Brewery Updates in Minnesota (2019)

A few images from Lake of the Woods Brewing Company's remodel progress!

https://www.facebook.com/lowbrewcoMN

 

I agree with your thoughts on the quality of Badger Hill and them being underrated, unheralded, however you want to put it. I hope their product does not suffer with the changes.

 

Found this article pertaining to Schram Haus in Chaska.
https://www.swnewsmedia.com/chaska_...cle_c84c8c03-1d1a-5e11-bfeb-ae5e74dba364.html

Looking to open in April or May. I guess all the utility improvements were done last year.

 

Timmy is there, Brett is there. Is the CPA 3rd owner out? Todd Tibesar I believe?

 

I heard Brett was pushed out from being involved with daily operations but take that with a grain of salt, I don't know any of the guys personally just what I heard. I was looking for more info or confirmation here.

 

Damn, son, that’s cold! Colder than a Minnesota winter. And here I thought I was the most cynical geezer on this board!

On the other hand, I feel where you’re coming from. And past miss-steps or not, I can very easily wish them “good luck”, here, when it comes to their revitalization efforts while at the same time having no intention of becoming a regular buyer of their beer.

And that’s the problem with gauging public opinion based on a specialised hobbyist forum like this one.

 

It's an increasingly competitive industry, approaching (although still not having reached) what the restaurant and bar business has been for many years. Restaurants and bars come and go all the time, yet few people talk about the market being saturated or call anyone looking to open a restaurant or a bar foolish. Yes, fixed costs are higher for taprooms, but so are margins.

For many current and prospective brewery owners (I'm talking mostly about the owners who don't also brew), profit is a secondary consideration. A lot of them hold only a fairly small portion of equity, keep their day jobs, get to act like bigwigs at the brewery and industry events, network with industry contacts and participate as insiders in the craft beer scene, impress their friends, brag about owning their respective breweries at parties, and cross their fingers that they don't lose their shirts on their investments. They're seeking psychic returns at least as much as financial returns in many cases. With rare exceptions (such as Dangerous Man, probably), you're not going to get rich with the taproom model, but the vast majority of taproom-oriented breweries eke out enough profit or suffer small enough losses humbly to chug along for years and years.

I truly don't think the public is suddenly going to lose interest in taprooms except possibly in core urban areas that are more subject to the whims of fashion and for breweries that depend on trendy styles. But we're talking about Scott County, where the breweries are as unhip as the residents (that's, if anything, a compliment), and that makes them more robust to a shifting of the cultural winds. Taprooms function for many people as improvements on the neighborhood bar, and craft beer as an improvement on flavorless macro lagers, and those newly discovered consumer preferences are unlikely to disappear any time soon (whereas the scenester social aspect that buoys some urban taprooms might).

So I think all of the Scott County breweries can survive, in the sense that there's adequate demand to support the basic business model. The one I'd be most worried about is your favorite, Badger Hill, for general reasons that I'll discuss shortly. I don't think Scott County is close to saturated, let alone oversaturated, with taprooms; I suspect it has a pretty typical number of breweries per capita compared to what most suburban and exurban parts of the country have in 2019, and I think there's still a lot of room for small, non-distribution-oriented breweries to set up shop with mild to moderate success. Obviously, individual businesses can be mismanaged or experience unexpected problems that will take them under, but those are idiosyncratic, not systemic, issues.

Larger craft breweries that must compete for shelf space and tap lines at bars for a large majority of their revenue, in contrast, are taking on a heck of a lot more risk and generally are much more vulnerable to swings in market preferences. Certainly we see a greater portion of the distribution-oriented breweries flaming out, at least in Minnesota (on the flip side, there's more financial upside for ownership if things go well).

It's really hard to justify the huge fixed cost outlays and, in most cases, accompanying debt to open or massively expand a large, distribution-oriented brewery without what I consider to be excessively rosy growth projections. I've spoken candidly to brewery owners looking to start big or massively expand, and, in almost every case, I've heard them spout unrealistic optimism about the state and future of craft beer and overconfidence in their beer and personal business skills (often coupled with a disdain for what they consider to be suckers who seek to stay small), much more so from what I hear from most owners of near-nanobreweries, who often are grounded, practical, and realistic. Also, there's already a ton of excess capacity out there. I really wouldn't want to depend on distribution for a large majority of brewing company revenue in 2019, but, if I did, I'd be looking first at contract brewers and alternating proprietorship possibilities, and, if I ruled those out, that'd be it; I certainly wouldn't be looking into setting up a 50-barrel system of my own. That's the road to perdition.

I too have talked to a lot of brewery owners and studied these issues from a business standpoint (in part because I've considered, but to date not engaged in, investment "opportunities" in breweries), and I've come to what seems to be the opposite conclusion from you: If you insist on starting a brewery, it's best from a risk-adjusted expected total returns standpoint to keep it small and taproom-focused (and not in the city limits of Minneapolis or St. Paul). Furthermore, I think the net advantages of the taproom-oriented model grow compared to those of the distribution-oriented model with each passing year.

 

Just read the article this morning & found it very interesting indeed.

I am one of the people they spoke of: I made three visits within the first year plus of 612 opening, & the very, very best beer that I had was mediocre. Most were downright bad, & on one visit I couldn't tell the difference between the "rye" & "amber" ales. So many problems.

That said, the better part of valor might just be keeping your mouth shut about the past ("YEAH! We made bad beer for years, but hey, we had to keep the lights on, so...") & instead try to trumpet changes you're making. Reading that these knuckleheads were KNOWINGLY serving bad beer makes me feel even less charitable towards 612, if that's possible.

 

I can understand money problems when a brewery is starting and struggling to decide if they can afford to dump bad beer. 612 knowingly kept selling bad beer for a long period of time and now 6 years later wants another chance saying they are as good as any brewery? I had 612 beers many years ago and thought they were terrible. I’m not going back to try them ever. Too many great MN breweries today to give my money to.

I read the 612 article and couldn’t stop laughing when the owners wanted credit as MN craft beer pioneers (wow 6 whole years!), for being a big part of the Surly bill and for inspiring MN craft breweries such as being influenced by 612’s taproom (like similar taprooms didn’t exist anywhere else in the country). 612 says they “paved the way for 90% of the breweries out there.” Give me a break! I’m very happy so many breweries haven’t been heavily influenced by or followed the methods of 612.

 

I call BS on 612 improving anything, POS brewery that tried to capitalize on location and marketing. I remember stopping there during art-a-whirl back in their beginning, spilling my beer and dealing with an insane amount of stickyness from the residual sugars. I wonder if they still brew using primarily extract....

 

But their beers are banging though......

 

Where did you hear they brew, or brewed their beer primarily with extract?

 

You guys can't take selfies. lol

 

Not sure if it's true but I heard years ago 612's original equipment had some bad welding issues, which lead to the beer being bad? Like the brewery was from China or something? Not sure if thats the case but in the article they mention they bought a new brewery so maybe its true?

 

That is true. Their old system was a pos.

 

Is 612 the worst brewery in MN? Most of their beers have tasted like bad home brew.

 

I've visited 612Brew twice in the past three years or so, and, both times, the beer was notably better than it was in the brewery's early days, when the brewery and its taproom were, by the grace of a forgiving public in an immature taproom market along with a for-its-time impressive venue and some savvy marketing, at their most popular. If anything, I'd call the beer in recent years slightly above average. 612Brew still suffers from a lack of variety, and that deficiency, combined with fairly high prices, a moribund taproom atmosphere since the brewery has been largely abandoned by its original clientele, and tough nearby competition, but not the quality of the beer in its own right, are why my visits are so infrequent. I hope the taproom renovations inject some life back into the place, and I hope that the owners truly have shifted from their original, stifling approach in which the beer itself seemed to be an afterthought.

In other news...

TPT's Almanac has discovered the post-Surly-Bill-era taproom phenomenon in Minnesota, so expect an influx of tonily dressed retirees from Linden Hills and Highland Park in your favorite taproom soon.

https://www.facebook.com/video.php?v=10155627559912493

It appears that Drastic Measures Brewing in Wadena has started brewing.

https://www.facebook.com/video.php?v=761095910928982

Forbidden Barrel Brewing in Okabena is "hoping for an early August grand opening!"

https://www.facebook.com/video.php?v=353188208618830

 

Not by far, try U4ic.

 

I see your U4ic and raise you a Maple Island.