Beer here: Taproom boom takes root across Minnesota

Lupulin Brewing couldn't boast a hot location or a ready-made clientele when it opened in 2015 in a nondescript building off U.S. Highway 10 in Big Lake, Minn. But co-founder Jeff Zierdt knew beer — and he had a plan.

Lupulin started brewing what Zierdt calls "approachable" beers to lure big-brand beer drinkers into the world of hops-heavy IPAs and other craft brews. Locals began showing up, as did Twin Cities folks passing through the area on Interstate 94 or Highway 10 on their way to and from lake cabins or resorts.

The result: In four years, Lupulin went from one full-time employee and a few part-timers making 330 barrels their first year to 15 full-time workers and more than 30 part-timers making 3,200 barrels last year. A new $4 million capital plan will help build "a whole new brew house in order to start growing further outside the Minneapolis metro with our distribution," said Zierdt.

Chalk up Lupulin as part of a Minnesota business boom that few likely predicted in 2011 when lawmakers OK'd the "Surly bill," creating a taproom license in Minnesota and letting small breweries make and sell their wares on site. It's led to taprooms and craft breweries opening around the state from Austin to Duluth, driving business and building community ties in urban neighborhoods and in small-town Minnesota.

Before the Surly bill — named for the Minneapolis craft brewery that pushed for the changes — the state issued one or two microbrewery licenses a year. In 2017, the state issued 34, according to data from the Minnesota Department of Public Safety. Now Minnesota has 172 active breweries, most of them microbreweries.

Not all are succeeding, and some in the business have begun to worry about too much beer chasing not enough beer drinkers. Overall, though, it's a good time to be in brew.

The brewing and taproom market in the Twin Cities metro area has yet to reach that of other cities like Portland, Ore., and Denver, said Mike Corneille, co-founder of Pryes Brewing in north Minneapolis. "They have far more breweries per capita," Corneille said of those other cities. "They have far more breweries in their metro areas. And far more breweries in their urban centers."

And those breweries are creating some interesting kinds of beers.

Recently, on one of the first decent patio days of the spring, Mike Kelly sat at a picnic table behind Fair State Brewing Cooperative's taproom in northeast Minneapolis. In front of him was a golden-hued, slightly cloudy short glass of beer.

"I think they call it the Pina Joe-Lada," said Kelly. "It's got a coconut-pina colada type of — it's like a coconut finish to it. It's very, very subtle. It is delicious."

Like many brewery owners, Fair State co-founder Evan Sallee started by making beer at home.

"Pretty much the first time you make a beer that isn't really, really bad, all of your friends tell you to start a brewery," he said. "That's maybe not the best idea. So, we always felt like we needed something more."

Sallee and two friends started Fair State as a co-op in 2013. The taproom opened in 2014. Sallee says the co-op is that "something more" which helps distinguish the brewery from others.

It works kind of like a grocery co-op. Fair State has more than 1,500 owner members who, among other things, elect the board of directors. Members also receive shares of profits which are based on how much they spend in the taproom.

Fair State is one of about a dozen taprooms in northeast Minneapolis. Sallee says the market isn't saturated, but it is "saturating."

"As we see all these new entrants into the field and as everyone has just been growing, extremely rapidly it's continually more difficult to get your message out there and to differentiate yourself among the crowd," he said.

U.S. Census data show that between 2012 and 2016 the number of breweries in the United States grew from 880 to 2,802. Of that total, 2,605 breweries had under 50 employees. During that period, the number of craft breweries in Minnesota surpassed that of Wisconsin, although Wisconsin still produces more beer annually.

"We've been on such a high for so long that when one brewery closes, it's a little bit shocking," said Lauren Bennett McGinty, executive director of the Minnesota Craft Brewers Guild. "But I think that is just going to be part of the natural trend of the industry. But I don't know that it necessarily negatively impacts the growth right now."

Correction (May 17, 2019): An earlier version of this story misspelled Mike Corneille's last name.