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Jon Collins, MPR News 90.3 FM, Published October 29 2013

Surly Brewing finally taps into law it helped create

ST. PAUL – The Surly Brewing Co. broke ground Tuesday on its new brewery in Minneapolis more than two years after Gov. Mark Dayton signed a bill giving Minnesota brewers the right to sell beer where they make it.

The bill that changed Minnesota’s liquor laws was prompted by Surly’s plans to expand its brewery in Brooklyn Center. But as Surly searched for a site for its “destination brewery,” dozens of other breweries around the state opened their own taprooms.

Taprooms helped those small breweries gain a foothold in the state and spurred a thriving new industry of regional and neighborhood craft breweries, according to Clint Roberts, executive director of the Minnesota Craft Brewers Guild, which represents about 50 craft breweries and brewpubs across the state, about half of which now have or are planning taprooms.

Roberts said the taprooms help breweries to engage directly with their customers.

“You can see and touch and understand better how the beer’s made and then sit and talk to the person who brewed the beer and drink it right on site,” Roberts said.

Surly’s $20 million destination brewery will be built on an 8.3-acre site in Prospect Park in Minneapolis and will include a bar, beer garden and event center.

The epicenter of the taproom boom

Although taprooms have been open in small towns like Marshall and suburbs like St. Louis Park, the epicenter of the taproom boom is located in northeast Minneapolis.

Indeed Brewing Co. was the first taproom to open in northeast. Co-founder Tom Whisenand said the brewery’s initial plans didn’t include a taproom, but that it was added after the “Surly Bill” passed. He said it’s been instrumental in expanding the brewery, which announced a second expansion since 2011 on its website Monday that is aimed at doubling production.

“When we first opened the doors, people came in and they had their first Indeed beer here,” Whisenand said. “Then they went out to their local liquor stores and local bars and restaurants and said, ‘Hey, do you have Indeed? Can you get Indeed?’ ”

Indeed was drawn to northeast Minneapolis by the area’s long brewing history and wealth of industrial buildings that can be used as breweries. Those characteristics have drawn other breweries to the neighborhood.

“There are two other taprooms here now. And I can’t tell you how many, but there are others planned in the area,” Whisenand said. “Now there’s just a culture of taprooms up here, and people are making it a destination.”

Groups of people now regularly tour the area breweries, especially on Saturdays.

But Whisenand said many who come to Indeed, which is located on two dead-end streets next to a set of railroad tracks, get the impression that it is a purely neighborhood place because of its obscure location.

Brendan Keenan lives on 15th Avenue in northeast Minneapolis, not far from Indeed or Dangerous Man Brewing Co. He said the taprooms have a more family-friendly vibe than some of the neighborhood bars.

“We avoid the bars on the weekend, but we’ll go over to a taproom,” Keenan said. “We’ll go over in the summer and sit on the patio.”

The spread of the taprooms is a return to the industry’s roots of breweries that serve small geographic regions or neighborhoods, Whisenand said.

“If you look at beer history in the United States and throughout the world, beer was always made locally,” Whisenand said. “It wasn’t until there was basically a bunch of smart business people who started to consolidate all the breweries to make bigger profits that suddenly beer became this mass-produced thing that wasn’t local anymore.”

The taproom boom isn’t confined to one neighborhood in Minneapolis. Brau Brothers Brewing Co. started out as a brewpub, spun off into a brewery production facility, and now have moved to a larger space in Marshall and added a taproom. Co-founder Dustin Brau said they haven’t had trouble attracting people to the taproom in the small town.

“What we found out is that you pull beer people out of the woodwork,” Brau said. “We’re finding out that there’s so many good beer drinkers out there, but many of them have been in the shadows a little bit because we just don’t have the venues and market down here built up for craft beer.”

As brewmaster, Brau sees other advantages to having a taproom.

“You can make some small batches and throw them against the wall, you don’t need to commit to packaging,” Brau said. “You can get people’s opinions on a beer, a product, directly from them.”

But the taproom boom ultimately comes down to a matter of economics.

“It allows you to flow a little bit of cash earlier on in your business lifespan, and I think that makes it easier to start up,” Brau said. “It’s a little easier to turn over beer and dollars there initially as you work to make a name for yourself in the industry.”

Economic impact

Minneapolis Mayor R.T. Rybak said taprooms are making a big impact on the economy across the state.

“Ironically, it’s tough to find any law changes that have had such a tangible visible impact on just people in the community as the Surly bill, which rightly is good for those of us who like really good beer,” Rybak said, “But it’s really been a jobs bill.”

In the 15 months since it opened, Indeed Brewing Co. has gone from a staff of seven people to 24 workers, half of whom are full time. Brau Brothers Brewing Co. said it added roughly 25 people to the payroll when it opened its taproom about three weeks ago. Both breweries have plans to do more hiring.

Rybak said breweries with taprooms have managed to carve out a niche for themselves in the worst economy the country has seen since the Great Depression.

“A whole new collection of cottage industries, homegrown industries, have really grown up,” Rybak said. “If you can buy something and employ someone who’s in your neighborhood, it hedges against every other economic trend that you can have.”

Rybak said the trend toward taprooms is connected to the thirst for distinctly regional food and culture.

“People are rejecting the whole idea of the ‘chain-ification’ of the world and the sameness we find in cities and destinations that we go to,” Rybak said. “Minnesota no longer has to march in anyone else’s shadow – we’re creating our own beer [and] food, and I think that’s a good thing.”

Although it sometimes seems that Minnesota is already deluged with craft breweries and taprooms, Roberts of the Minnesota Craft Brewers guild said there’s still room for craft breweries’ market share to grow.

“This state especially likes to support local, there’s a lot of pride in what we produce here,” Roberts said. “If you look at the numbers, 85 percent of people still don’t enjoy craft beer regularly. So if you’re looking at it that way, the sandbox is still quite large.”