Castle Danger is losing the ability to sell its original product — growlers — this fall.
Starting October 1, the Two Harbors brewery won’t be able to sell the half-gallon reusable beer containers because it passed a state-set threshold for the annual number of barrels of beer made. The change comes on the heels of a bill in the Minnesota Legislature that would have eliminated the barrel production cap, which failed this past legislative session.
Minnesota breweries that make more than 20,000 barrels of beer annually aren’t allowed to sell off-sale products, such as growlers and crowlers, out of their taprooms. Those in favor of this law say the cap supports three-tiered distribution systems, that includes producers, distributors and retailers.
The loss of growlers for Castle Danger will impact them fiscally, and they’ll have to make “some pretty tough decisions,” said Maddy Stewart, marketing and events manager for Castle Danger.
Growlers make up around 30 percent of all taproom sales, she said. To account for the lost sales, the company will eliminate a handful of part-time positions, as well as one full-time position, she said.
Lauren Bennett McGinty, executive director of Minnesota Craft Brewers Guild, said she’s heard that businesses’ lost revenue can near $300,000.
“A lot of our breweries do their best to prepare for (hitting the cap). … We know that Castle Danger has done their best to do that,” she said. “But it’s still a huge loss.”
On top of financial effects, the inability to sell growlers will affect Castle Danger culturally, Stewart said. The company first sold its beer solely in growlers, and that’s what many people still know it for.
“People just know (to grab) a Castle Danger (as they go) up the shore. And it’s just become a part of why people come to Two Harbors,” Stewart said. “They can take a piece of the North Shore home with them.”
Castle Danger is the first in a “wave” of breweries that are going to lose their growler-selling ability, Stewart said.
Bent Paddle Brewing, Lift Bridge Brewing Company and Indeed Brewing Company are also “quickly approaching” the 20,000 mark, Bennett McGinty said.
Laura Mullen, co-founder of Bent Paddle, said she's hopeful that laws will change, as her company will likely hit the 20,000 cap in the next year or two.
When this happens, Bent Paddle will see a negative financial impact. Mullen anticipates some “significant” changes to make up the lost sales.
But, she’s not exactly sure how the brewery would proceed. “We don’t have full answers yet, because ... we’re really keeping our fingers crossed for next (session) for this to not be a problem,” she said. “It’s sort of a waiting game at this point.”
Sen. Karin Housley, R-St. Marys Point, introduced last session’s growler bill. She recently told KSTP-TV that she would “aggressively push for a change to this unnecessary law” next session.
Minnesota Craft Brewers Guild will also lobby for the same legislation next session, Bennett McGinty said. “(Growlers) provide breweries with an opportunity to grow. And, ultimately, all the breweries are small businesses,” she said. “They generally have an incredible impact on their communities.”