Minnesota is home to more than 200 craft breweries. While the craft beer industry was hit hard by the COVID-19 pandemic, it's starting to rebound. Bob Galligan is Director of Government and Industry Relations for the Minnesota Craft Brewers Guild, which supports and promotes craft beer all across Minnesota. Bob credits the survival of the industry to its resiliency and spirit of collaboration. And he says to keep the craft beer industry viable, consumers need to keep showing up and supporting their local breweries.
Minnesota Craft Brewers Guild
Experience Rochester, MN
Minnesota is home to more than 200 craft breweries. While the craft beer industry was hit hard by the COVID-19 pandemic, it's starting to rebound. Bob Galligan is Director of Government and Industry Relations for the Minnesota Craft Brewers Guild, which supports and promotes craft beer all across Minnesota. Bob credits the survival of the industry to its resiliency and spirit of collaboration. And he says to keep the craft beer industry viable, consumers need to keep showing up and supporting their local breweries.
Minnesota Craft Brewers Guild
Experience Rochester, MN
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Speaker 2:There aren't many benefits or positive aspects of a global pandemic, but I do think that it in a lot of ways kind of shook up the industry and made us kind of take a look inward and start thinking more about what are our actual core values and how do we actually continue to make sure that those are projected and acted upon, even though the market has completely changed.
Speaker 1:Welcome to the Growing Destinations podcast, where we take a deep dive into destination development and focus on a wide range of topics, from tourism and entertainment to economic development and entrepreneurism and much more. I'm your host, Bill Von Bank. Minnesota is home to more than 200 craft breweries. While the craft beer industry was hit hard by the COVID-19 pandemic, it's starting to rebound. Today I chat with Bob Gallaghan, director of government and industry relations for the Minnesota Craft Brewers Guild. The Guild supports and promotes craft beer all across Minnesota. Bob credits the survival of the industry to its resiliency and spirit of collaboration And he says to keep the craft beer industry viable, consumers need to keep showing up and supporting their local breweries. Bob Gallaghan, welcome to the Growing Destinations podcast.
Speaker 2:Thank you so much. Happy to be here.
Speaker 1:Bob, we're going to talk about all things beer, but before we do that, share with us a bit about yourself.
Speaker 2:Most of it is all things beer. I'm originally from St Paul, born and raised. I went to college at the University of Minnesota and then I actually moved down to Austin, texas, and was down there for about six and a half years. But down there I ended up being employee 002 at a tiny little brewery. I started packaging and then the head brewer left after a year. So I stepped into that role, did that for a year and a half two years.
Speaker 2:Taperam wasn't doing how well we wanted it to, so I moved over and managed that for two years. And then I was tasked with building a quality assurance, quality control program with a focus on sensory science, so kind of flavor science, got to know that world. And then when I moved back home turned out Surly was looking for a sensory specialist, so Surly in Minneapolis. So I was there for four and a half five years. And then during the pandemic I actually was on the board of the Minnesota Craft Brewer's Guild, kind of helped guide the industry through that. And then when our executive director, lauren Ben McGinty, stepped away to run Explorer Minnesota, somebody had to take over, especially the government relations kind of role. So I had a little bit of experience doing that in Texas, but also through the pandemic, so I kind of moved into this role.
Speaker 1:Great lead in. You are the director of government and industry relations for the Minnesota Craft Brewer's Guild. Tell us more about the Guild and your role.
Speaker 2:The Guild is here to support and promote, you know, craft beer all across the state, really making sure that it's all across the state because we do have breweries in kind of every corner.
Speaker 2:So more than anything, we're here for the brewers and breweries to really make sure that they continue to grow and that awareness of craft beer and the importance of craft beer is known to all the citizens.
Speaker 2:But in that regard we also want to make sure that we are promoting, you know, the actual citizens of Minnesota and their interest in craft beer and the celebration, more than anything, a lot of it is the celebration of what the industry has become and where it's heading and just in general kind of the entire culture.
Speaker 2:So that's kind of our main goals. My role is definitely very much focused, obviously, on government relations, making sure from a legislative side we're taken care of and we keep promoting and pushing our rights that we are allowed to do and sell beer in this state. We still have a little ways to go, but I think we're on a right track. And then, from an industry standpoint, just because I was a brewer, i was QAQC, I'm a GABF judge, great American Beer Festival just because I've been in the industry. For a decade I kind of handled that side of things and are a lot of our interactions with the Brewers Association, the National Trade Organization, and try to keep everyone kind of on the same page. I guess is one way to describe what I tried to do just making sure that as an industry we all are aligned and celebrating each other.
Speaker 1:And in your role, you keep an eye out for the brewers at the legislature.
Speaker 2:I do, i do, i try to as hard as I can, especially this session. It's been a little hard keeping your head on straight, but but yeah, that is a lot of my role during come January through June. That's kind of my meat and potatoes of what I do.
Speaker 1:How many craft breweries are there in Minnesota right now?
Speaker 2:I'd have to go back and look at the exact number, but we're running just over 200, maybe 210. And the Guild represents just over 185.
Speaker 1:So a very large bulk of that And that's all over the state. Yep, yep. Is it fair to say the craft beer boom in Minnesota was spurred by what was called the Surley Bill in 2011?
Speaker 2:I think that is fair to say. What it did in a number of ways is one kind of aligned us with most other states in the country. At that point, before the Surley Bill, you can only go to the taproom, you could only get beer to go. They could give you free samples but you had to. If they weren't going to make any money off of it, you had to actually buy beer to go. So, more than anything, what it did, i think, is change a lot of the culture and opened up this taproom culture that we have today. But by doing that you also change the industry in a lot of ways.
Speaker 2:I don't think a lot of these kind of mom and pop type breweries that are in some of the smaller, more rural areas would exist, who are just kind of your local corner pub in a lot of ways, which is what beer used to be pre prohibition.
Speaker 2:That was kind of the model that existed, but in Minnesota that was impossible up until the Surley Bill. So I think it really did change the landscape for sure, and huge growth, yeah, yeah, because a lot of those kind of mom and pop shops and smaller type breweries that weren't focused mostly on distribution. I think that was the largest shift on people opening craft breweries for a taproom model rather than trying to send it out the door. That led to a lot of the smaller breweries exploding, and nowadays I'd have to go back and look at the Brewer's Association statistic, but I think something like 90% of Americans live within 10 miles of a local craft brewery or something like that. So it's pretty insane, just from when I entered the industry in 2011, just seeing how expansive the actual industry has. When I started, i want to say there was 1,700 and some breweries in the country And now we're approaching, i think, 9,000. It really has been quite the boom And it's slowing a little bit, but yeah, we still are gaining members.
Speaker 1:And they're small, independent breweries.
Speaker 2:Yep, And that's kind of the spirit of craft beer is really celebrating the ingenuity and kind of that independent spirit.
Speaker 1:A 2021 report by the University of Minnesota Extension Office notes that, after a decade of exponential growth in Minnesota's craft breweries, covid-19 led to an 18% drop in economic activity in 2020. A tough hit for an industry that generated more than $1 billion in economic activity only a year earlier. Can you give us a current state of affairs on the brewery industry in 2023?
Speaker 2:I would say a pretty hard hit is a gentle way to say it. It kind of decimated the industry in a lot of ways, especially because, like we talked about, a lot of those smaller breweries are taproom driven and the pandemic obviously shut down all taprooms across the state. Most of our members were more than happy to do so in the interest of public health, but it definitely did decimate us. Having said that, we really didn't lose as many breweries as I think a lot of people were anticipating and I think a lot of that credit actually does go to especially the federal government. the local government. Minnesota didn't do a whole lot for us as craft breweries. They were unwilling to change anything to help Minnesota craft breweries but from a federal level with different programs like PPP and those types of things, they really did help a lot of our membership kind of wade through the waters.
Speaker 2:The hard part now is actually coming out of the pandemic because those programs are no longer in existence. Everyone is definitely dealing with staff shortages, increased inflation, supply chain issues. So across the board I would say that the landscape has changed rather dramatically just from a difficulty of operating a brewery standpoint. Having said that, I do think that the fact that so many breweries did survive and that so many breweries are kind of starting to get back on their feet again is really a testament to kind of the resiliency of a lot of the craft brewers.
Speaker 2:It's not an industry you go into to feel comfortable. It's kind of unlike pretty much anything else out there, And so that kind of spirit of craft beer, of thinking on your feet, of every day being completely different. I think that definitely plays into the fact that the industry still, like I said, breweries are still coming online and those breweries that still do exist and are operating have found new ways. There aren't many benefits or positive aspects of a global pandemic, But I do think that it in a lot of ways kind of shook up the industry and made us kind of take a look inward and start thinking more about what are our actual core values and how do we actually continue to make sure that those are projected and acted upon, even though the market has completely changed.
Speaker 1:I've spoken to several breweries coming out of the pandemic and asked them kind of what did you learn or what new things did you do because of the pandemic? and it's amazing about how they're able to streamline their process or how they're able to collaborate or work with other breweries to cost share. Did you hear those examples throughout the state as well?
Speaker 2:No, 100%, but I do think that that's been always kind of again, part of the core of craft brewers is really working together. For a long time, when I first started in the industry, there was this very large mentality of us versus them when it comes to macro brewers. It was drink local instead of drinking some of the larger national brands, and that's settled a little bit. One is just because the people who are now starting to drink don't remember that fight. You don't have many 22 year olds who remember the days of us versus them. So the consumer has definitely changed. But at the same time, too, a lot of what we learn on process side and stuff like that comes from a lot of the larger brewers. But the spirit of working together and collaboration is very, very much in.
Speaker 2:Our core is craft brewers And so you know, even since day one, most brewers. If you need a bag of malt that you don't have, you can call your local brewer down the street. If they have an extra bag, you can buy it from them. They'll deliver it. We're not very secretive about a lot of our processes or ingredients or anything like that. You know we meet up rather regularly, whether it's a guild happy hour. Or we also have the Master Brewers Association that we collaborate a lot with, where it's the whole idea is to share knowledge. We just had our craft brewers conference just last month And that's always. You know, the main point of events like that is really getting together and seeing what people are doing and what can you learn from that, what can you take away. And no one is really offended when they have a good idea and somebody copies it.
Speaker 1:What do you think needs to happen now to keep the industry viable?
Speaker 2:There are a number of things. I think more than anything, though, is the consumer needs to continue showing up. Like I said, we're not out of the weeds from the pandemic by any means. A lot of people, when the pandemic happened, some breweries saw an increase in distribution and liquor store sales, and so people thought that you know the industry was doing good. What people don't really realize is not a single keg was sold throughout the entire pandemic.
Speaker 2:So we're still actually looking at, you know, on premise, consumption in bars and restaurants at being lower than they were before the pandemic.
Speaker 2:So that's still kind of coming back, and I think one of the main things that that can be done is going out and visiting your local bar, going to your local liquor store, going to your local brewery. You know it's very much important our industry to get to know your consumer, not just their habits and how to change you know your business model on that, but to literally get to know your consumer, to literally talk to them across the bar, brewer to drinker, and get to know what they like and get to know you know your neighbor That's a lot of it whether it's your neighbor from down the block or whether it's your neighbor from two and a half hours north, or whether it's your neighbor from a different state, because Minnesota does now have quite a bit of beer tourism. Just getting to know each other is, in my opinion, what makes craft beer craft beer, but it also is what needs to be sustained in order to keep craft beer craft beer.
Speaker 1:Well, thanks to the efforts of the Guild last year, breweries have more opportunity now to sell their beer in cans on premise. Can you talk a little bit about that?
Speaker 2:That was a change that was about a decade in the making. It was the largest liquor bill from a beer standpoint in over a decade in the Minnesota legislature And what it allowed is our smaller members to sell four and six packs to go out of their own tap rooms a very limited quantity but it allows them to do so And it allowed our larger members to sell growlers or crawlers to go, and I think that's very important just in the fact of when people do visit a lot of these breweries, they do want to take something home, they do want to take the experience or the actual flavors home, and so it allows the consumer a good way to do that. It's never going to outsell, you know liquor store sales or distribution models, but it is a good way to actually again keep that kind of contact and that integration between producer and consumer as closely tied as possible.
Speaker 1:Minnesota has reason to celebrate. Several Minnesota breweries came home winners from the World Beer Cup, the most prestigious beer competition in the world, and this year it was held in Asheville.
Speaker 2:Yeah, and the World Beer Cup, i want to reiterate, really is the World Beer Cup. They used to kind of trade off every year between the Great American Beer Festival would happen every year, but then every other year would be the World Beer Cup, and it's a little more regular now. But I mean you are going up against the best of the best And this year we had a good showing, three winners We actually had. The Bronze was won by Bauhaus Brew Labs in Minneapolis for Desjockey, their American style sour ale, which is super impressive because sour ales have kind of been on the rise now for a couple of years. It's one of the fastest growing styles of beer in the US, so always good to make a mark in that front.
Speaker 2:We had Oudepil's, out of Minneapolis as well, won Silver for their helis, which is a Munich style helis, which is doubly impressive because they were going up against German brewers who had been making helis for hundreds of years. So to bring home a Silver medal in that category is super, super impressive. And then we have our Gold Medal winner, which was Ursa Minor, up in Duluth for equanimity. That's their Irish style red, again a very, very traditional style of beer, one that's really really hard to kind of dial in, just because you really have to have this balance of malt and hops. It's not like an IPA where it can just be hop driven, which is a little bit I don't want to say easier to make, but hops are one ingredient that kind of overpower everything else. To find that balance, i think, is really, really difficult And we're super happy that Ursa Minor found a Gold in that balance.
Speaker 1:And I imagine this type of recognition is good for business.
Speaker 2:Oh, absolutely. We know as a guild but also as craft beer drinkers in the state of Minnesota that this state does produce World Craft Beer, world Renowned, world Quality, and so this is just kind of an opportunity to actually put our beer toe to toe with all the other beer in the world and show that we really are making world class beer in the state. And it's a good opportunity obviously for the actual beer consumer to recognize that but also then to actually see somebody want an award.
Speaker 2:You want to drink that beer. You want to. If you've had that beer before, you want to revisit that beer. What makes it a medal winner? So it obviously drives people to that. And then if someone is new in the tap room, if they're visiting Duluth for the first time or just in the Twin Cities or in Minnesota, and the fact that there is an actual medal winner that you can order on that tap line, you're probably going to be drawn to that. So it most definitely does help benefit the businesses.
Speaker 1:What are some takeaways you'd like consumers to know about independent breweries?
Speaker 2:I think what makes craft beer craft beer is a two-way street. It is the actual brewer and the fact that they are, in a lot of ways, artists. I got my degree in acting, which was not the most financially sound way to go about life, but I did. But I've always been really, really driven by science. I'm really intrigued by it, and so when I first started getting into the craft beer world, i really fell in love with it, because I think it really is the definitive crossroads of art and science, and to actually experience what brewers are able to do with just, for the most part, four ingredients how varied that can be is always very, very interesting, and I think that's one of the main things that we celebrate in the industry is the innovative qualities of brewers, but also the tradition of brewers. The fact that we do have people in this state that are making world-class helices is super, super impressive.
Speaker 2:But then the other side of the road is the consumer, which I think our consumer is different than pretty much any other industry. I always like to say you know, like music and brewing are kind of the two industries where you actually see people wearing t-shirts supporting your actual local business when you visit other businesses and their competitors, which is always interesting to see. But there's kind of a fandom that goes with craft beer And that fandom also expands into exploring new breweries. So I think those two things really really make us in industry unlike pretty much any other And, as I like to say, especially during the pandemic, when people would come and order from our members to go, rather than, you know, sitting in their spaces. As craft brewers, we take care of our community and in return, the community takes care of us, and I think that's the model that that most brewers try to instill in their communities And they appreciate it And I hope the consumer appreciates it as well.
Speaker 1:The craft brewers guild produces the Alpines North Festival. Tell us more about that festival.
Speaker 2:Yeah, alpines North we've been doing now for quite a while. It's our largest festival, for sure. Definitely one of the largest in the state Happens every year in Duluth Bayfront Park.
Speaker 1:Beautiful location.
Speaker 2:Absolutely gorgeous. There are very few places in this state. I would rather feel the wind while drinking a beer in, but yeah, it's a super happy time. It's just more than anything away for our members to celebrate who they are again, to celebrate the actual culture. We do try to model it, so it definitely is consumer driven, but we want to make sure that it is a good festival for the brewers as well, which is the feedback that we get a lot of the times after Alpines North. Is the brewers really saying it's one of their favorite festivals, just because it really is kind of focused on the brewer and the consumer comes in and experiences the culture that the brewers feel, but then also, again, just kind of the craft beer in the state. So it's great.
Speaker 2:It sells out every year. We're super happy with it. The lines don't normally get too long. It depends on if there's a beer that's truly sought after. Sometimes they'll get a little bit long, but all in all it's a really great place to just come to a central location and try any beer that that's your heart's desire And again get to know breweries from the other corner of the state that you have never had or want to revisit.
Speaker 1:What excites you about the craft beer industry moving forward?
Speaker 2:Again, i think a lot of it is kind of the innovative nature of the industry and the fact that you never really know where it's heading. Everyone for 20 years now the question has been what's going to be the new IPA, and there has been speculation but there has been no follow through on it. So it's always fun to see kind of what brewers are going to be dabbling in. We now are in this place where some brewers are exploring what's considered the beyond beer category, which initially was kind of hard seltzers, which most brewers were very adamant they would never make, and then they realized that no, the consumers actually really, really enjoy this. So a lot of them put their heart and soul into developing flavors for that.
Speaker 2:I'm currently in the middle of a bonkers legislative session trying to protect our members' rights to produce these THC beverages that they've been able to produce now since July of last year. So that's really opened up the doors on a whole new world for a lot of our members In Minnesota. it's the only state that can really produce these beverages in the way that we can, so it's super interesting to kind of see that side of things. But again, as long as we maintain true to our morals and to our core values. I don't think craft beer has any way to really stray so long as we keep showing up and our consumers do as well.
Speaker 1:Bob Gallaghan. Thanks for helping us explore Minnesota's craft beer industry and best wishes with your impressive work and important work you do with the Minnesota Craft Brewer's Guild.
Speaker 2:Thank you so much, it was a pleasure.
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