LANSING — Northern Michigan breweries say they’re dealing with difficult economic headwinds as some consumers show more caution with spending this summer.
Larger operations say they’re also dealing with tariffs on aluminum and higher costs for ingredients, along with an uncertain environment for business investment.
“I’m optimistic for the future, but we’re in a period of challenges, and for some it’s really a period of trying to survive right now,” said Scott Graham, director of the Michigan Brewers Guild. “I would say recent history is the most challenging time in many years for local breweries.”
Graham says that the industry is generally down from its pre-pandemic peak.
“You’ve got people whose habits have changed,” he said. “They’re not going out and eating and drinking the same as they used to. Costs are up — everything from labor to raw materials went up.”
Rick Schmitt, co-owner of Stormcloud Brewing in Frankfort, says that his business and others are seeing the impact of the difficult environment.
“All of us in in our industry are working hard every day to make sure we got a great product and and provide it to the customers as we can — but certainly it is a challenge in the craft beer industry,” he said.
Smaller operations say they’re mostly dealing with trends that were in place before President Trump’s tariff policies — pandemic-related business issues, increasing operating costs and a decrease in alcohol interest from younger adults.
”I can’t say these tariffs have really affected us a whole heck of a lot,” said Mike Castiglione, operating owner of Stiggs Brewery in Boyne City. “If we were doing some distribution outside the state of Michigan, that probably be a different story. Other than can prices going up a little bit — I think that’s the only thing that’s really affected us when it comes to, comes to tariffs.”
Larger outfits like Short’s Brewing say that they’re feeling the impact of some policies directly, including on the price of aluminum.
“We use a lot of aluminum cans, and they are made in the US,” said Scott Newman-Bale, CEO of Short’s Brewing in Bellaire. “But even then, the raw aluminum does come from abroad, and that pricing has gone up pretty dramatically, and it is a noticeable impact on us.”
Tariffs on aluminum have reached 50% for most countries, and Short’s says they produce the equivalent of nearly 15 million cans of beer annually.
Brewers of all sizes shared concerns that an economic downturn could impact them significantly, given tight margins and the potential for new charges on inputs like barley.
“When I look back 30 years, it was hard to imagine the beer scene, local beer scene, looking like it does today,” Graham said. “When I look forward 25 or 30 years, I have a real hard time imagining — but i’m sure it’s going to be here, and I’m sure that there’s going to be growth, even though we’re not seeing it right now.”