Brewpubs: A Viable Business Model in Minnesota?

Deep Thoughts with Dave Hoops

by Dave Hoops

I wrote this article for two reasons. First, to help the craft beer lovers of Minnesota understand the beer rules. Second, to support the fact that yes, brewpubs are a viable business model in this state – they just have to work a bit harder within the current beer law climate.

I am asked hundreds of times a year why folks can’t buy the beer I make at their local pub or beer store. To simplify Minnesota’s separate definitions of  ”brewpub” and “production brewery,” I have put together the following bullet points:

Did You Know…

Minnesota brewpubs:

  • Can sell beer on premise for patrons
  • Can sell growlers and bombers from one location per municipality
  • Are limited to 3,500 beer barrels (bbls)  (equal to 7,000 kegs) production per location annually
  • Can sell the beer they produce at any other licensed locations owned by the same parent business
  • Cannot distribute through a wholesaler or self distribute any beer to bars, liquor stores, or any location not self-owned.

Minnesota production breweries:

  • Can distribute through a wholesaler or self-distribute up to  25,000 bbls
  • Can own one taproom that sells only their beer and food attached to brewery
  • Can sell their beer at bars and liquor stores, including other states, with proper licensing

 

So now you know that the only way to enjoy beer from a brewpub is to go to the brewpub itself or one of its satellite locations.

 

Northbound-2

When I moved to Minnesota from California in 1999 to take over brewing operations at Fitger’s Brewhouse, I was surprised at the distinction between brewpubs and production breweries. With time, our business has been able to grasp some advantages we have in Duluth.

Since Fitger’s Brewhouse cannot distribute, we have helped to create a homegrown craft beer scene that has grown organically. We have opened four other locations in Duluth to continue to create jobs, contribute taxes, and rescue historic buildings to make them a part of the beauty of Duluth.  We are the kings of localism. We have over 300 people employed in the city at this time with plans for future growth into other markets. Best of all, since we cannot distribute, we never lose sight of our beer. We pour the freshest beer and do all our own line maintenance, staff education and beer-centric promotion with no disconnect from our patrons. Our company has made a conscious effort to embrace the way things are, because we want to be in Minnesota and we want to brew with the amazing water here. We want to create jobs and careers for like-minded folks.

Brewpubs like ours also act as an unofficial “farm team” for brewers. We train and work on extremely hands-on brewing equipment and send brewers on their way into the explosion of new breweries with solid brewing skills. If I’ve said it once I’ve said it a thousand times: IT’S ALL ABOUT MAKING THE BEST BEER POSSIBLE.

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