Monday, May 7, 2012

Much Ado About Nothing

I'm a little confused at how I'm supposed to feel about the future of Bell's Brewery in Kalamazoo, Michigan. I've seen a number of snippets and mentions about the possible selling of Bell's, and recently I got an update on Facebook from Beer Advocate about it. The update was a link to an article titled "Bell's Brewery Inc. to be sold? Larry Bell says it's possible,written by John Liberty of It states that, as the the headline implies, the owner and majority shareholder (along with his two children) of the nation's thirteenth largest brewery might have to sell the business he's built over the last nearly 30 years, because of, well I'm not sure, and that's my point. Let me elaborate.

At first read, my initial thought was just "Wow, that sucks" then I started thinking about Bell's situation and I noticed a few . According to the article Bell's attempted a $52 million expansion project which kicked off last year. That project is now on hold as Bell tries to buyout his shareholders—He's been battling with them since 2007. Bell's Inc. has dropped a good bit of scratch to try and appease and or buy them out—with varying degrees of success or failure, depending on how you look at it. Larry Bell is quoted in the article as saying:
“Unfortunately with the growth and the size the company has gotten to, the alarms are going off to where we have to figure it out or do something else,” Bell said. “I don’t want to sell, but it’s a great time to sell if I had to. There are many willing buyers.
"If it was just a family business, there would be legal maneuvers we could make that would facilitate that kind of transfer across generations. With its current structure, I'm not able to do those sorts of things. It would basically leave us in the position of selling the company upon my death."
He states later:
“We, as a family, have to soon figure out what’s going to happen. Unfortunately, the way this thing is structured, this company is structured, it’s not sustainable. I’m not set up estate-wise to guarantee it can be handed over to the kids. We’ve been trying to work on that.”
So, what it seems like is, Bell is in a pissing match with his shareholders. That, along with the expansion and the cost of it's recent legal battles—including two trademark lawsuits and an dispute between Anchor Brewery over a former employee, above and beyond the shareholder lawsuit—have weighed heavily on the brewery. Somewhere along the line, Bell also seem to have forgotten his children, and has made no contingency plan for them—as far as his business goes. To that I put my hands up, raise my eyebrows and say "Well?"

Here's where my on-the-fence-ness comes from. The article, and a few others I read on the same topic, has a Save-the-Bell's feel to it— a sort of "C'mon people we have to do something to help this great brewery!" vibe. It doesn't come out and say it directly, but I note a slight skew in that direction. But in reality, what I'm seeing, is that a lot of this trouble seems to be self-inflicted. There doesn't seem to be any outside influences working against the company—no loss of market or new and stifling government-imposed restrictions, at least not anymore than any other brewery would have to deal with. It seems, from where I'm sitting, that Larry Bell just didn't make the best business decisions. None one forced him to sell shares in his company, no one forced an expansion and it's not the shareholders fault that he didn't set the company up to allow transfer of control to his children—not to mention the rather petty, but expensive lawsuits the brewery has gotten itself into over the last few years.

I know that Bell's has become one of those rarefied American craft-breweries, and, yeah, yeah I know Two-hearted is the end-all-be-all of American IPAs, but I think Larry Bell may have drank a little too much of his own Kool-Aid. I very much like Bell's beer, and I get that the brewery-biz can be dog-eat-dog, but the whole thing seems to be a bit of a non-issue. Make the right decisions and you win, make the wrong decisions and you lose. I think we all know that. Except maybe for the folks over at Bell's.

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