1 big thing: State of craft brewing in Minnesota

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BleedGopher

BleedGopher

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Per Axios Twin Cities:

Craft brewing's skyrocketing growth over the past decade in Minnesota has finally come to a halt as the industry sorts out a new normal.

Why it matters: According to the Brewers Association, craft breweries had a nearly $2 billion economic impact last year in Minnesota, and the boom has brought taprooms to urban neighborhoods, suburban strip malls and rural main streets.

Yes, but: Consumption in Minnesota is falling. It peaked from 2016 to 2018 and has been declining since then.

2023-06-22-1443-beer-production-in-fallback.png

Data: Minnesota Department of Revenue. Chart: Axios Visuals
What's happening: Breweries are feeling the pinch from increased competition, rising labor and ingredient costs, and the surge of seltzers and canned cocktails.

  • "The hard part for craft brewers right now is the ever-changing tastes of the consumer and what people are actually drinking," Bob Galligan, director of government and industry relations for the Minnesota Craft Brewers Guild, told Axios.
What to watch: If the golden age of craft brewing is over, Minnesota's beer makers might be at the forefront of a new gold rush.

  • When the state legalized THC seltzers a year ago, craft breweries quickly began making the beverages, which are rapidly gaining popularity here.
  • Those seltzers, industry experts say, have high-profit margins, but that could change with more competition.
  • Brewers, though, are still trying to get a grasp on how big of a market there will be for those beverages.
Go Gophers!!
 

Surly CEO Omar Ansari battles declining beer sales​


Surly Brewing CEO Omar Ansari is adjusting to a world where people drink less of his beer.

Flashback: Surly was at the forefront of a beer revolution in Minnesota about a decade ago and Ansari's lobbying to change state regulations helped pave the way for an explosion of taprooms.

Yes, but: He now finds himself battling for market share and tap handles with the competition he helped create, while also trying to navigate a changing adult beverage industry that is flummoxing both him and other brewers.

By the numbers: Surly was among the fastest-growing breweries in the U.S. 10 years ago but is now brewing 37% less beer than it did five years ago.

State of play: Some of what happened to the Minneapolis-based brewery is due to macro trends, as 29 of the 50 largest craft breweries in the U.S. reported declining sales in 2022. Locally, Summit Brewing and a dozen of the other top 20 breweries in Minnesota also reported declining sales last year.

  • Alcoholic seltzers and canned cocktails have exploded, while consumption of craft beer has stagnated or declined.
  • Surly now competes in a state with more than 200 breweries, up from 50 in 2012.
Zoom in: But Surly also faces unique challenges. Ansari is still suffering the consequences of closing his massive Minneapolis brew hall in the winter of 2020-2021 when he cited Covid for eating away at profitability.

Between the lines: Labor organizers accused him of attempting to block a unionization effort that was underway when he announced the closure.

  • "I don't think it's helped (sales)," he told Axios, adding that he gets people at liquor stores who will decline taste tests because of the union issue.
  • Ansari notes that those employees eventually voted against forming a union.
  • And Unite Here Local 17 withdrew an unfair labor practice charge. "There wasn't union busting going on here," he said.

Go Gophers!!
 

My impression, it's the "seltzer boom" (which is mentioned in the article) is the #1 reason for the decline.
 


Interesting that the dip came during the Covid years. I would've thought the opposite. Unless taprooms are really that much of a money maker. We'll see if 2023 is a bounce back year.

Or maybe people are just drinking less. Dry January has caught on, and maybe people are realizing the health benefits. I used to be a big craft beer guy. Now I only drink when out with friends and never at home. I've definitely noticed a change.
 









Nokomis said:
From left to right: Bad, Ted, Ogee, Noko, CRG, Frink, Ope, Ice
Click to expand...
Dude with the hat is the worst by far. Tank top, chain, multiple rings, hand signs, etc. I mean...can he get any more douchey?
 

Younger people now drink less than previous generations. And those that do tend to drink more of non-beer alcohol.
 

tikited said:
Dude with the hat is the worst by far. Tank top, chain, multiple rings, hand signs, etc. I mean...can he get any more douchey?
Click to expand...
The ironic thing about that photo is that they are all so desperate to be unique and stand out, that they all end up looking the same.
 





Too many breweries chasing the same dollars. And really some of the stuff has only niche appeal. Chocolate peanut butter stout is something you drink one of on a dare.

Even something like Surly Furious, which is good, isn’t a Great fishing beer. If it’s 90, it’s like eating a Beef commercial on the boat.
 


Gophers1992 said:
The ironic thing about that photo is that they are all so desperate to be unique and stand out, that they all end up looking the same.
Click to expand...
To be completely off topic, that’s the calling card of all “counterculture” groups. They all want to be different, but all subscribe to whatever the uniform is of “their group”.

I was at Como Zoo a while back with my kids and there was a group of 5 goths (high school age), which were all very polite and courteous for the record. Literally every one of them had black Doc Marten boots which when I was in school, were $120 (not sure what they run now, but assuming more expensive). And their general clothing looked indistinguishable. I just chuckled to myself- you’re so tortured you’re wearing expensive boots your parents bought you- life must be really rough.
 

Another thing that likely has an effect- the anti-gluten craze. Those hard seltzers are gluten free, and I know of a few people that specifically drink those and not beer as they claim to be “sensitive to gluten”. Like everything, that craze will wane, but most assuredly it has an effect.
 

Ope3 said:
My impression, it's the "seltzer boom" (which is mentioned in the article) is the #1 reason for the decline.
Click to expand...
Young people are also drinking less alcohol, that's a good thing.
 

saintpaulguy said:
Chocolate peanut butter stout is something you drink one of on a dare.
Click to expand...

Those beers are great on a cold winter night. An added bonus is you don't need to eat because it's a meal in a bottle.
😎
 

Wow, Anchor Brewing is going to close after 127 years in business. They we're one of the earliest of the Craft Brewers going back to the 7Os when switching two more artisanal style brought the brewery back from the edge of collapse. Going to have to find some anchor steam before it's gone.
 

Frink said:
Wow, Anchor Brewing is going to close after 127 years in business. They we're one of the earliest of the Craft Brewers going back to the 7Os when switching two more artisanal style brought the brewery back from the edge of collapse. Going to have to find some anchor steam before it's gone.
Click to expand...
It’s gone.
 

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