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Is Craft Beer Peaking in MSP? Not Yet, As These Five New Breweries and a Community Tap House Show

Another month, another craft brewery opening.
These days, MSP seems to have more independent craft beer producers than adults of legal drinking age. And yet the brewery announcements, grand openings and expansions keep coming. Are we reaching peak craft beer?
Not quite yet. Thanks in part to the fact that taprooms weren’t legal here until 2011, when the Minnesota State Legislature passed the so-called Surly Bill, MSP and Minnesota remain underserved by the craft beer industry relative to neighboring states.
According to Lakes & Legends Brewing Company founder and CEO Ethan Applen, who conducted extensive market research before deciding to locate in Loring Park, Wisconsin and Michigan both have higher rates of local craft beer penetration than Minnesota. In other words, when Wisconsinites or Michiganders head to the bar or liquor store, they’re more likely than their Minnesotan counterparts to quaff a craft brew produced in their respective home states. (Applen’s research excluded local macrobrews, like Milwaukee-made Miller.)
By contrast, Minnesotans are more likely to drink craft beers produced out of state, or eschew craft beer altogether and head for the macro fridge. To Applen, MSP’s relatively low market penetration presented an impossible-to-ignore opportunity — which is why the California native chose to open his brewery here, not in Madison or Detroit.
But MSP’s relative paucity of craft beer doesn’t mean the taprooms and production house boom can continue unabated. The five breweries profiled here, all of which opened earlier this year or are set to open within months, take a more disciplined approach to the art and science of beer. Nearly all plan to focus on a particular stylistic (such as Belgian-style brews) or a social (such as active, sporty folks) niche.
Many have raised $1 million or more in startup capital, a hefty sum by independent craft brewery standards, in the hopes of “starting big” and avoiding the “constant cycle of expansion” that often trips up smaller breweries, says Bryn Mawr Brewing’s Dan Justesen.
Here’s a look at what to expect from MSP’s newest craft breweries — and some thoughts on when we can expect the craft beer boom to take a breather.
56 Brewing
Tucked into an industrial district in Northeast Minneapolis, between vast railyards and the Mississippi River, 56 Brewing isn’t exactly easy to find. But finding 56 Brewing is almost beside the point. While 56 Brewing does have a functional taproom, its main differentiator is the fact that it operates as a CSB — Community Supported Brewery.
Just like a CSA, 56 Brewing sells shares to members. CSB members get a set amount of free beer on a weekly, bi-weekly or monthly basis, depending on share size; members located in Northeast Minneapolis can get free home beer delivery. CSB members are also privy to new release pre-order opportunities, free brewery swag and a 10 percent discount on all other purchases. A portion of each CSB share’s proceeds supports 56 Brewing’s growing network of local agricultural suppliers.
For those who can’t visit the taproom or don’t want to purchase a CSB share, 56 Brewing’s beers are on tap at a handful of MSP bars, mostly in Northeast Minneapolis.
Lakes & Legends Brewing Company
Lakes & Legends Brewing Company sounds tailor-made for tough-as-nails North Woods gullets, not Loring Park’s presumably more discerning palettes. But after opening this fall, Lakes & Legends will share high-end LPM Apartments’ ground-floor retail space with Chicago fave Eggy’s Diner’s much-anticipated MSP outpost. Lake and Legend’s charge is to bringing complex, delicately balanced Belgian-style ales to a neighborhood not normally associated with craft beer.
Co-founders Ethan Applen and Derrick Taylor are confident they can pull it off. Both are successful professionals with keen business minds: Applen worked for years as a strategist and tech specialist for Warner Brothers, while Taylor spent more than a decade in national and regional marketing for Red Bull.
“We looked at the ‘usual suspects’ sites,” says Applen, like industrial buildings in Northeast Minneapolis, Midway and St. Paul’s West End neighborhood. “We expected to be priced out of downtown Minneapolis.”
Ultimately, Applen decided Loring Park was both underserved by craft brewers and too densely populated — “there are around 6,000 people within a six-block radius,” many of whom actually live in the LPM Building, he notes — to ignore.
Though Lakes & Legends will have plenty of Belgian- and farmhouse-style offerings, Applen and Taylor aren’t style-exclusive. According to Applen, they’re happy to brew anything that fits their “farm-to-bottle” philosophy, sourcing local hops, malts and other ingredients whenever possible.
“One of the reasons we chose [MSP] over another city is that, once you get outside the built-up area, there’s a tremendously strong agricultural tradition here,” says Applen. “That makes the farm-to-bottle approach easier.”
Lakes & Legends’ rustic ties will be on full display in the 3,500-square-foot taproom, which Applen describes as an “urban farmhouse” with earthy décor and regular live music.
Bryn Mawr Brewing Company
Slated for a winter (early 2016) opening, Bryn Mawr Brewing is one of the more ambitious breweries to hit MSP of late. The brewery’s leadership team just signed a final lease on an 18,000-square-foot space in the new @Glenwood complex near Theodore Wirth Park, where it’ll abut a three- or four-story office building, revitalized Bassett Creek waterfront, and (eventually) a rehabilitated Fruen Mill with restaurant, retail and housing components. The taproom and patio should sit at least 200 people, though plans are still being finalized.
Bryn Mawr caters to a niche that’s sorely underserved by local craft breweries: local sports enthusiasts, from cyclists and Nordic skiers to club rugby and soccer players. As co-founder Dan Justesen told The Line recently, “We’re surrounded by parks and recreation amenities here,” including Wirth Park and sports-friendly Bryn Mawr Meadows Park, so it makes sense to be a hub for active drinkers.
Bryn Mawr has a specific beer niche in mind, too: European-style beers, led by a “sessionable” flagship called Utepils. Justesen, who cut his chops as owner of Vine Park Brewing Company in St. Paul, sees value in accessible, refreshing styles that attract casual drinkers and lack the strong flavors or high alcohol levels of more experimental beers.
Bryn Mawr’s big plans are costly: The brewery recently announced an equity crowdfunding round, limited to accredited investors, which aims to raise $1.25 million this fall. For those who can’t invest directly, Bryn Mawr is also offering “free first beers for life,” brewery swag, purchase credits and other goodies through its VIPer program, which costs $1,000 per individual and $1,900 per couple.
Lake Monster Brewing
St. Paul’s Lake Monster Brewing, opening this October near the Green Line’s Raymond Station, technically isn’t a new brewery. But the outfit hasn’t had a proper home since it first began selling beer in late 2013. Instead, owner Matthew Zanetti has worked with a local contract brewer to get his beer on store shelves across MSP.
“Contract brewing worked for a while, but our production capacity was severely limited” due to competition for tank space, says Zanetti. “Having our own space will boost our capacity many times over.”
Zanetti expects Lake Monster’s pilsners and IPAs to appeal to ab road cross-section of casual drinkers, with seasonals (like a fresh-hopped ale made with hops grown in Wisconsin) attracting more experienced enthusiasts.
But Lake Monster’s brewery/taproom is the main attraction and the brewery’s insurance against future craft beer downturns. Housed in a 100-year-old, red-brick railroad exchange warehouse on Vandalia Avenue, the 10,000-square-foot, truss-framed space is “completely open,” says Zanetti.
“The taproom and brewery are literally separated by a high-top drink rail and nothing else,” he adds. “We had to knock down a couple walls to achieve the effect.”
Including seating in the two outdoor patios flanking the space, Lake Monster can fit about 340 patrons. And the 175-space parking lot is a luxury that many neighborhood taprooms can’t afford.
“We’re three blocks from the Green Line, seconds from I-94, and right around the corner from the [neighborhood favorite] Dubliner Pub,” says Zanetti. “It’s hard to get more convenient than that.”
Modist Brewing
If Bryn Mawr Brewing epitomizes fealty to European-style purity, the North Loop’s soon-to-be-open Modist Brewing (pronounced “modest”) strives for the exact opposite effect.
“Modist is a brand, a mentality, a lifestyle,” says Keegan Knee, head brewer and co-founder. “We don’t feel obligated to stick to the traditional style guidelines” that hamper other breweries.
“We want to make beers you haven’t had before,” he adds.
Perhaps wisely, Modist is pairing its eclectic approach with an intense program of patron education. Part of its taproom will be set aside for informal chats, seminars and demonstrations, with regular tours during open hours.
“[Beer] education is really important to us,” says co-founder Eric Paredes. “Beer is more approachable and less snobby than wine, but it’s still intimidating to casual drinkers. We want people to feel comfortable with our product.”
Some six years in the making, Modist is a collaboration between four friends and business partners: Knee, who previously brewed at Dangerous Man Brewing Company in Northeast Minneapolis; Paredes, a native Californian who cut his chops in the wine industry; Kale Anderson, the brewery’s business and operations specialist; and John Donnelly, a down-to-earth sales guru.
Modist’s North Loop location, about two blocks from Target Field and Fulton Brewing, is prime real estate these days. And like Bryn Mawr, the brewery is going big from the get-go: According to a Minnesota Business Journal report, investors are sinking at least $1 million into the place. The four co-founders say they’re on track for a December opening.
Are We Approaching Peak Craft Beer?
Each new or expanded MSP brewery has an ambitious, creative growth plan and a distinct niche to fill. While Applen’s admittedly self-serving research indicates that MSP has yet to hit peak craft beer, local industry wags note a shift in the past year, and acknowledge that breweries lacking a superior product or defensible niche face a real risk of failure.
Scott Ebert, a Minneapolis-based Baker Tilly partner who works closely with craft breweries and beer distributors, sees several signs of a temporary peak in the craft beer boom, or at least of a craft beer scene less hospitable to upstart breweries.
For starters, “[t]he big boys” — macrobrew conglomerates — “are starting to get into the craft beer segment,” through acquisitions, he says. Though MSP hasn’t seen a high-profile buyout, big companies are encroaching: Anheuser-Busch InBev purchased all of Chicago-based Goose Island Brewery’s outstanding shares in 2011. Belgian conglomerate Duvel recently bought out Kansas City-based Boulevard Brewing Company. Summit, Surly and other bigger MSP breweries could eventually be takeover targets, though Ebert doesn’t see that happening in the near-term.
More troublingly, Ebert sees the conglomerates pushing local alcohol distributors toward exclusive distribution deals, which were the norm until recently. Exclusive deals limit how much “outside product” — often from independent craft breweries — distributors can carry. For instance, Anheuser-Busch InBev might require an exclusive distributor to purchase at least 25 percent of its total inventory from Anheuser-Busch InBev.
Distributors don’t mind exclusive deals, notes Ebert, because drinkers have “very little brand loyalty to specific breweries in the craft segment,” he says. “They’d rather buy four six-packs from four different breweries than four six-packs from the same brewery.” By contrast, macrobrew drinkers tend to stick with a specific label, like Coors Light or Miller High Life, enabling distributors to better predict sales volumes and revenues.
Even non-exclusive distributors are pickier about what beer styles and brands they carry, says Ebert. “We’re seeing distributors wary of carrying ‘out-there’ and experimental styles,” due to concerns about the product’s appeal, he says. “Distributors are increasingly saying, ‘Keep those eight rotating styles and give me your two flagship beers’” — typically accessible styles like pilsner, India pale ale or American pale ale.
Ultimately, Ebert sees two paths to success for members of MSP’s current craft brewery crop. Larger, more established breweries — Summit, Surly, Fulton, Indeed — will thrive thanks to name recognition, quality (and predictable) products, and ample brewing operations that allow for multi-state distribution. According to Ebert, these breweries’ strengths play to “casual craft drinkers,” the folks who don’t rush out to try every new beer that hits the street.
Smaller, less established breweries can differentiate themselves with inviting, neighborhood-style taprooms and niche-oriented approaches to brewing and hospitality, says Ebert, as most of the newcomers profiled here plan to do. While this isn’t a recipe for breakneck growth, the predictable crowds at even modest-sized MSP taprooms attest to brisk demand for welcoming spaces that serve quality beer.
A Third Way for Local Craft Brewers?
MSP’s craft brewers may have a third, yet-untested, outlet for their product: “super-taprooms,” or drinking establishments dedicated exclusively to craft beer. For instance, Community Keg House, a soon-to-open super-taproom in Minneapolis’ Northeast Arts District, plans to devote 16 tap lines to locally produced craft beer. Patrons sample different styles in tasting glasses, then take their own pint glasses to a supervised “pouring room” arranged by theme or style: “fall beers,” “stouts and porters,” and so on.
To the extent possible, Community Keg House plans to be hyper-local. “We want to be the hub for all things Northeast [Minneapolis], at least when it comes to beer,” says co-founder Nate Field. Whenever Community Keg House can’t source enough product from within easy walking or biking distance, it’ll add brews from metro MSP and outstate Minnesota to the mix.
As a macrobrew-free zone, Community Keg House “is the perfect place to bring that craft beer-loving friend from out of town,” says Field. And with so many local beers on tap, Field’s taproom should serve as an easily accessible hub for local enthusiasts to find out (and taste) what’s new on the scene, without trekking to multiple taprooms or agonizing in front of the local beer store’s cooler.
Though Community Keg House can’t singlehandedly support every MSP brewery, the “super-taproom” concept can likely be applied to other brewery-friendly parts of town: Midway and St. Anthony Park in St. Paul, downtown and the North Loop in Minneapolis. A proliferation of such craft beer clearinghouses could prolong MSP’s craft beer boom — even if locally made pilsners and pale ales come to dominate the tap lines.
Brian Martucci is The Line’s Innovation and Jobs News Editor.
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