After nearly two decades of brewing German-style lagers and boutique ales from its headquarters in Detroit's Rivertown district, Atwater Brewery is on a path of fast-paced growth into new territory.
When owner Mark Rieth was approached by developers about opening a tap house in Grosse Pointe Park, his instinct was to say no—he was busy concentrating on production. He had even closed Atwater's restaurant adjacent to the Detroit brewery a few years earlier. But the Grosse Point Park project offered a unique opportunity that he couldn't resist to redevelop a 1936 church building into a beer garden and gastropub.
"It’s been a tremendous success,” he said. "It's a very cool spot. That kind of put the impetus to me to take a look at future development opportunities for beer garden and tap house projects."
Atwater in the Park opened in 2014. In the two years since, the brewery has completed a massive renovation to its Detroit facility that tripled the size of its brewing equipment and opened a 5,000-square-foot beer garden and tap house adjacent to the brewery.
This fall it has opened a third tap house in the former Rowe Hotel Grand Rapids. The 94-year-old hotel was redeveloped into apartments and condos with the brewery on the ground floor. Atwater invested $15 million in Detroit and Grand Rapids, with the bulk of the money going toward the Rivertown location.
A production facility and tap house are also slated to open in Austin, Texas, in March, and Rieth plans to open another full-scale brewery and tap house in the southeastern U.S. in 2018-2019, potentially in one of the Carolinas or Virginia. He hopes to open biergarten/tap houses in Chicago and Boston in 2018. Like Grosse Pointe Park and Grand Rapids, the Chicago and Boston locations will brew small amounts of beer while relying on Detroit-brewed products as well. The Texas and southeastern U.S. locations will have larger brewery operations.
As the brewery’s sole owner—he purchased the company in 2005—Rieth opted to grow organically and take on some bank debt instead of diluting his interest through private equity.
"With the growth in the craft beer industry over the last seven or eight years, we’ve been planning this for quite a while,” he said.
Rieth shared some words of wisdom for other businesses looking to take it to the next level.
Create your own road map
Entrepreneurs need to ask themselves where they want to be in five years and 10 years, Rieth said. It's also important to ensure the company has enough funds and contingencies in place to deal with unexpected hurdles.
"If you don't start day one with a road map and a plan, it's never going to work,” he said. “It might work for a while, but you won’t have sustained growth."
Rieth's vision for Atwater is to build the company into a national and international brand. With the ramped-up brewing facility in Detroit along with expansion breweries, he hopes to nearly triple his beer production to between 100,000 and 125,000 barrels by 2020. He's also looking to export about a fifth of Atwater's beer by then.
In mid-2017, Rieth will start considering and discussing more opportunities to set up new locations, potentially even outside the United States.
Stay true to your roots
Atwater's slogan is "Born in Detroit, raised everywhere."
"Everything we do, everywhere we go, we bring Detroit everywhere … we bring our history,” Rieth said, noting that his tap houses feature tables made of wood reclaimed from Detroit houses.
Rieth is picky when it comes to expansion projects. The locations must offer a repurposed facility with an outdoor space. He says it’s important for the company’s identity. Atwater's original location is housed in a 1919 renovated automotive parts warehouse. The Grosse Pointe Park tap house is in an old church, the Grand Rapids location in a historic hotel, and the Austin brewery will be in a former floor tile plant.
"You have to stay true to your roots and that's what we’re going to do," Rieth said. "We're doing it creatively, moving farther away from home, but at the end of the day it's all about your local market."
Understand your opportunity markets
Rieth has specific reasons for pinpointing each new location. For example, he used to live in Boston and wants to take advantage of its loyal beer market. Putting a shingle out there will mean a lot to local consumers, he said. Chicago's proximity to Detroit made it an attractive expansion spot. He's had some challenges in the past with changing distributors in the Chicago market and he hopes setting up shop will be a way to let Chicagoans know about Atwater’s products.
In Austin, the full-scale brewing facility and tap house will allow Atwater to not only deliver fresher beer more quickly and at a lower cost to Texas consumers, but it plans to create beers strictly for that market. Rieth said he hopes to have his products in the Texas beer section of grocery chains to tap into the loyalty for local businesses.
Rieth said it’s also important to consider things like lease rates, opportunities to buy and renovate buildings, and whether there are local incentive dollars available.
Plan ahead for inevitable delays
"Timing is the key,” Rieth said. "You always (need to) put contingencies in for delays in construction and permitting for all those kinds of things."
That’s a lesson Rieth said he learned from the Grand Rapids project, which at one point was scheduled to be complete as early as this past spring.
With future projects, he said he’ll plan for an extra six months to make sure it’s finished on time.
Pace your growth
Each time Rieth opens a new location he’ll send a team from Detroit to help get it off the ground, and some will stay on at the new spot. Atwater’s head brewer will commission all new locations and hire local staff as well.
That’s why he wants to make sure he has one new facility up and running with all of the key people instead of opening multiple projects at the same time. He also thought it was best to launch the Grand Rapids location first before moving out of state.
Rieth encourages a patient approach to expansion. In both Grosse Pointe Park and Grand Rapids, he decided to move forward after he was approached with proposals to open in those particular facilities.
"Those organic ones are always the more successful ones than trying to force the market," he said. "So we'll take as long as we'll need, and that’s definitely what we’re doing in Chicago and Boston. We're really waiting for that perfect opportunity."
Melissa Anders is a Brussels-based freelance journalist and metro Detroit native.SaveSaveSaveSaveSaveSaveSaveSaveSaveSave