The High Price of Success for Some Minnesota Breweries is a Halt in Growler Sales

There’s a bittersweet problem facing the up-and-coming breweries of Minnesota. According to state law, if a brewer passes the annual production mark of 20,000 beer barrels, the sale of growlers must cease.

The ruling is a result of Minnesota’s strict liquor laws and is in place to protect retailers. But why is this such a big deal? Growlers – big jugs that you continuously refill with beer – can make up for a large percentage of taproom sales at a brewery.

According to the Minnesota Department of Revenue, Indeed and Bent Paddle will soon have to figure out how to navigate this revenue shift. Those businesses are at 15,835 and 15,000 annual barrels respectively. However, there’s one brewer who recently broke the 20,000 production mark: Castle Danger.

For this Two Harbors-based business, growlers were an essential part of their culture when first getting off the ground. But this law will strip that away. And it’s a big deal, since growlers made up for 30 percent of the brewery’s revenue, according to their marketing and events manager, Maddy Stewart.

So why enforce such a law? Well, the logic used by most lawmakers is that when consumers are getting their beer via growlers at a brewery, there are fears that retail products take a hit. It’s an unfortunate scenario, especially since jobs can be lost due to the cessation of growler sales. In fact, Stewart confirmed that a few part-time positions and one full-time position would be lost.

It’s an awkward growth stage for craft brewers: reach an impressive milestone, only to have the business take a hit as a result.

Lawmakers have tried to increase this limit as a way to give breweries more time to prepare. Senator Karin Housley proposed to double the 20,000 amount but was met with challenges from Commerce Committee members, namely chairman Gary Dahms. Again, the logic is that preserving the current cap retains the structure of a three-tiered distribution system: producers, distributors and retailers.

Until a solution is found, other local breweries will have to prepare and strategize as they near the 20,000 mark themselves.

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