New bills in the Minnesota legislature could potentially be of great significance to the sales and operations of breweries all around the state.

The Drink Local Economic Recovery Package and the #FreeTheGrowler proposal introduced by Rep. Jim Nash (R-Waconia) present legislation that would change various Minnesota liquor laws.

With the growth of the Minnesota craft beer industry, the state raised the cap on the sale of growlers in 2013 to breweries that surpass an annual production clip of 20,000 barrels. This law, which has not been revisited since, is an effort to protect liquor stores and other various beverage distributors with the notion that the sale of growlers at breweries and taprooms takes away from their sales.

Five Minnesota breweries have since met this 20,000 barrel limit and are now prohibited from selling growlers: Summit Brewing Company, Surly Brewing Company, Schell’s Brewery, Fulton Brewing and Castle Danger Brewing.

Lon Larson, vice president and co-owner of Castle Danger Brewing, said Castle Danger reached the 20,000 barrel limit in 2019, resulting in a 30% loss in sales. Their struggles deepened when their taproom was forced to close its doors twice due to the pandemic.

Since its founding in 2011, Castle Danger and its hometown of Two Harbors have seen a measurable level of success.

“Part of that success story has been driven by the growth of the craft brewing industry, and specifically, I would make a case that growlers are a big part of that,” Larson said. “90% of our visitors are tourists … the growler allows an opportunity for people to buy a souvenir, take something with them … that really created the opportunity for exposure, and that exposure is really what helped lead a small-town brewery to be the fifth largest in the state.”

Pepin Young, taproom manager at Bent Paddle Brewing Co. in Duluth, talked about his perspective on the growler ban, and the broader Drink Local Economic Recovery Package.

A Bent Paddle pilsener lager. Photo by Michael King

“If the ban were to go into effect today (for Bent Paddle), we would stand to lose $275,000 in sales over this year,” Young said. “Everybody should get something out of a change like this … I think it’s important that whatever comes across … that it doesn’t negatively impact anybody.”

The Drink Local Economic Recovery Package includes several amendments to Minnesota liquor laws to ideally benefit all facets of the liquor industry. These changes include permanent sell-to-go alcohol rights for restaurants, and allowing on-site sale of full-size bottles at distilleries.

Young stated his strong support for Bent Paddle’s business partners, citing that 50% of Bent Paddle’s business goes through bars and restaurants.

“We’ve always tried to do as much as we can to make our product accessible and easy to navigate for our wholesale partners,” Young said. “We hope that our partners would see the ability to sell crowlers and growlers at wholesale locations.”

He also stated that the Drink Local Economic Recovery Package has the support of several relevant organizations such as the Minnesota Farm Winery Association and the Minnesota Restaurant Association.

Larson laid out the three main groups, or the “three tier system,” of the supplier, distributor and retailer, and where the opposition of the #FreeTheGrowler bill lies.

“The opposition to basically any change in the liquor store industry comes from the group called the Liquor Coalition,” Larson said.

A stocked warehouse at Bernick’s of Duluth, a local beverage distributor. Photo courtesy of Bernick’s of Duluth

The Liquor Coalition includes the distributor and retailer entities of the three-tier system, the distributors in opposition being the teamsters.

“The teamsters, I struggle to see why they feel that they have a dog in the fight,” Larson said. “Only a few of the distributors have teamsters. The vast majority don’t.”

The entity of opposition in the retailer entity of the three-tier system is the Minnesota Licensed Beverage Association (MLBA).

“Minnesota is behind the times in beer laws,” Larson said. “Minnesota is behind every other state.”

Despite any political involvement, Larson stressed Castle Danger’s undying commitment to their partners.

“We wholly support our business partners of distributors and retailers, and will always go the extra mile to ensure their success,” Larson said.

The MLBA was unavailable for comment on the situation.

“I asked multiple liquor store owners if they’d be willing to do an interview with [The Bark], and they said ‘Lon, I don’t care if you sell growlers, but I will not go on the record,’” Larson said.

If the passing of liquor legislation in the past is any indication, the state is in for a long, arduous process.

“I’m cautiously optimistic that we’ll see some movement this year,” Larson said. “I support the broader issue, but there’s so many moving parts. In liquor, nothing moves fast.”

Young shared his feelings on the possibility of things not going their way.

“It’s important that if we don’t see change through this legislature that we don’t close the door,” Young said.

#FreeTheGrowler, other relief legislation await progress in Minnesota legislature