Below are some common questions that craft beverage fans and legislators ask about our initiatives.
What are some of the statistics of the industry?
- There are more than 350 craft beverage producers in the state of Minnesota employing more than 6,250 individuals myriad of different jobs. Approximately 50% of those establishments are located in the Twin Cities and the other 50% are in greater Minnesota.
- Craft beverage producers pay more than $10 million in sales and use taxes annually.*
- There is a winery, brewery, distillery, or winery within 15-20 minutes of most of Explore Minnesota’s “Top 10 Minnesota Attractions by Region.”
- With multiple small and large scale events each year, these businesses draw visitors from the local area, around the state, and the whole country.
- Each of these producer groups have a presence at the Minnesota State Fair, engaging tens of thousands of visitors each year.
- These establishments also hire local musicians and support local vendors through regular programming and special events.
- Craft beverage producers commit time and resources to supporting their communities through charitable giving programs and volunteer activities.
Industry Classification System) code other than 3121 (Beverage Manufacturing).
Will proposed changes disrupt the three-tier system?
Many of the current liquor laws were developed before craft beverage production became mainstream, following the end of prohibition. Now, with the explosion of craft, many small producers find it difficult to engage in distribution in their own states much less in their region or the rest of the country. Many say that it is easier for an outside producer to sell in Minnesota than it is for these Minnesotan businesses.
The three-tier system works well for many producers, distributors, and retailers and we have no intention of disrupting it. Unfortunately, some aspects of the current system have not evolved with the craft beverage industry. Our proposed changes are meant to improve the existing system to better support the growth the industry has experienced in the last decade and develop more job opportunities throughout the entire craft beverage ecosystem in Minnesota.
We will continue to promote and support our relationships with wholesalers, teamsters, bars, restaurants, liquor stores, and all other stakeholders in the craft beverage ecosystem. We want to be able to continue to provide them with the freshest, best products that Minnesota craft beverage producers have to offer.
Why do you want to sell more products directly to customers—
won’t that take away sales from your partners?
Retail sales at taprooms/tasting rooms are common for the U.S. When it comes to this option, Minnesota places last for breweries and distilleries in direct off-sale. We have the most restrictive laws which in turn have a negative effect on tourism and local economic support.
We do not believe sales direct from tap or tasting rooms will have a negative impact on our partners in the industry. We know customers may take a growler or a bottle of liquor, wine, or cider from the source or with their take-out, but it is likely that consumers continue to purchase the majority of their alcohol for at home consumption from our local liquor stores.
The proposed changes also propose strict caps on the amount of alcohol a customer can take home from a bar, restaurant, brewery, cidery, distillery, or winery. For breweries, there is also an annual sales cap for the amount a brewery is allowed to sell in off-sale in any given year (750 barrels). These caps do not currently exist for liquor stores.
Further, when wineries, breweries, distilleries, and cideries create products that consumers love, demand for those products—and therefore sales—grow at bars, restaurants, and liquor stores.
Will these changes eliminate jobs in the three-tier system?
Fortunately, that is NOT true! Jobs at the producer level leads to growth in the other two tiers. The more fresh and local products being made the more demand, more opportunity for distribution, and more sales for local bars, restaurants, and liquor stores.
Here’s an example:
For every 1 job at a brewery, there are an additional 31 full-time jobs created including*:
- 2 jobs in beer wholesaling
- 13 jobs in beer retailing
- 1.3 manufacturing jobs
- 0.7 farming jobs
*Information provided by the National Beer Wholesalers Association & Beer Institute
Job loss occurring in the second and third tier is likely a result of major distributor consolidation in the industry. We can also see that, except for 2020, there has been steady growth in jobs in the craft beverage ecosystem over the past 10 years:
Data for graph provided by the State of Minnesota.