Audioburst Search

Axle Brewing Falls Prey To Daunting Craft Beer Economics, Plus 7 Things To Know

Automatic TRANSCRIPT

From the beautiful podcast traits, -tudios, welcome to a bonus edition of your daily Detroit recorded on Friday, June, seventh twenty nineteen I'm Jerry stays. And I'm spend Gustafsen, we're coming at you with bellies full of donuts and an update addition of your daily, Detroit so many donuts, there's a lot going on around town. Let's get right into it right after we pay. Some bills can I mentioned to Mabel, I side three daily Detroit is brought to you in part by repurpose that's where you can hire top talent in Detroit faster. Download their free startup salary report at repurpose dot CO. And of course, we'll have a Lincoln the show notes. Detroit may have a serial killer on the loose. Police chief James Craig said this week that police were looking for a possible serial killer after they've made a connection between a victim found any vacant home Wednesday with two earlier homicide victims found in abandoned homes. The victims have all been women. Craig says they were prostitutes. Police found the first victim March nineteenth and the second five days later both of those victims were identified and were said to be in their fifties. The newest victim found Wednesday has yet to be identified Greg. And mayor Mike Duggan say police have begun a massive search of abandoned buildings on Detroit's east side to look for more victims the plan is to send out officers and pairs with the abandoned homes boarded up once they're declared empty officials hope to have every vacant home on the east side, boarded up by the end of September anyone with information about the third victim or a possible suspect is asked to call Detroit police at three one three. Five nine six two six zero. We'll have that number in our show notes as well. Remember that story, we brought you of the twenty five thousand Leo tech street lights that are failing way ahead of schedule on the west side of the city while the public lighting authority is suing the company they've also gotten a replacement program under way more than one thousand streetlights have been replaced in the last couple of weeks. The P L A says there untracked replace all of the defective units by the end of the summer. A quick update on billionaire mortgage more goal and Detroit investor. Dan Gilbert, we're told he's resting comfortably recovering from a stroke suffered nearly two weeks ago. He's apparently asking for his favorite beverage when he didn't get it. He said the staff should review the practices in the statement attributed to Quicken Loans. CEO Jay Farner Farner, said that Gilbert's recovery will, quote take time. Would be retail and restaurant. Entrepreneurs should pay attention to this one. The hatch Detroit contest is back for another year. But this time they've double the prize. Now it's one hundred thousand dollars to help open your brick and mortar business in Detroit Hamtramck or Highland Park. All hatch Detroit's traits. Previous winners are open or looking for more funding. Why? Because the cost of opening a business in Detroit has risen since the contest started back in twenty twelve funded by Comerica Bank contest is taking applications now through July thirty first at hatch, Detroit dot com slash apply. Thanks to Milo, for their support of the daily, Detroit podcast Milo is a marketing agency that produces amazing experiences for audiences. They partner with their clients to drive, business and create innovative content. Do cool stuff with them at Milo dot agency. The Detroit department of transportation has discontinued a bus service designed to support eastern market, the fresh wagon ran on Saturdays and connected Detroit. Neighborhoods across the city directly to the market. It never really caught on the route that runs directly through eastern market. The Russell has infrequent service and does not operate on weekends the gresh and MAC buses also drop off near the market with gresh. It being much closer to the sheds. It also is a twenty four hour line. Grosse Pointe park is getting a new pizzeria this summer. The bricks will move into a space in that local downtown near the Detroit border construction is already underway, the bricks will serve wood-fired Neapolitan pizza with dope. Maidstone milled, ancient grains. They're also hiring for forty positions, including a sous chef pizza maker line and prep cooks and head bartender. Do you want more information? Email info at bricks pizzeria dot com. So today is national Donut day you might have been able to tell at the top of the show. We have a list of places. We like up on daily Detroit dot com. But I gotta tell you for me. It's all about the Dutch girl over near seven Woodward. I, I love me, some Dutch, girl, no doubt about it. I'm gonna go with apple fritter doughnut store in Ferndale on nine mile both U N Cheyenne love that place. The demean apple fritter. They've, they've got good product. I vouch. Well, you know, then I always love little bits of history and, and random things to, to share with folks. And did you know that national Donut day actually comes out of the great depression? I at assumed it was just a byproduct of the, the powerful doughnut lobby in Washington DC, or maybe another one of the public relations industries great creations. But actually, the Salvation Army over in Chicago celebrated the first national Donut day in nineteen thirty eight to help folks in need, and it was to commemorate the work of what were called. Donut lassie's which is a ridiculous name in twenty nineteen, but they actually helped don't serve donuts associations during World War, One, this is a ridiculous story. I'll you know me though, it's Friday, right? Let's get crazy. So this day across the country on the food trucks, the kitchens, all the things that Salvation Army serves they actually give free donuts away to people in need, because I believe everyone deserves donuts. Let them eat doughnuts, wasn't Marie Antoinette, the who so that. Actual brewing company, will close its liver annoy taproom in Ferndale at the end of this month. Just two years after it, first opened technically axel is hoping to sell to a strategic partner or buyer with more scale or resources, Akzo brewing. President, Dan Riley told the free that the company launched its brand twenty fifteen without a physical taproom, and without establishing product and engaging consumers difficulties in distribution, last summer's road, reconstruction on Libranoy in Ferndale. Also added obstacles, he added and I quote, we don't have the scale right now and the infrastructure and the cost structure to see a clear path to profitability in the near term, and quote, Riley said the business will continue to honor its distribution commitments including two Detroit city f c home matches. Joining us to talk about this is Dave Phillips beyond being a co founder of the IT in the podcast in one half of the podcast trait team. He also has experienced running a Br. Uri that no longer exists. In fact, you could say it fell down it did it fell down a win. Boom. It was. It was called falling. It was falling down beer company. Everybody knows or at least a lot of people know that was something that, Bob, and I dove into pretty hard Naby. And so all spiel there half of podcast. It's right nineteen the and I just remember he knows who he has. No. So I mean I, I gotta be honest with you. This is this doesn't surprise me, not necessarily excellent in particular. But I even when we were diving in with with falling down, and the more, we talked with other brewers, and the more we talked with other businesses, and that kind of stuff it was readily apparent to me that, that's the next bubble that's going to be popping. You know, we had the IT bubble we had the housing bubble. You know you had, you know, cars and all that stuff. And I think the brewery market has finally started to hit. It's saturating point you know here in Michigan. I mean, you know, you look back in, you know, twenty twelve and I came around if falling out around in twenty four twenty thirteen thing, but in two thousand twelve there were one hundred and thirty breweries arou-. And the state when batch I believe when they opened up a few years after falling down dead, there they were in the four hundred 's and, you know, you look at like, you know, the beer, maps, in the beer guides and all that stuff. And there's a there's a new one cropping up every week. And, and I do I mean, I think there's just a, they're a couple of symptomatic just flaws and issues in the industry right now, for example. So, you know, you look at do, I think a lot. I think a lot were breweries would be successful, if they were happy and comfortable being the neighborhood bar. You know, you look at like a dragon meet dragon Meade is phenomenal at what they do. And and how long they've been around fear aficionados love their beer. Well, yeah. And that's you know so that's the thing. I the quote that you read from the president, you know they, they did it. They launched with out engaging consumers without really tap it. Well, yeah. And will that you without really doing any testing of their product that's a hard thing to do? So, you know, a dragon dragging me didn't have a kitchen for. Ever and ever and ever I you know, you know, they, they were happy with you bringing in whatever you wanted, and they had to retake out menu in the area, but it wasn't until they really saw, you know, and, and I look at it, you know, kind of, like we've always grown, whether it's not our podcast, Detroit or anything else. We, we've steadfastly refused to push our way into things we wait until we get pulled. And there's enough of Opole that seriously worth taking a look at an evaluating and I think a lot of the brewers see, you know, the founders and the, you know, and everybody on the shelves at Meyer and, and everything else that's going on. And it's, it's a real rough road, a ho right now, speaking of those shelves, though, it seems like the choices are so many now that it's difficult for any particular brand to stand out over. Sure. I mean, so, you know, and that's you know that's why so much goes into label design, you know, at this, you know, you want the box design, and that kind of stuff and that's gonna yellow tail wine because I like the kangaroo, exactly. Because it's something that jumps out at and catch somebody's eye and you'll get. Hey, I'll give it a looking. I'll give it a try and see what happens, you know. And maybe they come back and buy more. And maybe you're just those one and done buyers. Don't people get also kind of tired with new beers? I feel like I've read in a lot of places where craft beer drinkers want something new like every week every two weeks. And don't really stick with a new stick with an old favourite. I, I have an opinion on that. I mean I, I love beer I love craft beers, but I'm starting to get I'm starting to feel like the craft industry is starting to jump the shark because I go to beer stores now. And I'm completely overwhelmed by the sheer volume of beers, and the the array. There are times now like this happens. I would say on the regular rag, oh, into either a bar or store and I have a hard time finding something that actually sounds good. Because it's like oh, you know today now we've got peanut butter and jelly pale. Like that sounds disgusting. I'm sorry. I have no desire to drink that, you know, I mean, for example, I'm just doing that. I haven't really seen that. But what you're seeing these wild and experimental flavors that, frankly, like. I want good beer like you don't need. I'm not I don't need to be bowled over with, like, you know, these crazy recipe concoctions, I want good beers. There are can name tons of like great beers that I've loved drinking over the years that I can't even find anymore because they've been crowded off the shelves, and with so much out there. It's hard to find the really good stuff from from, like, big name breweries to not only that, but you look at that's the issue you see in bars. We're like I've talked with distributors. And I've talked and other brewers neck. I mean, what you're seeing now is more and more brewers are starting to get away from dealing with the distributor and starting to push themselves through self distribution and one of the reasons why they're doing that is because you've got, you know, a lot of the bars will, hey yeah, we want whatever's new and cool and great. Okay. That's fine. But let's be real if you're trying to build a steady clientele, and this kind of gets back to that neighborhood bar. Motif, you're trying to build a steady clientele. You need a steady palette. You need a solid roster of beer that will. Always be there. No matter what even if you're gonna like, you know, hop cat could jillions of taps you walk in there one week. And you find a beer that you love you walk in there, the next week, and it's probably not there. Yeah. Well, and to me, what's surprising about all of this axle is a beautiful facility. I mean you walk in there is it a gorgeous? They did a wonderful job with that place from the tile to the outdoors everything. But also, it it's interesting because it's so big, but it's like a neighborhood bar spot, right destination. Like walkable from your house. Right. It's right. And it's a destination building in a very much neighborhood pub in setting. Well, and so, I mean, and you look at it that, that may well have been part of their I mean, I don't know the specifics. But that may well have been part of their issue is, you know, you look at, you know the as. The beauty, what of the great things of the area starting to come back is all the prices are starting to go up, you know, whether that's, you know, retail pricing or construction pricing. Now going for five thousand dollars a month in Ferndale. Absolutely. So, you know, you know, that is so, yeah, it was a beautiful great build out what did it cost him? You know, and that's and that's billion two million in something that's one of the things that we always talked about, whatever we were trying to think, like, when we were doing the whole falling down thing like okay, what how many beers does that cost, like, don't even don't even talk to me in dollars talked me, and how many beers do we have to sell to make that a viable option? And then tell me whether or not it's realistic, like okay like, you know, you're doing, you know, we're going to, you know, if you're going to redo the kitchen and that's fifteen thousand beers. How long does it take us to sell fifteen thousand beers? And what does that really mean? And is that is there a path to profitability there? And even with that awareness, things don't always work out of the way you want him to. Yup. Putting out there that we're talking about this in this situation. And that, that's the things when you've got such a competitive market, you have to have products that stand out on its cut-throat it adds. It is, and it's and it's weird because it's cutthroat but it's not, you know, I wanna I don't wanna give the wrong impression like there is not a single brewer that I've ever met, whether it was, you know, through the Warren brew fest off or just, you know, hanging out yak, and with people, you know, once we had bought in, and, you know, we were they knew we were around and doing stuff. It is such an open friendly welcoming community. And but it's one of those things where like they almost don't know it's, it's like looking at NFL owners like NFL owners all sat around and complain about player salaries rising, but none of them stop themselves from paying this players, more, Sal higher salaries. So you've got all the stuff going on in the brew industry. Now where you know, it's harder to get distribution. So people are slashing prices, and they're doing this, and they're cutting this out, and they're cutting that down, and nobody stopping themselves from doing it because. The margins tend to be. Super thin, you know, especially if you talk about a place. Now, the dragon meet has food, and like, you know, you look, once you had a restaurant into the mix for a brief brewery, there's pretty decent profit on beer. Like just you know as as long as you're talking about what you sell in your taproom on draft. There's a pretty decent profit on the head not not distribution Ono, once, once it goes into kegs and goes out of your. Yeah. Would the price point that you sell it for to get it out? The door is ridiculously low. And, and that's the thing you know, is that, you know, the Amazon model of, hey, we're gonna make petty product but will make it up on volume again. How many beers does that cost, you know, for you to actually make that a viable thing? So I mean it it's it is it is a bummer. I mean 'cause yeah I mean actual was a great build out and, and it looked phenomenal. And hopefully they because they've been there that you are seeing more and not more and more. But you are seeing mergers happening a lot lately where, you know, they're even like what is it dot fish and Adams? Yep. Ten and right, brain just over. Somebody else with Roque. Yup. Yup. I yeah. Yeah. And founders, you know is part owned by Spanish conglomerate, I think you're seeing a lot of that, where like, don't like growth is great and growth is good. But I'm gonna keep coming back to the one of the first points. I made which is, I think a lot more of these breweries would have enough success. You know, if they were to focus on being that, you know, the neighborhood brewery, there isn't gonna isn't that more of a lifestyle business than say of business that you get a bunch of investors for absolutely? And but, but it's people don't like to cover those or get into those because they're like, well, do I really want to just by job? You know, again, I, I look at an out, you know, use falling down as an example, what, what falling down did in Warren was great. You know, there were, you know, there was, you know, there were decent margins there, and everything was everything was rolling along good among other things. But one of the primary reasons why that fell down was the expansion of an Oxford. You know, it wasn't you know, it was one of those things where okay it's, it's not enough to just have. What's going on in Warren go, you know, going, well, let's try to get more. And we stepped in after those decisions were already made. And in. In fact, we kind of basically came in with the, the, the tech Accardi the gave it the, the lifesaving shock to the chest for a while. But I mean it's and that's the thing you know, you, do you see these places that are expanding outside of their home, demographic and outside of their home region. Where they do they build a following, you know, and there are, there are other Burris that I know that are doing this, that do really, really, well where they are in the O now, wanna tackle, Royal Oak all, Nauman attack, Detroit, because they kind of have that false sense of security of while I'm doing so, well, where I am right now, of course, if I open up another location, it's going to be just as great what could go wrong. Yeah. You know, forgetting all of the time because again, you know, if you're. At, you know, if you're up in Sterling Heights, around, you know, twenty four mile you know, and, and you're like in a, you know, in a place with a lot of neighborhoods in that kind of stuff, and you're the only one in the area if I'm opening a bar in Sterling Heights. I'm calling Goldens. GB's. GB's GB. You know, you know. But then, that's, that's a whole different animal when you talk about. Yeah. I'm gonna bring something down into Cass corridor. Yeah. I'm going to bring something into mid town or. Yeah, I wanna dive in with one of these new hotels that are opening. That's a whole different ballgame. And I and I don't think people really understand or appreciate fully enough, where the downsides Phillips, thank you so much for stopping by. Always a pleasure, man. Hop on. And we're done for today. Little programming note will have a conversation tomorrow in your podcast feed for your ear holes about the city of park with city manager, Eric ton gate. So look for that. I'm spend Gustafsen. Thanks so much for listening. And I'm Jerry stays take care of each other, and we'll see you around a Troy. You're listening to the podcast, Detroit. Headwork visit WWW dot podcast. Detroit dot com. For more information.

Coming up next