Traverse City Record-Eagle

the BIZ

March 5, 2014

Brewery boom 'capitalism at its best'

TRAVERSE CITY — Northern Michigan’s flood of brewer-entrepreneurs is prompting some business experts to wonder when the next batch of beer is just too much suds.

“You only know the market is saturated after it’s too late, when they start to fail,” said Doug Luciani, president and chief executive officer at the Traverse City Area Chamber of Commerce. “I don’t think we are at the saturation point yet, but for craft breweries in and around Traverse City, we are probably pretty close.”

Jim Schrager, a professor of entrepreneurship and strategy at the University of Chicago’s Booth School of Business, said the influx of breweries is “capitalism at its best.” He compared the rapid-fire openings in northern Michigan to a mini-version of the entrepreneurial spirit witnessed in the American economy when cars and computers were invented and product demand boomed.

“The very best ones remain in business,” Schrager said. “The ones who didn’t quite do it right learn a little more but don’t survive. It’s survival of the fittest.”

Several new breweries are products of young entrepreneurs like Nate Crane, 31, and Tina Schuett, 28, who are preparing to launch Rare Bird Brewpub at 229 Lake Ave. this spring. Schrager said a key to helping young entrepreneurs like Crane and Schuett succeed is to reduce regulations that impede business owners.

“It all has to do with lowering regulation, lowering red tape, and making it easier to start businesses with minimal interference,” Schrager said. “Make it easy to file a business name and get your business license and face minimal taxes. We can look all around the country at areas which are booming and which are in trouble. The places with the least amount of regulation do the best.”

Charlie Kinzel is a co-owner of Brewery Terra Firma at 2959 Hartman Road in Traverse City. Kinzel said he’s confident there’s room for the breweries in the region and perhaps more, and noted there’s a historical reference to support his belief.

“It’s going well; we are growing steadily,” Kinzel said. “The numbers we have just now reached are the same numbers of breweries we had at the onset of prohibition. We’ve had this many in the past, and now we have a larger population and a larger population interested in local, quality, craft beers. We are providing a product to a market that’s asking for it.”



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