The Story Of Bell's Brewery: Larry Bell Grows From Stoner Beer Baron To Craft Beer Icon

A few decades ago, Larry Bell would show up at parties with bottles of beer he brewed in his basement. Some people were leery of this self-described stoner’s early editions of bootleg booze. Bell doesn’t blame them.

“There was a lot of bad beer in the beginning,” Bell tells Benzinga. “But it had so much more flavor (than regular beer) that people overlooked the flaws.”

Bell's Brewery

Today, Bell is a bona fide beer baron. He is principal owner of Bell's Brewery, Inc., the 12th-largest brewer in the nation with revenues upwards of $100 million annually. Bell's brews -- Two-Hearted Ale is among the most popular and Oberon Day holds a special place in many hearts -- are available in at least 33 states and counting. He's currently staging a tactical invasion of Texas.

So-called “craft beers” such as Bell’s have eroded the big global producers’ hold on the market. Beer sales were down 1.2 percent through the first 50 days of 2017, according to market research firm IRI Worldwide. Bell’s volume sales, meanwhile, were up 26.7 percent during the same period.

“Beer has lost to wine and spirits, along with the phenomenon of craft beer,” said Bart Watson, an economist for the Brewers Association, a craft beer trade group.

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Where It All Began

Bell’s journey began in late 1970s when he got a job at a bakery in Kalamazoo, Michigan, where he learned about yeast and began brewing beer as a hobby. By 1980, he was using tubs to brew his own beer in his basement while his roommate grew marijuana upstairs.

“We were a self-sufficient household,” he says.

The demand for Bell’s underground beer grew to the point where people he didn’t know were showing up at his place to buy. At one point, thinking federal authorities were pounding on his door, he fled through a window, only to find out his visitors were members of a bluegrass band in the market for a case of Kalamazoo Cream Stout.

He began with a $200 stake -- a birthday gift from his mother -- and incorporated for $35. He gradually took on investors, including the owner of a local spice company who supplied the hops. He eventually set up home-brewing supply company in a space at the bakery. Today, he has two breweries in Southwest Michigan and a small one in Escanaba.

“The first years (were) really, really lean,” he says. “We didn't have money to buy bottles. I had a license to sell other beers. We would hand-wash the bottles. Hand-sanitized. Rinsed, filled, labeled, distributed,” he says.

In 1984, he met a roommate of one of his customers, fell in love and got married. The next decade brought two kids while Bell spent most of his days either brewing or selling, delivering barrels and bottles to stores and bars from Chicago to Detroit. Bell’s wife at the time, Sue Kovats-Bell, supported the family during the early years as a nurse.

“He was very creative, very smart,” she says. “I'm attracted to creative, hippie-like guys. He had a dream. At that time it was pretty revolutionary. The guy was broke.”

Taking It Next Level

Peter Travis, former manager of a sandwich shop where Bell worked, said the budding brewer “had enough business acumen to take it to the next level...and a lot of people don’t. I see it in the restaurant business. People know how to make good food but they don’t know how to make money.”

Kovats-Bell said she promised to support Bell for five years after the two married in 1985. “It ended up being 10,” she says. He moved from the bakery into “a desolate warehouse. He’s like, "This is where the beer kettles are going to be, this is where the fermeters are going to be."

“I knew he could pull this off. We came close to bankruptcy. I was risking losing our little tiny home and our little car.”

The pressures eventually ended the marriage just as the brewery was beginning to turn the corner.

“He was gone a lot. I didn’t feel the teamwork any more.” She said she could have had 50 percent of the stock, but settled for an amount she called “minimal.”

The brewery business hasn’t been easy on Bell’s marriages. “I’m on my fourth wife,” he said.

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Keeping It In The Family

Bell intended to keep a majority stake in his brewery, but by the time the 1990s rolled around, he was controlling only 40 percent. Relations with investors grew increasingly contentious. Lawsuits ensued. He spent much of the decade buying out his investors until he once again had majority control.

He’s grooming his daughter to take over as CEO.

“I was two months old when he founded the brewery,” says Laura Bell. “Parents divorced when I was 10 and the brewery was part of that. I think he was more invested in making the brewery successful.”

She never envisioned succeeding her father. “I had resentment toward him and what the brewery stands for. Would have I appreciated a more present dad? Yeah,” she said.

She said she gradually grew to appreciate the business after she took a job in production in 2008. “I learned about Bell from other people,” says Laura Bell. “I found the employees were passionate and engaged and awesome. I realized that Bell's was much more than my father. I thought: I cannot (mess) this up.”

A Revolutionary

Bell, 58, realizes he’s changed as Bell’s has boomed. He was an affable jazz flautist who relied on a bicycle as basic transportation into his 20s. Now, among his 10 cars are half a dozen Jaguars of various vintage, along with a Bentley, a Rolls-Royce and a vintage Checker cab. He has season tickets to his beloved Chicago Cubs and once threw out the first ball. He sang “Take Me Out to the Ball Game” in the announcer’s booth. He has houses in Michigan and one in Chicago.

The Brewers Association’s Watson says Bell’s today is on solid ground, with a broad portfolio of beers and a loyal customer base.

“They have taken a slow and steady approach that has enabled them to stay family owned,” said Watson. He said it would be difficult to do now what Bell did with the market in the 1980s and 1990s, where he ranks with craft brewers from the era such as Anchor Steam and Sierra Nevada.

“They were among the pioneers,” Watson says.

Today, the company has 525 employees. Bell doesn’t see the business ever going public.

“I could sell and get a boatload money, but how much money do you need?” asks Bell, who survived a prostate cancer scare nine years ago. “I get to own a brewery. How much fun is that?”