Lowertown Letdown: Birch’s now the second brewery in the neighborhood up for sale

Birch's Lowertown opened on September 11, 2018 in Market House Collaborative // Photo by Aaron Job

Birch’s Lowertown, opened on September 11, 2018 in Market House Collaborative, is up for sale // Photo by Aaron Job

St. Paul brewpub Birch’s Lowertown has been listed for sale, just over one calendar year after they opened for business in the neighborhood’s Market House Collaborative building.

The Growler became aware of Birch’s Lowertown’s intention to sell their brewery via a classified ad listing on ProBrewer, an industry-insider resource. The short ad, credited by name to Birch’s Lowertown brewmaster and co-owner Brennan Greene, contains a photo of the Lowertown location’s brewing facility and the following message.

“Turn key brewery installed and ready to brew. Lightly used for 1 year, current existing brewery looking to sell. Located in downtown St Paul, Minnesota. 10bbl brewhouse, 1,500bbl capacity.”

When reached for comment, Greene clarified that while the brewery is indeed for sale, Birch’s Lowertown has no intention to close at the moment, and if he and co-owner Burt Joseph can’t find a buyer interested in purchasing the entire brewing facility and taproom, business will continue as usual for the foreseeable future.

“The bottom line is, we’re just kind of wanting to see if we had any options available to us; if anyone was interested in taking the space over as is,” Greene explained by phone.

“As of right now, it’s okay. We’re not losing money but we’re also not really making money, so it just kinda seems like we’re killing ourselves for not much and we wanted to see if it was an option out there for someone who maybe wanted to start their own brewery but maybe didn’t want to go through all the effort of getting everything done themselves.”

Birch’s Lowertown opened for business on September 11, 2018, as a satellite location of Birch’s on the Lake in Long Lake, which itself opened in October of 2015. Greene and Joseph took an ambitious, and expensive, route to their expansion by installing a full brewing system inside the Lowertown space. Satellite locations of other brewpubs in Minnesota, such as Town Hall and Fitger’s, for example, don’t house their own brewing systems, but rather serve the beer made at the original brewpub facility.

Rows of fermentors and brite tanks in the lower level of Birch’s Lowertown // Photo by Aaron Job

Just two months after opening their taproom, Birch’s Lowertown further expanded into the basement of Market House with the swanky, speakeasy-style Barrel House and Piano Bar Lounge. In addition to offering a more upscale ambiance and regular live music residencies, the space also housed Birch’s entire barrel-aging program, which was relocated from the original Long Lake brewpub.

According to Greene, the cost of this rapid expansion definitely played a role in their decision to put Birch’s Lowertown up for sale. While the co-owner is immensely proud of Birch’s well-appointed taproom and facility, he notes that covering costs has been an uphill battle.

“For how much money we spent on making it look nice, we could never recoup our investment,” Greene says, candidly. “We’re barely able to make our interest payments, let alone pay back the principal on the loan, so that’s a big part of our motivation in trying to sell it as well, just to be able to get back close to even, and hopefully we won’t have lost too much on the whole venture.”

Low traffic in Lowertown?

Birch’s Lowertown is now the second brewery currently listed for sale in Lowertown, with the first being the now-defunct 12welve Eyes Brewing, which closed in June. Greene cites some inherent challenges to the neighborhood, including external signage restrictions on historic buildings and the costs associated with moving heavy brewing equipment into the building. He also describes the feast-or-famine nature of customer traffic in the neighborhood as a chief cause of Birch’s struggles.

“Any time there’s an event going on in St. Paul, or a Saints game, or a parade, we can have some great days down there and there are tons of people and lots of people walking around,” he continues, “But on the days where there aren’t any events going on, everybody seems to clear out of the city pretty early. There’s just not enough crowds in the evening hours to really justify being open seven days a week.”

One of the principal reasons that Greene and Burt Joseph were originally attracted to the Market House Collaborative building was the involvement of local chef Tim McKee in the project. Octo Fishbar (which handles food preparation for Birch’s Lowertown’s menu) was intended to be the engine that drove business to the building, but it hasn’t been enough to meet Birch’s sales projections.

The other two breweries in the neighborhood, Barrel Theory Beer Company and Tin Whiskers Brewing, are still thriving. According to state tax data, Barrel Theory saw an increase in production from 448 barrels in 2017 to 940 barrels in 2018, while Tin Whiskers saw a modest decline from 2,140 barrels in 2017 to 1,999 barrels in 2018.

Brewpub blues

While he’s circumspect about the variety of different factors that could have contributed to Birch’s Lowertown’s struggles, Greene doesn’t mince words about his frustrations with the restrictions placed around brewpubs by the state’s legal system.

“If we could just distribute, just a little bit, if we could just sell kegs to Octo Fishbar in the same building as us and maybe a couple of other accounts around St. Paul, we’d be just fine,” Greene states. 

“We have a 1,500-barrel capacity and we’re only gonna do maybe 350–400 barrels this year, so we have all this extra capacity and if we can’t sell it over the bar, we don’t have any other options. [Birch’s Lowertown] was actually originally going to be a production space, but because of Long Lake being a brewpub, we couldn’t even set it up as a production space.”

Birch’s Brewmaster says that his perspective on the self-distribution and brewpub laws has shifted in the last few years after seeing the opportunity cost of that wasted capacity firsthand. He’s also become a believer in the power of grassroots marketing that can come from distribution.

“The advertising you get by having your beer in other places is priceless towards bringing more people into the brewery,” Greene says. ” I also know if we keep things local and small, I can still keep a close eye on all the beer and pull it if any issues arise.”

Greene says that if he and Joseph can’t find a prospective buyer for their space, they’ll consider making a strong lobbying push to change the law, but that he ultimately just hopes for a graceful exit from the neighborhood.

“In the end, all I ever wanted to do was keep making different styles and try out new things, and we can do that from Long Lake in a business that’s profitable.”