Breweries Are Taking Over

Whenever the topic of breweries is brought up, I always hear "when are we going to finally over saturate the market with breweries?" While it may seem like there are a lot, the market share of local craft beer sold pales in comparison to national conglomerates. Only 12 percent of the market is craft beer with two companies holding 50% of the total beer market. There are two factors that have spurred the rise in local breweries over the last decade though: consumer taste and government regulation.

After the end of prohibition, lawmakers wanted to ensure there was a separation in the production and sale of beer because up until that time, taprooms were considered seedy places that encouraged vices like gambling and illegal business. The regulations put in place discouraged small breweries and gave the power to large production companies like Budweiser and Miller. Over the years the general attitude towards beer production changed and in 1979 Jimmy Carter deregulated the industry. This allowed craft breweries to break into the market.

While craft breweries started to rise, they were limited primarily to west coast cities in part because of state regulations. In Minnesota for example, brewers still could not sell beer at the same place they produced it. That regulation was not lifted until 2011 with the famous Surley Bill. After Surly established themselves, dozens of other breweries followed suit, with many of them collecting in Northeast, Minneapolis. The more frequented establishments are usually found within a neighborhood, just off the major roads. They succeed because they are within a short walk or bike ride from hundreds of households. They do not advertise like their large competitors so they rely on nearby populations to spread the word. These small businesses often put all their funding into getting the brewery up and running, so they need to be profitable on day one.

Some of the breweries have scaled to larger markets like Surly who produces 90,000 barrels a year (2.8 millions gallons of beer) while others like Dangerous Man only put out about 2,000 barrels annually. The difference is whether they want to take up the additional cost to break into distribution. Companies have to be able to sell beer to retailers, restaurants, and bars. It takes time to go out and gain customers and to set up a system of bottling and shipping as well. Not all breweries want the added stress or risk. 

 Dangerous Man Brewing, giving new life to an old bank building in Northeast

Dangerous Man Brewing, giving new life to an old bank building in Northeast

It is easy to understand why some want to focus on running a success tap room instead. Every time we go to Dangerous Man, whether its Friday night or Sunday afternoon, it is filled with people. They are there because it is the only place to buy their beer, but more so because the space is inviting and fun to hang out with friends while having a drink. A cultural shift has taken place with the growth of breweries. Whereas bars are not a welcome place for parents with kids, breweries are. They also encourage you to hang out for hours and talk similar to a coffee shop, while bars are more focused on drinking.

 Outdoor patio space at Bauhaus Brew Labs welcoming adults, kids, and dogs in the summer time

Outdoor patio space at Bauhaus Brew Labs welcoming adults, kids, and dogs in the summer time

Another interesting trend is that many breweries are in walkable/bikeable areas. Many of their employees live within a short walk to work. About 75 percent of Dangerous Man employees live within a 2.5 mile radius of the brewery. To encourage biking to work or to visit the brewery, many businesses are adding bike racks. The companies are also very community oriented, giving back in volunteer hours and free beer. Many will help with events in their neighborhood including clean up days or water awareness campaigns and offer a free beers to those that came out to help.

 The signed canoe raising awareness for the Boundary Waters Canoe Area, hanging in the Northgate Brewery

The signed canoe raising awareness for the Boundary Waters Canoe Area, hanging in the Northgate Brewery

The rise in craft breweries may seem drastic, but there are still only 6,000 nationally (about 120 in Minnesota). They are institutions that give back to their communities and offer up inviting spaces to meet and drink a good beer, kombucha, or cold press coffee. They bring their passion and excitement for creating a good product that is not mass produced for excessive consumption. They are changing the physical make up of our cities and the social function of our residents. Whether we have reached the breaking point is still up for debate, but for the time being, we have craft beer to drink while pondering the question.