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The Impact of the Craft Brewing Industry in Greater Minnesota

Updated: Jul 23, 2020

Photo credit: Arri Velasco

It's no secret that craft beer has become increasingly popular in recent years. Creative beers from breweries throughout the U.S. can be found gracing liquor store shelves and bar taps nationwide. Minnesota is no stranger to craft brews. Whether it's Fergus Falls, Duluth, or the Twin Cities, the craft brewing industry is making its mark on Minnesota with a variety of breweries and taprooms. With breweries continuing to pop up, some seemingly overnight at times, the industry has had a pretty major impact on both the U.S and Minnesota economy.

What Qualifies as Craft?

It’s important to note that not just any beer can be labeled as "craft." There are three main requirements a brewery must satisfy to be considered as such. To put it simply, a brewery is qualified if it is small, independent, and traditional. DEED explains these requirements in more detail, stating, “A brewery qualifies as ‘small’ if it brews fewer than 6 million barrels of beer a year and ‘independent’ if no less than 75 percent of the business is owned by a craft brewing company. A craft brewery is considered ‘traditional’ if it has an all-malt flagship beer or if 50 percent of its total volume is in all-malt beers.

The Brewer's Association further segments the craft brewing industry, breaking brewers into six different categories:

  • Microbreweries

  • Brewpubs

  • Taproom breweries

  • Regional breweries

  • Contract brewing companies

  • Alternating proprietors

Photo credit: Arri Velasco

The State of the Craft Brewing Industry in Minnesota

“Craft beer is king, and the economic impact of the craft brewing industry is growing larger by the year.” Truer words have never been spoken; Minnesota alone has experienced significant growth in the industry over the last 13 years. What started as fewer than ten breweries and taprooms in 2007 has now grown to nearly 200 statewide.

In just over a decade, Minnesota has become an industry leader, ranking 14th nationally for breweries per capita and 12th for barrels of craft beer produced annually. In terms of economic impact, the Land of 10,000 Lakes ranks 13th at just over $2 billion. That may be a modest piece of the 79.1 billion dollar pie small and independent craft brewers have contributed to the U.S. economy, but it’s had a phenomenal impact on the state. According to the Brewers Association, the industry provided 15,778 jobs to Minnesotans and $760,691,000 in labor income just in 2018. On a more local level, breweries account for $15,000 of Fergus Falls’ annual property tax revenue and 37 jobs, 22 of which are new.

But, the impact of craft brewing is about more than its economic value and serving up delicious beers. For Kathy Wagnild, Co-owner of Fergus Brewing Company, it’s about giving patrons a little taste of nostalgia. “This industry is bringing people back in time, in a good way. Every little town used to have its own brewery, its own signature place. That’s what Fergus Brewing Company is for modern-day Fergus Falls. We want to offer people that old-time experience of a town saloon and a church social all mixed together,” Wagnild says.

Outstate Brewing Company, the newest addition to the Fergus Falls craft beer scene, has a similar outlook. President Dan Mohagen remarks, “In many communities, [the craft brewing industry] has provided a place to gather. Across the state, it has supported our local farmers who produce grain, hops, and fruit, which results in the products on tap at our favorite establishments. It’s also shined a light on a unique business culture that is incredibly supportive and celebratory while also maintaining a positive competitive spirit.”

Photo credit: Kaleb Rotering

COVID-19’s Impact on Local Brewers

While the craft brewing industry has come a long way since 2007, the COVID-19 pandemic has presented a new set of challenges for local brewers. That being said, the industry has always been crafty, even going as far as changing the law to accomplish their goals. So, it's no surprise that brewers are more than willing to get creative during these times

Outstate Brewing Company was just a few months into its first year of operation when the pandemic started. Like many others, they were forced to close. “Being in our first six months before it hit, we were just hitting our stride and preparing for our first summer. The entire beer industry was affected by packaging shortages and most of our distribution outlets closed,” Mohagen recalls. Despite the setbacks the pandemic has caused, local brewers don't consider themselves down and out. Many of them have learned to pivot, making the best of a situation no one saw coming.

Outstate took a leap of faith and began increasing distribution to local markets — something they initially planned to do in their second year of business. Mohagen and team also plan to make the most of their location near the Otter Tail River. They hope to add a dock to their outdoor space to make it easier for kayakers and paddle boarders to access the brewery and taproom.

Fergus Brewing, who’s indoor capacity is reduced to about 20 people due to social distancing, is also grateful to have outdoor seating to accommodate patrons, as well. Wagnild notes, “Going forward, we’ll try to maximize those spaces as much as possible so people can relax and have fun at Fergus Brewing into the fall, and maybe winter. I hope people are ready to drink beer with mittens on!”

Photo credit: Arri Velasco

The Future of Craft Brewing in Fergus Falls

Fergus Brewing Company's first year in business has panned out a bit differently than expected. Still, as it approaches its first anniversary, Wagnild believes the brewery's future is as bright as ever. The team has plans to roll out a program that allows the taproom to raise money for local nonprofits. The brewery also has big goals to add new equipment for experimental beer runs and to develop deeper connections with other local businesses.

Part of what makes Fergus Brewing Company so hopeful for the future is the community where it resides. Fergus Falls has been supportive of the brewery and taproom from the beginning, something the entire team appreciates. We are “often struck with a sense of gratitude that we have been so welcomed by our community. Fergus Brewing Company has become part of the fabric of Fergus Falls,” Wagnild remarks. This is a sentiment Outstate Brewing agrees with, noting that "the grace of our community and others who have partnered with us" has significantly contributed to its success, especially during the pandemic.

Photo credit: Kaleb Rotering

Only time will tell what the continued impact of the craft brewing industry is on Greater Minnesota, but Greater Fergus Falls is confident that our local brewers will continue to adapt. Whether selling branded merchandise or hosting food vendors and performers, Fergus Brewing, Outstate Brewing, and Union Pizza and Brewing certainly have the gusto for finding creative solutions. That combined with a loyal fan base, is a winning combination!

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