Mike Stevens and Dave Engbers

Mike Stevens and Dave Engbers first met in college, became friends, enjoyed brewing at home and later decided to do more than talk about starting their own brewery. Three years after they opened the doors, however, their Founders Brewing Company was literally within a week of ceasing operations. “Brewed For Us” is not simply a catchy marketing phrase or a clever line on a mission statement. It was the survival strategy that saved Founders from being another flower memorial along the Craft Brewing Highway.

Mike and Dave recently took some time to give us more details about how they started, how they survived in the brewing business and why they are now thriving under a major expansion of their operations in Grand Rapids, Michigan.

(Editor’s note: This is part one of a two-part series. The second post will cover the early years of Mike and Dave’s friendship, favorite beers and flavors and thoughts about homebrewing.)

BC: What motivated you to start brewing?

Mike: Sierra Nevada Pale Ale is what got me motivated. I’ve always been a passionate guy, a tinkerer. I like to do things on my own. I like the unknown areas. It’s always been a fun challenge to see, ‘Hey, I wonder if I can do that sort of thing?’ It wasn’t big in my personal circle at the time but the idea of it really, really intrigued me. I had a trip to the Pacific Northwest early on where I tasted the Red Hooks and the Sierras and saw what was really going on in the early craft scene. It motivated me to see if I could do that. As crazy as this is in conservative West Michigan, there was a homebrew shop up in Rockford. I got Charlie Papazian’s book, read that cover to cover, bought all my supplies and made my first batch of shitty beer. I kept at it but really I don’t think turning that hobby into a career was so much motivated by my brilliance as a homebrewer. But it was enough to get me thinking about the next question, the next unknown: I wonder if I can start a brewery?

The bottom line is I think there is a fundamental difference between a true entrepreneur and someone who runs a company. There are less people who can be entrepreneurs. An entrepreneur looks for the unknown and embraces it while someone who runs a company professionally tries to minimize risk and the unknown. An entrepreneur excels in the unknown world. That’s where the greatest companies are formed. The Rockefellers, the Carnegies those guys gambled everything. The brilliance comes out of the unknown. Not too many people want to tackle that.

Dave: My brother was a homebrewer and he dabbled in winemaking and even mead. So I tried some of his homebrews and that led to my parents buying my first homebrew kit when I was 19 just a couple of years later. They saw I had an interest and they even pushed me a little into it.

BC: Your brewery history on the website tells the story of how you had to do an early course correction for the brewery by changing the lineup of beers you offered.

Mike: Basically what happened was we wrote our business plan in 1994 and quit our jobs and said this is what we are doing. By 1997 we opened up and sold our first case.

About three years into it we started running into bankruptcy problems. The landlord called and said ‘You’ve got a week then we’re going to put a chain on the door, unless of course you can make whole on a $200,000 commitment.’ The bank called our note and that was about $350,000 we owed there. I hadn’t paid Federal excise tax in a while so they started chasing. So if we are going down why don’t we start brewing beers we want to drink? I mean this shit’s not working we might as well go out punching. We miraculously fixed the financial problems and found investors in that week’s time.

My first 12 years all I did was hit the streets looking for investments, but we found some in that week where one ponied up to guarantee the loan and another couple bailed us out on the lease. So we restructured everything and reinvented Founders. We went away from the wheat beer, amber, and pale ale and we invented Dirty Bastard. In a conservative community where most of investors were 55, 60 or even older, they thought we were just idiots. ‘You have a name like that; you have a big, dark high gravity beer. Who the hell is going to drink that kind of thing?’ As soon as it came out all of a sudden we saw our sales immediately climb.

Quickly then we came out with the Curmudgeons and Devil Dancers and Breakfast Stouts. Over that 3 year period that’s when we became Founders; when we were on the forefront of what is considered the extreme beer movement. It became the hot thing and we were one of the half dozen pioneers. In a week we came up with a new path and a half million dollars. That’s why “Brewed For Us” means so much. I argue to this day that extreme beer catapulted craft beer forward and excited the consumers. They started scratching their heads saying ‘Holy cow! They have chocolate, coffee, raspberry and oatmeal in that beer. I’ve never heard of anything like that.’

Dave: I said. ‘We need to do something bigger and bolder but it can’t be too bitter. I think we should do a big malt bomb.’ I literally opened up the BJCP Guidelines and started looking at different styles and circled a handful that I thought would work. I said you know I think we should do a Scotch Ale it fits the bill. Fairly quickly we came up with a recipe. I think we tweaked it a couple of times. Once we hit with Dirty Bastard a couple of things happened. One, we didn’t use Founders Pale Ale, Founders Amber Ale, we used Dirty Bastard. It was a little sexier and the liquid was amazing. It was different and it was unique. It didn’t have a lot of competition out there. People didn’t necessarily know what a Scotch Ale was but they fell in love with it because it was a big, robust malt bomb and the fact that it had a name like Dirty Bastard didn’t hurt it.

Once we made that decision we started getting some attention fairly rapidly and one thing we did pretty quickly was to say alright from this day forward we are going to be a product driven company. We aren’t going to listen to our investors. We are making all these calls now. Everything we are going to do from this day forward is going to be bigger and bolder, more complex with bigger aromatics. Soon afterwards that’s when Breakfast Stout came out. Curmudgeon Old Ale came out. Devil Dancer came out. That’s when things finally started to get fun.

BC: Does All Day IPA follow a similar “Brewed For Us” development?

Mike: I look at the way we still go through product development today. I think All Day (IPA) is a perfect example. Throughout the U.S. it is the number one selling session ale by volume and there are some big players. Bigger breweries than us and we are outpacing their volume. Everyone is saying ‘Oh the session ale category is so hot and you’re on top of that’ but the reality is we didn’t make All Day IPA because the session ale category was the next hottest thing. We made All Day before the session ale category even existed. It was a beer we wanted in our portfolio.

We started the brewery in our twenties and now we are in our forties going to all these promos. We grew up drinking all these eight, 10 and 13 percent ABV beers. We can’t do that anymore at our age. Can we make something that is “Founders-esque” in style, flavor and aroma but yet be under 5 percent? Our whole goal was not to get into a category because as I said it didn’t exist.

Our idea was to make a beer for us. We never look to the marketplace to dictate our product development. We always look within. It took us four years to develop All Day until we were satisfied with the aroma, being well balanced on the malt side. We felt really good about it. It wasn’t too sweet, it had nice crispness to it and there were a lot of things we did to that recipe to make it suitable for our desires. By the time we came out with it and the name All Day the session ale category was suddenly becoming a big thing.

BC: When you approach brewing a new beer, are you more of a grounded brewer, where you start from a known place and process making changes from there or do you like to just start with a clean sheet of paper and let your imagination run wild?

Mike: There are some fundamentals I believe in and that are inherently found throughout Founders. I think you will certainly find it with Dave and also Jeremy our head brewer. We strongly believe in balance between hops and malts. I respect East Coast and West Coast. But certain regions accept more of what I would think of as out of balance than we do. If we are going to pack a lot of hops in there, we are going to pack a lot of malt to help it balance itself out. So I think balance in that regard is big for me and it lives here.

Once you get beyond that we do enter into let’s throw out all the rules and let’s start messing around. We don’t worry things beyond that. We like going to the extreme.

Dave: Our brewing team is dialed in. We made our mark with the higher gravity, bolder beers. We don’t really have a rule book here. When it comes to recipe development it is a very collaborative effort. Mike and I really talk to our team. It’s not a huge group and now we probably play devil’s advocate more. We give our brewer’s as much runway as they need. We talk about what will set that beer apart.

One thing I can say is we don’t look at trends. We don’t brew this because so and so brewed that.

BC: With all the recent changes in yeast and hops, do you think a brewer today can still have a favorite hop or yeast?

Mike: We are very consistent with our yeast. Niney-eight percent of all the beers at Founders come from one yeast strain. We do mess around with other yeasts but in reality we don’t dance around much there. As far as a favorite hop for me I think it just changes with time. We all might have started with Cascade, then shifted to Centennial, then moved on to Amarillo as time moved forward. It kind of goes around in a circle. For me I appreciate more the citrus and floral hop varieties with bright aromas.

Dave: As Mike said we pretty much use one yeast strain at Founders that we like. As far as hops go there are a lot of hop varieties we use however there are one or two that we like and tend to favor. We do so many things with barrels, fruits and adjuncts like coffee and chocolate that there are such a wide variety of beers we offer. We try to make sure the beer makes sense and the flavors complement each other. Adding things just to create novelty is not what we do. It hurts the industry when people don’t make good beer. Barrel-aged cherry custard wintery ale can be made but it doesn’t make any sense. At the end of the day we as brewers have to make great beer.

BC: For those readers who are contemplating taking that one giant step brewing beer commercially, what advice would you consider essential?

Mike: You can take this with a grain of salt and I don’t know if I mean this literally but I would advise you not to lead with an IPA. More to the point you need to be an individual and you need to do something different to stand out. It goes back to my lesson. What did I lead with? An amber ale and a pale ale like everybody else was brewing. Today IPAs are the hottest category. They aren’t going away but if you don’t brew something else that people will remember you by, you could end up where we did back then.

I would encourage you in the development of your business to try and take an angle that is going to put you on the shelf a little bit different than everybody else. It’s so much more competitive than it was 20 years ago. The other side of this is quality and consistency. The 1980s were in its rawest form and by the mid 1990s the industry was growing until it crashed then it picked up again. We were part of it with extreme beer. There were also crazy eclectic recipes and who can out do who kind of thing going on but now we’re kind of the old timers. I see it turning the other way and coming full circle. I’m not just saying this because of All Day but things come back to the fundamentals of beer making every so often. The industry is not going back to brewing shitty yellow fizzy beer but I think now what is in play for the consumer is they are looking for quality and consistency. Use the consumer but don’t over complicate things and confuse them. They will accept variation but they hate surprises. With so many options I explore with 20% of my beer purchases but 80% are the ones that have a demonstrated quality and that is the beer I am taking to the BBQ tonight. You don’t want to be in that 20% because if you stay there routinely that means you are either inconsistent or you are making crazy things too far out for the consumer.

Dave: I would have to say if you want to take that step from homebrewing to starting a brewery my first suggestion is start by working at a brewery. Understand what you are getting into and understand it will change every decision that you make in your life. When you own a business you go all in. You can’t half ass it. You have to be passionate about it and you can’t fake your way through it. Everything you do you have to think about how it affects your business.

When we started there weren’t that many breweries to gain experience at and the truth is neither Mike nor I ever worked at a brewery. We were both homebrewers. It took us 20 years to shake a lot of things out. I wish we both had worked at a brewery before we went all in. The other piece of advice is know why you are doing it. If you are getting into the beer business because you want to make a lot of money you are doing it for the wrong reason. You have to love making beer. You have to be passionate about it.

(Editor’s note: This is part one of a two-part series. The second post will cover the early years of Mike and Dave’s friendship, favorite beers and flavors and thoughts about homebrewing.)