MICHIGAN BREWERS GUILD, INC. ANNUAL REPORT FOR 2013 January 8, 2014

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1 MICHIGAN BREWERS GUILD, INC. ANNUAL REPORT FOR 2013 January 8, 2014 Mission Statement The MBG exists to unify the community of brewers to increase the sale of MI craft beer, to contribute culturally and economically throughout the state, and to monitor and assure a healthy brewing industry. By working collaboratively with proponents of craft beer we strive to achieve a 10% share of all beer sold in Michigan by producing world-class events, increasing public awareness, educating consumers, and encouraging responsible consumption.

2 Michigan Brewers Guild President's Report January 8, 2014 Fellow Michigan Brewers Guild Members, As we were reviewing the past year in preparation for this Annual Meeting, the New Year greeted us with the news of a fire at Fifth Third Ballpark, the home of our upcoming Winter Beer Festival. We endured hundreds of phone calls, s, text messages, and Facebook comments from concerned individuals, despite the fact that it was too soon to know any details. We are happy to report that nobody was injured in the fire, and the Ballpark has assured us that they will be able to host our Festival as planned was the first full year that we had Shannon on staff, which has allowed us to accomplish so much more than we were before. But it has also made us realize just how many basic functions that weren't getting done that should be by a company like ours. We aren't the struggling Brewers Guild that we once were...we are a legitimate business, and I plan to have us operate like one. The Board decided that it was finally time to protect the "brand" that we have built over the past 16 years, so we have engaged with legal counsel to obtain trademark protection for several versions of the Great Beer State logo, the Great Beer State phrase, and other event-specific logos. We hope to have this completed in the coming year. We have made a very conscious effort to be involved on a national level by having a presence at the GABF and the Hill Climb in Washington D.C. We also had representation at 4 regional Guild Meetings scheduled during events throughout the year. There is an enormous value to our Board and Staff to hear what other Guilds are dealing with in their respective states, as well as being able to provide helpful information to other Guilds about our own experiences in Michigan. Financially speaking, our Guild is in great standing. Our increased revenue is funded by continued growth in both Membership and Festival attendance. This growth has allowed us to surpass a revenue milestone, making the Michigan Brewers Guild a $1,000,000 company. While the majority of this revenue is dedicated to marketing, government affairs, and daily operations, we have also started an "emergency" fund, as an insurance policy to be used if something catastrophic affects any of our revenue sources. Please keep in mind that the single biggest expense in the Guild's operating budget is purchasing Michigan beer for our 4 Festivals...exceeding $400,000 in This year we experienced growth at all levels of Guild Membership. Our brewery membership grew from 97 at last year's Annual Meeting, to 119 as of today. There seems to be a new brewery opening every week! We have implemented procedures to sell, and effectively manage, our Allied Trade program which has lead to several new supporters. The Enthusiast Membership continues to grow from year to year as well, with total membership exceeding While it is still being tweaked,

3 we successfully created a Festival ticket pre-sale program for Enthusiasts, adding significant value to those concerned about getting a ticket to any of our events. Speaking of events, each of our Beer Festivals reached sell-out status in with total attendance exceeding 28,000 fans of Michigan craft beer. Most recently we were able to sell all available tickets to the Winter Festival in less than 3 hours. With the number of people attempting to buy tickets nearly 3 times the number of tickets available, this is an event with extremely high demand. One of our challenges for 2014 is determining whether or not upgrading the Winter Festival to a 2-day event makes sense. There are a lot of variables to consider. As many of you may have noticed throughout the summer, a Michigan Beer billboard campaign finally became a reality! This has long been discussed by our brewery members as a project of interest, but financially it never made sense. It became an affordable possibility thanks to funding by a grant program. It was exciting to see my first billboard boasting "Drink Michigan Beer" as I drove west on I one of twenty-two such billboards scattered across the state. While this was a unique opportunity that presented itself, we are always exploring new ways to spend our marketing dollars, as well as evaluating all of our existing efforts. As 2014 begins, we will be adding 2 new positions to the Board of Directors, filling 4 seats in total. We expect that this expanded Board will provide more viewpoints from a bigger cross-section of our membership, and we hope that this new Board will effectively work with our staff to achieve the following goals: Continue to evaluate the staff requirements necessary to operate our organization efficiently Develop a multi-year strategic plan to manage growth and build market share for Michigan beer Support current craft beer reform legislation, hoping for passage into law Publish updated Economic Impact data from 2013 Provide improved communication to membership regarding Government Affairs issues Establish the Michigan Brewers Guild as the premier Guild in the country Thank you to all of you for your continued participation in our events. This organization only exists because of you. We look forward to another successful year, for the Brewers Guild as well as for all of our member breweries. Cheers, Eric W. Briggeman President

4 Michigan Brewers Guild 2013 Government Affairs Summary Annual Legislative Day: Many productive office meetings reinforcing our industry with legislators and offering an informative and comfortable setting to learn (a new experience for several members) Well attended legislative reception featuring tasty edibles and a broad representation of MI craft beer 40+ people in attendance representing 30+ breweries 2014 Legislative Day will be mid late May and we would like to encourage everyone to attend Washington D.C. Hill Climb and Visits Good member & Guild representation during the BA Hill Climb Other office visits were done by Scott Newman-Bale & Scott Graham, including sponsorship of the MLBA annual D.C. legislative reception We have continued the development of our presence in Lansing we have successfully made a place at the table when it comes to public policy issues effecting the beer industry in MI and continue to build relationships with other key interested parties such as MBWWA, MRA, MLBA. Introduced legislation HB 4709, HB 4710, HB 4711 to support brewery growth. Although these bills have strong support they were not successfully passed before the end of the year. We are hopeful they will be successfully moved through the process and signed into law in We also played an important role in the overall development of a package of bills that will further support growth for small breweries. HB would redefine a micro brewer as a brewery that produces less than 60,000 bbls (currently 30,000 bbls). This would allow breweries that are expanding past the existing 30k bbl limit to do what they currently can up to 60k bbls, including having more than 1 brewing location where they sell beer. HB would increase the current cap of only 3 brewpubs under the same ownership to 6, with a total production up to 12,000 bbls. HB would allow a brewer license to have 2 locations where they can sell beer. This would allow breweries over 60,000 bbls to have a second brewery location where they could have a tasting room.

5 Michigan Brewers Guild 2013 Marketing & Media Recap January 8, 2014 MEDIA COVERAGE MBG responded to countless local, state and national media requests for interviews, provided photos to various outlets for articles and continued to receive record media coverage as the craft brewing industry maintains its interest. Here are some highlights: Mlive.com (John Gonzales) spent several weeks searching for Michigan s Best Brewery giving extensive attention to MBG member breweries and the overall industry. 5 Michigan breweries (Short s, Right Brain, Our Brewing, Harmony and Fenton Winery & Brewery) featured in DETAILS magazine write up on weird summer beers: Beer-Crazy - The Best Weird Brews of Summer Crain s Detroit ran a feature in June titled: How social media puts buzz about craft breweries on everyone's lips The Michigan Beer Film was released and the Great American Brew Trail extended its broadcast beyond Grand Rapids to the Lansing market both featuring MBG members. In late 2013, a new magazine called Explore the Pour was released out of Jackson featuring a couple articles on Michigan craft beer; others are in the works for With a growing number of breweries opening, and expansion of existing facilities, dozens of articles appeared in local media outlets which reinforced the state s overall craft brewing industry. The fall issue of the Pure Michigan Travel Guide featured a 3-page spread on MiBeer. SOCIAL MEDIA Facebook: 17,532 Twitter: 6437 The Mash Blog (accessible on MiBeer.com) FourSquare (check-ins at all festivals; membership lists; researching badge options) ORGANIZATIONAL INVOLVEMENT Brewers Association Michigan Beer & Wine Wholesalers Association Michigan Culinary Tourism Alliance Michigan Department of Agriculture Michigan Festivals & Events Association Michigan Grocers Association Michigan Licensed Beverage Association Michigan Lodging & Tourism Association Michigan Restaurant Association Michigan State University Extension Tourism Industry Coalition of Michigan Travel Michigan (MEDC) West Michigan Tourist Association

6 CONFERENCES & FESTIVALS ATTENDED Pure Michigan Governor s Conference on Tourism (April 2013 Detroit Session on Beer Tourism) Brewers Association Conference (April 2013 Washington DC several staff, board, members represented MiBeer) Michigan Grocer s Association Conference (September 2013 Thomponsville) Great American Beer Festival (September 2013 Denver several staff, board, members represented; MiBeer exhibitor booth) Michigan Restaurant Association Conference (October 2013 Novi Session on Michigan breweries; MiBeer exhibitor booth) Michigan Festivals & Events Association Conference (November 2013 Lansing Session on Event Licensing; MiBeer exhibitor booth) MISCELLANEOUS 105,000 copies of Michigan. The Great Beer State magazine were printed and distributed throughout the year at member breweries, visitor bureaus, conferences and at all Michigan welcome centers. MiBeer.com is under constant upgrading adding new members, content and serving the public and the media. As a result of a grant partnership with the Michigan Restaurant Association, MBG was able have more than 20 Drink Michigan Beer billboards installed around the state of Michigan (many of which are still on display). A video was created for the extended version of the Michigan Beer Fight Song, which was submitted to Intuit during the fall as part of a contest to win a :30-second commercial during the Super Bowl. The video advanced the Guild to the 2 nd round of voting and is now the TGIF social media post to kick off the weekend. Beer City USA three of the top four cities in the 2013 online publicity contest were from Michigan: #1 Grand Rapids; #2 Kalamazoo; #4 Ann Arbor. The Grand Rapids International Wine, Beer & Food Festival expanded the craft brewing presence at its festival with the creation of the 3 rd Floor Brewers Loft where two dozen MBG members were represented with beer and food/beer pairings. A handful of beer-focused workshops were also held throughout the weekend. Several visitor bureaus and tourism organizations featured MiBeer in their annual publications and on their websites, tapping into the beer-cation offerings in their region. Several books on Michigan s craft brewing industry were published including The Beervangelist s Guide the Galaxy by Fred Bueltmann; Art in Fermented Form by Brett VanderKamp; and Michigan s Best Beer Guide by Kevin Revolinski. Respectfully submitted, Dianna Stampfler, Promote Michigan

7 Michigan Brewers Guild Staff & Board Scott Graham, Executive Director Shannon Kuchera, Communications Manager Eric Briggeman, President (Rochester Mills Beer Co.) Scott Newman-Bale, Treasurer (Short's Brewing Co.) Isaac Hartman, Secretary (New Holland Brewing Co.) Steve Berthel, Festival Entertainment (New Holland Brewing Co.) Scott King (MIP Brewing) Brett Vander Kamp, Government Affairs (New Holland Brewing Co.) Dianna Stampfler, Public & Media Relations (Promote Michigan) Michigan Brewers Guild 225 W Washtenaw, Suite C Lansing, MI Updated January, 2014

8 MICHIGAN BREWERS GUILD - BREWERY MEMBERS - JANUARY, North Brewing Co. (Lake Orion) 57 Brewpub (Greenville) Arbor Brewing Co. Corner Brewery (Ypsilanti) Arbor Brewing Co. Pub & Eatery (Ann Arbor) Arcadia Brewing Co. (Battle Creek) Atwater Brewery (Detroit) BAD Brewing Co. (Mason) Bastone Brewery (Royal Oak) Beards Brewery (Petoskey) Bell's Brewery (Kalamazoo) Biercamp (Ann Arbor) Big Buck Brewery & Steakhouse (Gaylord) Big Lake Brewing Co. (Holland) Big Rapids Brewing Co. (Big Rapids) Big Toe Brewery (Traverse City) Black Lotus Brewery (Clawson) Blackrocks Brewery (Marquette) Blue Tractor BBQ & Brewery (Ann Arbor) Boatyard Brewing Co. (Kalamazoo) Bravo! Restaurant & Cafe (Portage) Brewery Ferment (Traverse City) Brewery Terra Firma (Traverse City) Brewery Vivant (Grand Rapids) Brickside Brewery (Copper Harbor) Cellar Brewing Co. (Sparta) Cheboygan Brewing Co. (Cheboygan) Chelsea Alehouse (Chelsea) CJ's Brewing Co. (Commerce Twp) Cotton Brewing Co. (Adrian) Cranker's Brewery (Big Rapids) Dark Horse Brewing Co. (Marshall) Detroit Beer Co. (Detroit) Dragonmead Microbrewery (Warren) Eaglemonk Pub & Brewery (Lansing) Falling Down Beer Co. (Warren) Fenton Winery & Brewery (Fenton) Filling Station Microbrewery (Traverse City) Fort Street Brewery (Lincoln Park) Founders Brewing Co. (Grand Rapids) Frankenmuth Brewing Co. (Frankenmuth) Gonzo's BiggDogg Brewing (Kalamazoo) Grand Rapids Brewing Co. (Grand Rapids) Grand River Brewery (Jackson) Gravel Bottom Brewery (Ada) Great Baraboo Brewing Co. (Clinton Township) Greenbush Brewing Co. (Sawyer) Griffin Claw Brewing Co. (Birmingham) Grizzly Peak Brewing Co. (Ann Arbor) Harmony Brewing Co. (Grand Rapids) Harpers Restaurant and Brewpub (East Lansing) Hereford & Hops (Escanaba) Hideout Brewing Co. (Grand Rapids) HopCat (Grand Rapids) Jaden James Brewery (Kentwood) Jamesport Brewing Co. (Ludington) Jasper Ridge Brewery (Ishpeming) Jolly Pumpkin Artisan Ales (Dexter) Jolly Pumpkin Cafe & Brewery (Ann Arbor) Jolly Pumpkin Brewery & Distillery (Traverse City) Keweenaw Brewing Co. (Houghton) Kuhnhenn Brewing Co. (Warren) Lake Superior Brewing Co. (Grand Marais) Latitude 42 Brewing Co. (Portage) Lexington Brewing Co. (Lexington) Liberty Street Brewing Co. (Plymouth) Lily's Seafood Grill and Brewery (Royal Oak) Midland Brewing Co. (Midland) MIP Beer (Royal Oak) Mitten Brewing Co. (Grand Rapids) Motor City Brewing Works (Detroit) Mount Pleasant Brewing Co. (Mt. Pleasant) Mountain Town Station (Mt. Pleasant) New Holland Brewing Co. (Production) (Holland)

9 New Holland Brewing Co. (Pub) (Holland) North Peak Brewing Co. (Traverse City) Odd Side Ales (Grand Haven) Old Boys' Brewhouse (Spring Lake) Old Mill Brewpub & Grill (Plainwell) Olde Peninsula Brewpub (Kalamazoo) Ore Dock Brewing Co. (Marquette) Original Gravity Brewing Co. (Milan) Our Brewing Co. (Holland) Patchwork Brewing Co. (Decatur) Paw Paw Brewing Co. (Paw Paw) Perrin Brewing Co. (Comstock Park) Petoskey Brewing Co. (Petoskey) Pike 51 Brewing Co. (Hudsonville) Pleasant House Brewing Co. (Three Oaks) Quay St. Brewing Co. (Port Huron) Red Jacket Brewing Co. (Calumet) Redwood Brewing Co. (Flint) Right Brain Brewery (Traverse City) Rochester Mills - Production (Auburn Hills) Rochester Mills Beer Co. (Rochester) Rockford Brewing Co. (Rockford) Round Barn Brewery (Baroda) Royal Oak Brewery (Royal Oak) Saugatuck Brewing Co., Inc. (Douglas) Schmohz Brewing Co. (Grand Rapids) Sherwood Brewing Co. (Shelby Township) Short's Brewing Co. (Bellaire) Soo Brewing Co. (Sault Ste. Marie) Stormcloud Brewing Co. (Frankfort) Tahquamenon Falls Brewery & Pub (Newberry) Tapistry Brewing (Bridgman) The B.O.B.'s Brewery (Grand Rapids) The Library Restaurant & Brew Pub (Houghton) The Livery (Benton Harbor) The Vierling Restaurant & Brewery (Marquette) Traffic Jam & Snug (Detroit) Tri-City Brewing (Bay City) Unity Vibration Living Kombucha Tea (Ypsilanti) Vander Mill (Spring Lake) Walldorff Brewpub & Bistro (Hastings) White Flame Brewing Co. (Hudsonville) Wiltse's Brewpub (Oscoda) Witch's Hat Brewing Co. (South Lyon) Wolverine State Brewing Co. (Ann Arbor) Woodward Avenue Brewers (Ferndale) 119 Total Brewery Members MICHIGAN BREWERS GUILD ALLIED MEMBERS JANUARY, 2014 Platinum Sponsors Brewers Professional Alliance Country Malt Group GW Kent Gold Sponsors Alliance Beverage Distributing Crown Packaging International Fischer Insurance IHS Distributing Imperial Beverage Company Silver Sponsors American Rentals Eastown Distributors Company Fabiano Brothers Great Lakes Beverage Company Great Lakes Brewing News

10 Griffin Beverage Company John P. O'Sullivan Distributing, Inc. Powers Distributing Company Promote Michigan Promotion Concepts, Inc. Rave Associates The Boelter Companies West Side Beer Distributing Bronze Sponsors Beer City Glass Enerco Corporation Land & Sea Packaging Miller Canfield Pilot Malt House Revolution Design Supporters Beervangelist Guide to the Galaxy BG Gillen Beer Bottle Grabbers Brewers Association Brewers Supply Group Briess Malt & Ingredients Co. Broadmoor Products, Inc. Craftwerk Crunchy's Supporters - cont. Energy Optimization Solutions - Miura Boiler FSBR Law Grand Trunk Pub Hop Head Farms I'm a Beer Hound Karl's Cabin Karr Laboratories KegLove Leonard's Syrups Libation Container Lucy Saunders / Grilling With Beer Mary Haskin Design metrotimes MI*Brew Michigan Beer Guide Michigan Festivals & Events Association Michigan Hop Alliance Michigan Malt Michigan Restaurant Association Michigan Saves Millennium Restaurant Group Newburg Law PAA Pall Food & Beverage Red Salamander Slows Bar BQ Stanpac Tap House (Kalamazoo & Portage) Vitale's Sports Bar Working Bugs WSI Breweries in Planning Batch Brewing Co. North Center Brewing Co. Rare Bird Brewing Co. Windmill Pointe Brewing Co.

11 Michigan Brewers Guild Holds Memberships or Partners with the Following Organizations