Ann Arbor in particular. It just continues to add to the perception of this area, and why you would want to spend time here.
Craft brewing makes up about 5 percent of beer consumption today nationally. How big do you see that number becoming? MATT: The Pacific Northwest has substantially higher numbers (Oregon is estimated to be as high as 18 percent) and Michigan is still under 2 percent. Those numbers will continue to grow. The sales for the big breweries are flat. They're all scrambling now to get as many microbreweries into their portfolio as possible.
RENE: The first couple of years, the distributors that we share with the big [breweries] didn't show us a lot of love. That has changed in the last year and a half, because they realize this is the growth segment and investing some time into our brand makes sense.
MATT: The
Michigan Brewers Guild set a goal of getting to 5 percent of sales within the next five years. I would love to see the national average get to double digits in the next five years.
I'm surprised the numbers are so low.MATT (laughs): It's amazing. There are more than 80 microbreweries in Michigan and they only account for 1.5 percent of sales.
I've heard brewers say macrobrew domination is an aberration created by Prohibition, and we are trending back toward regional beers and neighborhood breweries. Do you agree? RENE: The stage was set with prohibition. The truth is we are a mass-produced society where a vast majority of people consume mass-produced crap. If it were just Prohibition it would have reversed itself by now. Craft beer has been on the scene 30 years.
MATT: Prohibition accelerated the shrinking of the industry.
RENE: You'll see our bigger breweries like
Bell's and
New Belgium become of interest to the bigs when they reach a point where they are of financial interest.
MATT:
Anheuser-Busch is already experimenting with it. They failed in their experiment with
Red Hook. They have a controlling stake in
Goose Island now, but they are letting the people who started it keep running it. It's going to be interesting to see what happens in the next 5-10 years.
Will we reach a point where the market share of the likes of Budweiser, Miller and Coors go the way of the Big Three's market share? RENE: It won't happen in our lifetime.
MATT: The reason it won't is because of the distribution system in this country. That's where the wholesalers make their money and they make a lot.
It would seem if there is a higher profit margin with microbreweries then it would make more sense for the distributors to flip the percentages. RENE: You're not going to get more than 15 percent of the population that is going to drink good beer. There is just a smaller segment of the population that drinks good wine, good beer or good coffee.
You guys know what flavors you like, but how do you know it will work for your customers? RENE: Our philosophy from day one is we will create the place that we like and hope other people will come, too. We're freaks. The small, weird segment of America. If we tried to figure out what everyone else likes we would fail every time.
MATT: More importantly, we're extremely in touch with our staff. They're the ones on the front lines. But for the most part it's, "We think that's a great idea. Let's try it."
It seems like fly-by-the-seat-of-your-pants management. Is that a good idea for a small business? RENE: There are very few irreversible decisions, so we don't labor over them much. If you're too invested in your idea to change, that's more dangerous.
MATT: You can say “flying by the seat of your pants” and I would say “being open to new ideas, being flexible and willing to change on a dime.”
What advice do you have for those who want to open their own brewpub?RENE: Work in one.
MATT: And work every single position in the whole place. Figure it out from top to bottom.
Figure out what your start-up and operating costs are going to be and double that.
RENE: Figure out what your revenues are going to be and halve them. Also, never forget that a
brewpub is a restaurant and those have a 90 percent failure rate within the first two years.
Arbor Brewing and Corner Brewery have become local destinations, establishing the kind of third place new urbanists wax poetic about. In fact most brewpubs are one-off establishments. How do you translate Arbor Brewing's success into a franchise in India? RENE: We're going to franchise the management philosophy and do the rest locally. There needs to be an engaged owner who is part of the community.
MATT:
McMenamins brewpubs in Oregon has eight locations and they're all completely different, even though they're all called McMenamins. I can see that happening to a certain extent in India. Not quite one-offs, but definitely not a cookie-cutter chain concept.
How would you reform Michigan's liquor laws? (Their eyes widen with excitement)
RENE: Get rid of the three-tier system.
MATT: Everybody should have right to self-distribute so you could build a customer base and shop around for different wholesalers. I would like to sign a one-year contract with a wholesaler and say, 'If you impress me, great. If not, there are three other wholesalers over there.'
Is there any hope of that sort of reform in the near future? RENE: No.
MATT: The new governor is definitely a free-market guy and 80 percent of the legislators starting this session are freshmen. The distributors keep their grip on the three-tier system because they are the most well-heeled lobby in Lansing, so we have 80 percent of the legislators who aren't under the influence, no pun intended, of the alcohol lobby. In all honesty, it's not going to happen. But if it were, now would be the time.
Rene, you are a former-and-outspoken member of Ann Arbor's DDA. What is your opinion of the city's plan to turn over development of city land in the downtown to the DDA?RENE: It's about time. It's brilliant.
Many downtown development plans in Michigan revolve around redeveloping existing building stock. Ann Arbor, and to some extent Ypsilanti, have already done that. What's the next step? RENE: Building on undeveloped parcels. That's a clear win-win because you're providing infill and putting properties back on the tax rolls.
So it's more about infill than maximizing energy efficiency or finding opportunities for mixed-use? RENE: That's where you'll get the most bang for your buck. Those others are pieces of the puzzle. Our DDA has been good about not just focusing on building buildings, but looking at other opportunities like the
green energy grants.
Replacing surface parking lots with new construction is a place we have reached in Ann Arbor but not yet with Ypsilanti.
You're both active Democrats, and this last election cycle didn't go well for your party. Gov.Snyder is seen as a moderate and from Ann Arbor to boot, but Republicans control the rest ofstate government. What's your outlook on the near future of the state?(Rene gives out a heavy sigh)
MATT: To be determined. It's no secret we supported Rick Snyder in his run. In our dream world you would have a moderate Republican with at least one of the chambers controlled by Democrats, allowing him to truly govern from the middle.
RENE: Will he have the fortitude to veto crazy things?
MATT: We'll see who is really running the show this year in terms of the Republican Party.
So what gives you hope then?MATT: That Rick is governor gives me hope. He is that rare person who understands the importance of the public and private sector simultaneously.
RENE: When was the last time a Republican ran on the commitment to strengthen Detroit? There are a lot of things that a lot of Republicans don't get that he gets, like the importance of the arts and strong urban centers.
Ypsilanti is enjoying a bit of a Bohemian Renaissance, and yet some people still avoid it. How do you get outsiders over their geographic prejudices? Do you want to? RENE: Yes, you want to. You do it one business at a time. I am surprised how many times I see people from Ann Arbor having lunch at
Beezy's. But I am not worried about the suburban hordes swarming into Ypsi and changing its character. It's not the people who shop in your community that define the character. It's people who live there and who own the businesses.
What causes a place to lose its character is its rent structure. The reason Ann Arbor sort of lost its Bohemian vibe is because rents became so high. It's hard to open up a business here and make it work.
So, were you visited by Santa or the Krampus this year? MATT: Definitely Santa. We had a great 2010 and 2011 is going to be magnificent.
Jon Zemke is the News Editor for Concentrate and its sister publication Metromode. He is also the Managing Editor of SEMichiganStartup.com. He conducted and condensed this interview. His last feature was More Than Just Good Timing: A Q&A with Ben Kazez .Send your comments/feedback here.All photos by Doug CoombePhotos:
Matt and Rene at the bar at Arbor Brewing Company
Rene at the interview with Jon Zemke
Matt at the interview with Jon Zemke
Matt and Rene behind the bar with customers steins at Corner Brewery
Matt and Rene in Arbor Brewing Company's game room
Where the magic happens part 1 - The brewery at Corner Brewery
Where the magic happens part 2 - The brewery at Arbor Brewing Company
Corner Brewery