Minnesota Brewery Booms Despite Recession

In these harsh economic times when many companies are struggling to stay afloat, a local brewery is beginning to expand quicker than it can handle.

Surly Brewing Co., which hails its name from “the anger fueled by the inability to find good beer,” celebrated the third anniversary of its first sale this month. In those three years, the beer has built a strong fan base and expanded to bars in the region, including nearly 30 in Chicago.

Owner Omar Ansari said “Surly Nation” — his name for the beer’s fan base — has helped the beer grow in popularity during the economic downturn.

While he said his beer is more expensive and might deter some people because of the crisis, he originally thought the economy might not affect beer.

“I always sort of thought beer would be recession-proof because there’s always a reason to drink … good times or bad times,” he said.

And people are drinking.

When Ansari and his brewer, Todd Haug, began brewing in January 2006, they were making about 50 kegs a week. Now, they brew between 150 and 300 a week and still cannot meet demand.

“We can’t ever make enough beer, so it seems to be a constant problem,” he said.

While this “problem” seems like a great one to have in the market today, the economy is making it more expensive to make beer.

When Surly opened in 2006, Ansari said hops cost only $3.50 per pound. Now, the cost is $20 per pound.

The “Surly Nation” has grown despite increased prices, and a local liquor store owner is upset that he cannot serve the fans.

Irv Hershkovitz, owner of Dinkytown Wine and Spirits in Minneapolis, said the store was put on a waiting list for Surly nearly two years ago and continues to lose customers to other stores that request the local beer.

The college market has helped Dinkytown Wine and Spirits become one of the state’s top sellers of other local beers, including Summit and Grain Belt, Hershkowitz said, adding that he can stock any Minnesotan or Wisconsin beers being sold in Minnesota — except Surly.

“When you’re first turning 21, you’re experimenting with what you’re probably going to drink the rest of your life,” Hershkowitz said.

Ansari said the company is continuing to focus on brewing more kegs than cans because it is a better way to “get the name out there,” and some campus bars are seeing people flock for the beer.

Big Ten Restaurant and Bar co-owner Todd DuPont serves the Bender variety of Surly and said it’s among the top-five sellers of the restaurant’s 16 beers.

Dupont said beers have to pass a taste test from the shop’s employees and some regular customers, and now that people are drinking the beer, it will remain on tap.

Downtime Bar and Grill General Manager Chris Shaffner also said Surly is among his top selling beers, and he likes it because “it’s local and it’s good.”

Local was one of the topics on Ansari’s mind when he opened the brewery in 2006 because he initially saw room in the market for another brewery.

“I thought the Twin Cities could use another brewery, and I thought maybe there’s a chance the market would want to drink the kind of beers I want to brew,” Ansari said.

Summit Brewing Company opened in St. Paul 23 years ago, and Grain Belt Beer opened more than 100 years ago in Minneapolis and has since moved out of the Twin Cities.

Initially, the hardest thing for Ansari was finding a building. His parents owned an industrial supplies manufacturing company, Sparky Abrasives, and let him rent out 5,000 square feet to begin brewing.

Now, Surly is operating on the entire 22,000 square feet, making beer and offering free tours.

Almost every Friday as many as 100 people show up to tour the facilities and taste a few of the varieties of Surly.

“They should be able to come in and try your beers so they know what they want to purchase in the stores,” Surly employee Sarah Lawson said.

Chris Stern, a University of Minnesota graduate student, said he drinks Surly weekly.

Although the beer is more expensive than most, Stern said, “I’m not a heavy drinker, so I go for quality over quantity.”

Source