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Minnesota Breweries Adapt to Changing Times as Industry Faces Closures and New Trends

by Kaia

ST. PAUL, Minn. — Once thriving in the late 2010s, Minnesota’s craft beer scene is experiencing a shift, with fewer new breweries opening and some long-established ones closing their doors. One such example is Mankato Brewing, which will serve its final draft at the end of this month after 13 years of operation.

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Tim Tupy, the founder of Mankato Brewing, recalls a time when there were only 12 production breweries in the state. Back then, the market was much smaller, with major players like Granite City and Rock Bottom being among the few brewpubs available. Tupy, however, made the decision to close due to a combination of factors, particularly the challenge of managing both his brewery and a separate business with his wife.

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Initially, Tupy hoped someone would take over the brewery, but after six months with no offers, his hopes dwindled. “Once I exhausted that, I knew we weren’t going to find one of our investors or a family member to step up and run the brewery,” he said.

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Tupy cited 2019 as Mankato Brewing’s most successful year in terms of sales, but the pandemic changed everything. “Consumers have changed their habits,” he said, noting that people are drinking less alcohol and beer. Although Mankato Brewing introduced non-alcoholic options, it never expanded to include food or THC-infused beverages, a move that has become increasingly common in the industry.

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Mankato Brewing’s closure is not an isolated case. Chanhassen Brewing Company is set to close on February 1, and Leinies in Chippewa Falls will shut down this Friday. Bob Galligan, the director of government and industry relations for the Minnesota Craft Brewers Guild, pointed out that while the craft beer boom of the mid-2010s is over, the industry is now facing more closures than openings.

Galligan noted that breweries are adapting to the evolving market, with many offering non-alcoholic beers and THC drinks to stay afloat. He credits these innovations for helping breweries survive post-pandemic. “It would take me more than my two hands to count how many breweries this has probably saved,” he said, highlighting the craft beer industry’s ability to pivot in the face of adversity.

In response to shifting consumer habits, many breweries are also catering to younger generations who are drinking less and going out less. For example, St. Paul Brewing, located in the historic Hamm’s Brewing building, has adapted by switching from a distribution model to a brewpub model.

“We switched to brewpub because we saw that shelf space was limited, and there were so many openings that we had to create a destination,” explained Sean Ryan, senior project manager for St. Paul Brewing. This change has proven successful, with the brewery seeing a 25% increase in business year-over-year. Ryan attributes this growth to the brewery’s diverse offerings, including non-alcoholic options, cocktails, and a full food menu, which appeal to a broader range of customers.

St. Paul Brewing has also enhanced its customer experience by offering historical tours of the building and plans to expand with a new entertainment venue and a community event center that will seat up to 300 people.

Galligan believes the future of the craft beer industry lies in reconnecting with local communities. “I think we’re kind of returning to our roots in a lot of ways,” he said. “Before prohibition, beer was produced in a way similar to how we are doing it now. Craft beer is the American model, quite frankly.”

As the industry faces challenges, the breweries that remain are adapting by offering more diverse experiences and products to meet the evolving needs of today’s consumers.

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