It all started with the "Surly bill" a decade ago, so called for the brewery that waged a relentless fight to loosen Minnesota's archaic liquor laws and allow breweries to sell their beer on-site in taprooms.
It came only after Brooklyn Center-based Surly Brewing Co. — backed by ardent consumers called "Surly Nation" in a battle against the powerful Minnesota Licensed Beverage Association — launched plans for the $20 million brewery/restaurant/entertainment center eventually built in Minneapolis.
In the years that followed, the craft beer scene exploded, birthing breweries from one end of this state to the other and breathing new life into old warehouses and other sites that had long struggled to find fresh purpose.
Now, some of the most successful breweries in the state face another struggle, one unlike those faced by similar operations in 49 other states. The same forces that fought against taprooms are fighting to keep in place an arbitrary limit on the number of growlers — the glass jugs used to briefly keep fresh beer — that can be sold. Once a brewery sells 20,000 barrels in a year, their reward for success is that they can no longer sell growlers to go in their taprooms. No other state has such a severe limit. The cap in neighboring Wisconsin is 300,000.
Rep. Jim Nash, R-Waconia, is sponsoring a "Free the Growler" bill that would lift the limit. It has bipartisan support, as does a companion bill in the Senate. But the bills have gotten a cold shoulder from key committee chairs, who have not given the bills so much as a hearing. Wisconsin has a similar structure for liquor sales and distribution, Nash said, but without such tight restrictions. "They've shown the whole system can thrive," Nash said. "We can, too."
Castle Danger Brewery started out brewing 100 barrels in a Two Harbors garage. From there, it has become one of the best known brands in the state, so successful that the brewery hit its cap in 2019. Taproom revenue fell 30% with the loss of growler sales, and that was before the pandemic hit.
Sales to bars and restaurants make up more than half of Castle Danger's total revenue. The additional loss of growler sales triggered layoffs, co-owner Lon Larson told an editorial writer. Then COVID-19 restrictions were put in place. "We're not looking for a handout," Larson said. "All we want from the state is to lift the cap so we can sell our beer to our customers in our own taproom."
Of the 8,400 craft breweries across the country, only five are unable to sell growlers because of state limits — and all of them are in Minnesota. They are Castle Danger, Fulton, Summit, Schell's and Surly.
Stillwater-based Lift Bridge is planning an expansion, but across the river in New Richmond, Wis. The cap isn't the only reason, but Lift Bridge is mindful that it is approaching the limit and wants to sell at least 23,000 barrels. Those jobs will now go to Wisconsin. Tattersall Distilling is planning a destination distillery and event center, but it will be in River Falls, Wis. Tattersall was about to hit a cap imposed on distillers.
Castle Danger's Larson said he calculates total growler sales at 1/20th of 1% of all beer sales. They add some income for taprooms, he said, serve as an innovative way to test out new flavors, and provide a convenience to customers, who like to leave with a souvenir of their favorite beer.
"Aren't we supposed to believe in competition?" said Sen. Sandy Pappas, DFL-St. Paul, who was around for the original fight over taprooms. "Growler sales don't threaten anyone. Why are we penalizing successful craft breweries?" Nash and Pappas both say they believe they have the votes — if the bills could manage to get to the floor.
Minnesota's archaic liquor laws are costing this state jobs and economic activity. Lifting the cap doesn't cost the state money, and it would help brewers that have taken an economic beating get back on their feet.