Raise a glass to deregulating the beer industry | Review

New book traces path of Minnesota’s craft brew industry and makes case for regulatory reform

January 22, 2021 6:00 am

The pandemic continues to strip Minnesotans of health, happiness and many of the forms of social cohesion that we and our neighbors take for granted. That’s why the latest release from the Minnesota Historical Society Press is a breath of fresh air or, rather, a sip of freshly brewed beer.

Pints North by Katelyn Regenscheid details the ascendance of Minnesota’s craft beer industry by taking her readers deep inside 16 of the finest breweries in the state. (Disclosure: The author is a college classmate of Regenscheid.)

The profiles of the breweries — and often the brewers and owners themselves — are replete with wisdom, witticisms and zeal. The author astutely captures the appeal of this “third place” in Minnesota’s community culture, capturing that location outside of home and work that “function[s] as a gathering hub for folks from a range of social groups; the environment is easygoing and welcoming and the taproom is a comfortable space to pass some time in convivial joy.” It’s truly affecting in a time when so many of us are confined to our homes to keep COVID-19 at bay.

There is, however, a through line to the book that deserves attention from Minnesota’s policy and political community: the inexorable power of big beer and their distributors in Minnesota.

Early in her book, Regenscheid lays out a timeline of the rise of Minnesota’s modern craft brew industry. Many existing restrictions stemmed from Minnesota’s temperance movement and its vestigial laws. Homebrewing was only legalized in 1987; brewpubs (small breweries that are also restaurants) were only allowed to sell growlers in 2003; and taprooms serving their adjacent brewery’s creations were only allowed in 2011 by the so-called “Surly Bill.”

Restrictions remain. As Regenscheid writes, the taproom law was followed by a handful of limitations: “Brewers can have only one taproom in Minnesota; they may not exceed 250,000 barrels per year; and brewers may not sell any alcoholic beverages that were not brewed on-site.” Especially during the pandemic, when taprooms have been (rightly) restricted to few patrons, these limitations are inhibiting a still-nascent sector of our economy. The author expertly lays out the history (and inadequacies) of the “three-tier system” in Minnesota — brewers, beer distributors, and retailers.

But the legs on this stool are crooked.

The manufacturers, wholesalers and suppliers who move and provide most of the state’s liquor stores, bars and restaurants with the liquid gold hold huge amounts of power in this system. The three-tier system was created in the early 20th century to balance distributors’ influence with the power of the largest brewers at the time, such as Hamm’s, Grain Belt, Miller and others that have since been subsumed into large, multinational companies. 

The system simply doesn’t make as much sense in a world where 196 — as of 2019 — craft breweries are attempting to break into a market where fridge space, word-of-mouth and tap handle slots are key. Yesterday’s story was balancing the power of companies producing middle-of-the-road lagers. Today’s story is one of innovation, growth and consumer choice.

Many of the stories Regenscheid tells are of Minnesota’s most popular breweries wrestling with these restrictions. Lupulin Brewing Company in Big Lake, for instance, sought to open a second brewery in the state. The Legislature — in a surprising, bipartisan manner — has made it clear that that’s a no-no. Minnesota was the company’s first choice, but now Sioux Falls gets to enjoy this destination taproom. Indeed Brewing Company in Northeast Minneapolis found itself in a similar predicament and chose (gasp) to build a second taproom in Brew City (aka Milwaukee).

The pandemic has upended every element of our economy this year. With funding fights and misinformation about the kinds of relief small businesses are receiving across the state, it is hard to gain consensus. Breweries offer a rare glimpse of hope. Nearly every community in the state, from Forager Brewery in Rochester to Portage Brewing Company in Walker to Big Wood Brewing in White Bear Lake to LTD Brewing in Hopkins are touched by this special “third place.” Legislators would do well to heed the power of their local community institutions by loosening the remnants of Prohibition-era bindings on this thriving industry. Removing the growler cap, allowing the sale of 4- and 6- packs in the brewery, allowing multiple taprooms within the state, and many other policies can unleash creativity and further innovation. 

Not to mention the possibility of delicious new beer.

Pints North by Katelyn Regenscheid is published by the Minnesota Historical Society Press and is available at your local bookstore for order and/or purchase.

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Nick Stumo-Langer
Nick Stumo-Langer

Nick Stumo-Langer is a recent master of public policy graduate from the Humphrey School of Public Affairs. He is a passionate policy professional interested in equity and strong, local economies.