Castle Danger Brewery in Two Harbors was required to stop selling growlers on Tuesday because it exceeded the 20,000 barrel per year cap in September. Once the cap was reached, it triggered a restriction limiting breweries from selling more than 750 barrels per year bottled in off-sale products such as growlers (64-ounce glass containers of beer).
Maddy Stewart, marketing and events manager at Castle Danger, told The Center Square that Minnesota places two caps on breweries: a 20,000 barrel annual production cap and a 750 barrel per year cap on closed containers for consumption off premises.
Growlers account for about 30 percent of Castle Danger’s taproom revenue, Stewart said. The cap will force them to discontinue a full-time position and lay off part-time staff.
Sen. Karin Housley, R-St. Marys Point, has garnered more than 11,300 signatures on a petition submitted to Gov. Tim Walz to “save the growlers” by raising or eliminating that limit.
Housley said in a news release that these laws hurt small businesses across Minnesota, including Castle Brewery and others approaching that cap, such as Lift Bridge Brewery, and Indeed Brewery Co.
“These aren’t massive breweries; they’re small businesses homegrown in our communities – and we’re punishing them for success,” Sen. Karin Housley said in a news release. “Last session, I introduced a bipartisan bill to change the cap. I will continue to aggressively push for this change when the legislature reconvenes.”
According to comments by Housley on the petition page: “This isn’t about politics; it’s a bipartisan issue with bipartisan support. It’s about supporting our local businesses and letting them grow.”
Stewart said the caps are intended to protect the three-tiered alcohol system, comprised of producers, distributors and retailers such as liquor stores.
Hitting either cap bars breweries from selling growlers, but Stewart said she didn’t see how the laws protect the three-tier system because retailers are still selling 95 percent of Castle Danger's beer while the brewery serves only 5 percent of its product in the brewery's taproom.
A liquor store down the street from Castle Danger is one of their busiest accounts in Minnesota, Stewart said, noting that the same store can sell four-packs, six-packs and kegs of Castle Danger beer.
“Then at the taproom, we can’t sell anything else but 64-oz growlers or the mini-growler or crowler size,” Stewart said, referring respectively to the 32-ounce bottle and 32-ounce canned beers that are becoming increasingly popular.
Stewart said Castle Danger started through word of mouth and grew from 11 accounts to producing 23,500 barrels of beer in 2018.
Stewart added the brewery has no problem with the 750-barrel cap, but they want the 20,000-barrel per year cap eliminated or significantly raised.
"Our main goal is to make sure that any craft brewery in Minnesota can sell growlers if they want,” she said.
Stewart said growlers are important to the local economy and workforce in tourist-driven towns like Two Harbors, and eliminating that cap would allow Castle Danger to keep its employees and hold more events.
“I would just hope that any brewery that would be in the same situation as us would be able to sell them if they wanted to because the numbers just don’t add up,” Stewart said. “If you get to 20,000 barrels of beer, you’re most likely sending the majority of that out the door through the distribution channel. It’s not coming from your taproom.”