On Monday night the Twittersphere lit up after Surly’s announcement of a planned 20-million dollar brewery. Tweets and re-tweets proliferated at a blistering pace, causing even my lowly @aperfectpint handle to “trend” locally. (Who’d of thought?) Anxious Surly fans hung on every message, waiting for additional details. The next day comment threads on internet news stories and Facebook posts called the announcement “the most exciting brewing news & brewery in Minnesota since the end of prohibition.” They declared that the new brewery was something that Surly “deserved” and decried groups that might oppose the project as bullies who are only “out to line their own pockets” (as if Surly isn’t looking to make money from this). The comments suggest that to some Surly fans, the project has become like the second coming of Ninkasi. A few of Surly’s own pronouncements have made it sound like a magnanimous act of civic engagement; a boon to the community. To opponents of the plan, from the Minnesota Licensed Beverage Association to the Minnesota Beer Wholesalers Association, it almost amounts to restriction of trade.
Let’s take a moment to cut through the hyperbole look at what’s really going on.
Surly’s Proposal
The Basic Plan
Surly wants to build a two-story, 60,000 sq ft facility. It would house a new brewery that would give them an annual brewing capacity of 100,000 barrels. The building would also house a 250-seat restaurant, a 30-foot bar, a roof-deck beer garden, and an “event center” for weddings, concerts, business conferences, and other types of events. The project is expected to cost $20 million.
Surly’s Claims About the Plan
Surly calls the new brewery a “destination brewery.” In an online article in Twin Cities Business Magazine, Surly Founder Omar Ansari says that the facility will be a “hub for beer tourism”, tapping into a growing phenomenon of beer drinkers planning travel around brewery visits. In the same article he claims it will be “’a complete beer experience’ and will become a part of the metro area’s ‘cultural fabric.’ ‘[The facility] would be another great amenity for the Twin Cities,’ much like other attractions such as the Mall of America and Target Field”.
The economic impact of the project, according to an announcement on the Surly Brewers Blog, includes the creation of 150 permanent jobs and 85 temporary construction jobs. Additional revenue would be generated by the operation of the event center. Although, in a Star Tribune piece Ansari admitted that those numbers may be “a bit pie-in-the-sky at the moment.”
My Take
There is no doubt that the project would have an economic impact for the state. Increased production means increased tax revenue from the brewery. A number of jobs will be created, including increased brewery staff, restaurant staff such as managers, kitchen workers, and front-of-house. The event center may require event planners. And of course there will be construction jobs.
Beer tourism is definitely on the rise, and given Surly’s almost cult-like popularity there is no doubt that the new brewery will become a popular destination. However, the comparison to the Mall of America and Target field seems to me to be a grandiose stretch. It certainly won’t compare to those landmarks in terms of economic impact from tourism.
When you get right down to it, all Surly is really proposing is a great big brewery with a restaurant.
The real significance of Surly’s plan lies not with the thing itself, but with the implications of the proposed changes to the laws governing the three-tier system in Minnesota. More on that in tomorrow’s installment.
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Calm reflection? What are you, crazy? The only acceptable reactions are fanboy maniacal devotion, or reactionary opposition!
Smile…
I don’t think anyone thinks that Surly doesn’t stand to gain from this. I haven’t read anything to that respect. However, I don’t think the MLBA is winning any fans by pushing its self-interest at the expense of a popular local business. The MLBA seems like a bully in this situation, wanting to keep other businesses down so that they might not threaten their death-grip on the control of alcohol in the state of MN. The MLBA also seems to have underestimated the zealotry of craft beer lovers in the state. The image of Surly, Summit, Schell’s, and others creating beer/brewery “destinations” like this makes a local beer-lover’s eyes light up (particularly if that beer-lover has visited somewhere like Portland and enjoyed the beer culture there). If there is a “lobbyist group” that’s going to stand in the way of that kind of growth, they will become enemy #1, right or wrong.
What I don’t understand is how the MLBA stands to lose more than it will gain from these developments. More Surly in the market means that they will likely have to work through one of the MLBA’s distributors. It means that more of the MLBA’s bars and liquor stores will be able to get and sell the Surly that they’ve been on a waiting list to receive. I understand that scarcity breeds demand, but I think the product has driven the demand more than the fact that some people can’t get it (unlike Fat Tire’s move into MN, which had excitement driven more by scarcity than by quality). Anyway, I’m rambling. I look forward to seeing what you have to say in terms of what the MLBA actually stands to lose vs. gain in this situation.
[quote]When you get right down to it, all Surly is really proposing is a great big brewery with a restaurant.[/quote]
Sums it all up, and I’d love to see it happen. I can’t go to Seattle without going to the Redhook brewery & restaurant and the next time I go to Chicago there will be a trip to the Goose Island brewpub. Although there’s quite a bit of arrogance at Surly, they have also shown themselves to put out a quality product that people want.
As for the MLBA’s argument of breweries cutting the throats of bars and retailers, sorry, but that comes off as a bunch of BS that doesn’t quite pass the muster of basic economics. Sure, Surly could go and sell stuff from their brewery for $5 a 4-pack while selling to others at $6 – $8 a 4-pack. At that point nobody outside of the brewery will buy Surly, their sales and profits will plummet, and they go out of business. Of course, 99% of governmental bureaucracies approach things from matters of control, not those of economic stability or growth.
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Sometimes I wonder if this whole idea of Surly’s is even meant to succeed. It’s pushing buttons, challenging the system. It seems odd to me that Surly would make this gigantic leap in one fell swoop, rather than the tempered growth they have been implementing the last few years.
Some might say that Surly as a whole is challenging the system, and that’s part of what’s worked for them. At the same time, they’ve had to pull back their distribution considerably so going this big is probably a smart move for them.
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