— Madison-based Great Dane Brewing Company is encountering supply chain-related delays and higher costs as it gears up to open a new brewery in Japan next year.
That’s according to brewmaster Rob LoBreglio, who yesterday discussed the company’s plans for the new brew pub in the city of Sendai, located about two hours north of Tokyo. He spoke during a trade policy virtual luncheon hosted by WisBusiness.com, WisPolitics.com and the Wisconsin Technology Council.
“We started this process over eight years ago, and finally now after eight years we broke ground last month,” he said. “Going over next week, we’re going to have a groundbreaking ceremony and hopefully we will be open by late spring or summer.”
While LoBreglio highlighted the opportunities presented by the Japanese market, he also explained how supply chain disruptions have complicated the expansion effort. He said much of the equipment and raw materials for the project are coming from the United States, Canada and China.
“Confirming not only when the equipment would be manufactured, but also the length of shipping time, has been problematic for us,” he said. “There’s certainly been a big increase in our construction costs.”
He said company leaders will soon be meeting with the construction company working on the building, and expects “bad news” on how much these costs have risen.
“There’s a lot of big issues still up in the air once we see what the realities are of these cost increases — not only construction but the equipment costs have gone up, the shipping costs have gone up,” he said.
But he noted the expansion coincides with rising demand for craft beer among Japanese consumers. He said it currently makes up about 3 percent of beer consumption in the country, and that market is expected to double in size. LoBreglio said “there really aren’t enough craft breweries to satisfy” that demand.
During a previous visit to Sendai, he said he was “extremely impressed” with the “large, vibrant young city with good beer consumption, a lot of sports enthusiasm.”
“It felt like Madison did to me way back when, when we got started,” he said, adding the company recently celebrated its 28th anniversary.
LoBreglio noted the Sendai location will have a tasting room and restaurant attached but will primarily be a production brewery focused on marketing its beer throughout Japan.
— Other speakers representing Japanese firms with operations in Wisconsin touted the benefits of trade ties.
Tech Council President Tom Still, who moderated yesterday’s discussion, noted Japan is Wisconsin’s largest foreign investor with about $2.4 billion in direct investment in the state since 2014. And a fact sheet provided by Still shows 58 Japanese companies operate in Wisconsin, with 80 facilities supporting 8,500 jobs.
But Frank Fan, head of biology for Promega Corporation, said “we can still do a lot better.” Still describes the biological testing products company as the “grandfather” of Wisconsin biotech, anchored by its operations in Fitchburg.
Fan expressed hope that U.S. companies will continue to expand relationships with Japan as well as other Asian nations including China. But he also touched on the “uncertainties around China,” referencing the potential for conflict around Taiwan and the severe technology supply issues that would follow.
“But Japan is relatively stable, so it represents good opportunities,” Fan said.
Fujifilm Cellular Dynamics Inc. CEO Tomoyuki Hasegawa highlighted Wisconsin’s strength in health care, life sciences and stem cells in particular. CDI was originally founded by a group of stem cell experts including Jamie Thomson, a UW-Madison biologist famous for his work in this field.
“We drive to constantly grow organically,” Hasegawa said. “And also we see a lot of new technologies coming from spin-offs from universities, and also new ventures and entrepreneurship — these are great things for the U.S. and also in Wisconsin.”
Meanwhile, Kikkoman Foods Vice President Dan Miller said that while cultural differences between Japan and the United States may hold some firms back, “we have a lot more in common with our Japanese co-workers than we have differences.” He said U.S. companies shouldn’t hesitate to seek out business opportunities with companies across the Pacific.
Hasegawa agreed, adding that “seeing is believing” when it comes to similarities between Japan and Wisconsin. He noted the state’s strengths in food, beer and natural resources align well with Japan’s own culture.
See more on trade at WisBusiness.com, including episodes of the “Talking Trade” podcast and previous virtual luncheons: https://www.wisbusiness.com/trade-policy/
— October home sales in the metro Milwaukee area declined 29 percent over the year, according to the latest report from the Greater Milwaukee Association of Realtors.
GMAR points to two main factors for this trend: the relative strength of last year’s market; and rising interest rates. The organization notes 2021 was “the best year ever” for home sales and matching or exceeding that performance would be very difficult.
Meanwhile, report authors say the interest rate increases that began last summer have begun to weigh down the market. Per the report, interest rates are now between 6 and 7 percent, compared to 5 percent in June.
A total of 1,492 homes were sold in the four-county metro Milwaukee area in October, compared to 2,101 in October 2021. That includes Milwaukee, Waukesha, Ozaukee and Washington counties. When Racine, Kenosha and Walworth counties are included, the percentage decline is slightly lower at 26.3 percent.
GMAR’s report also shows fewer first-time buyers are seeking to buy a home, and home listings in October were lower across the entire metro area and southeastern region with the exception of Ozaukee County. Those factors have contributed to average sale prices rising 9.4 percent over the year, the report shows.
“The systemic problem with the market is the lack of construction of new single-family houses and condominiums, and over production of apartments,” report authors wrote.
Get the latest report here: https://www.gmar.com/resources/research-statistics/2022-housing-statistics
<br><b><i>Top headlines from the Health Care Report … </b></i>
— State health officials have announced Medicaid reimbursement for nursing homes will rise from 77 percent to 91 percent for fiscal year 2023.
And a psychology professor at Marquette University is getting a $2 million state grant for efforts to expand the mental health workforce and provide specialized training.
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#TOP STORIES#
# Wisconsin-based company under investigation for allegedly using child labor
# Wisconsin athletics’ economic impact on the state climbs in latest report
# Health systems in the red: Advocate Aurora posts $911M loss, ProHealth loses $100M
#TOPICS#
# AGRIBUSINESS
– Wisconsin Cover Crop Conference slated for December 13
# CONSTRUCTION
– Milwaukee needs to level its budget to bring in more contractors, projects, officials say
– Hoffman wins $201M project as part of I-43 improvements
– Drexel Building Supply to acquire McMahon and Company
# EDUCATION
– Gallenberg named new dean of UWRF’s CAFES
– UW-Madison provost, a finalist for chancellor, will rejoin faculty ranks
# FOOD AND BEVERAGE
– The Buzz: This fast-growing coffee chain just opened its second Fox Cities location
# HEALTH CARE
– Wisconsin issues health alert as flu and RSV cases increase, hospitalize children
# LEGAL
– UW-EC implicated in discrimination claim against UW System
# MANUFACTURING
– Rockwell Automation lands Ford as latest major electric vehicle contract
– Kohler completes generator plant expansion in Sheboygan County
– Generac re-issues recall for portable generators that can cause injury
# REAL ESTATE
– Milwaukee’s Schuster Mansion up for auction
– Neumann acquires Silver Spring Golf Club, plans to move forward with large subdivision
– Less expensive ‘workforce’ apartments narrowly advance in Brookfield
– Foxtown Landing project endorsed by Third Ward Architectural Review Board
– New market-rate housing opens on North Side with help from city
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