MN Craft Beer Sales Boom Despite Recession

Schell saw sales head south toward the end of last year, says Ted Marti, president of the company. But he chalks some of that up to a price increase for Grain Belt beer in October, which he says was directly related to increased commodity prices. Grain Belt competes on a national scale with beer giants Budweiser and Miller and saw a 7 percent increase in sales last year. “We won’t see as robust of growth as we have in the past,” Marti says.

Minnesotans are increasingly choosing to drink at home to save money. For brewers, this trend is somewhat reassuring because bottled beer is more profitable on a per-barrel basis, Stutrud says. At Summit Brewing, 53 percent of sales comes from bottled beer and 47 percent is draft beer poured at restaurants and bars. Schell sells 70 percent of its craft beer in bottles, and the other 30 percent is sold on tap.

Bob DuVernois, head brewer at Great Waters Brewing Company, a brewpub in St. Paul, says Great Waters sales are slightly down from January 2008 to January 2009, but it doesn’t seem to trouble him. “In general, people aren’t going out so much, but they are still going out—they’re just going out more economically,” he says. Consumers are buying more local beer due in part to the rising “eat local” movement, which places importance on eating and drinking food grown and produced near the end-users table, he says.

And this may be the key to survival for Minnesota’s brewers: their loyal, local customers. For example, 87 percent of Summit’s beer sales are in Minnesota, 80 percent of which are within a 100 mile radius of the brewery. At the same time, Stutrud sees a huge opportunity for growth here because Summit has only 2 percent of the market share in Minnesota.

Beer sales should begin to heat as more Minnesotans head outdoors to engage in warm-weather activities, Marti says. Stutrud adds: “It seems like people are feeling a little bit more comfortable going back out [to restaurants] again.”