Look for the Winter Issue of Thinking Minnesota ft. Minnesota’s Beer Boom

Minnesota’s craft beer industry has boomed over the past several years thanks to legislative reforms focused on deregulation and tax cuts.

The 2019 Winter Issue of Thinking Minnesota* features a cover story by the Center’s Economist John Phelan on Minnesota’s beer boom and how deregulation and tax cuts enabled brewers to thrive.

The craft beer industry boom is similar to the growth of any industry in a free market. Economic growth ultimately depends on the quality of government policies and institutions. These affect incentives to innovate, start a business, hire workers, and invest in physical and human capital.

Deregulation enabled innovative brewers to enter the market. Coupled with this deregulation, lower excise taxes both incentivized craft brewers to get started and enabled them to retain the capital to grow once they did.

Regulations are, perhaps, the biggest problem facing enterprising craft brewers in Minnesota. As is often the case, regulations exist less to protect “the public” than to protect some competitor who lobbies hard in their favor.

Data from the Department of Public Safety shows licensed breweries in the state increased fourfold from 2011 to 2016, and Minnesota now ranks 13th nationally for breweries per capita. With around 170 brewpubs across the state, Minnesotans’ thirst for craft beer can be quenched in the Twin Cities and in Greater Minnesota.

The latest Thinking Minnesota Poll, also featured in the magazine’s Winter Issue, revealed alcohol preference varies by location. City dwellers prefer beer (48 percent) by a wide margin over wine (26 percent) or liquor (19 percent). Suburbanites were split with a slight preference for wine (37 percent) over beer (36 percent). People in small towns prefer wine over beer by 10 points (39 percent to 29 percent), while people from rural Minnesota prefer beer over wine by the same margin (39 percent to 29 percent).

And the type of beer preferred also varies by location. Consumers in the Twin Cities prefer craft beer to traditional American domestic brands and foreign/imported brands, while the rest of Minnesota prefers traditional American domestic brands.

To meet craft-beer drinkers’ demand for new and interesting beers, brewing companies are getting creative with their “flavors.” The latest can be found at Barrel Theory Beer Company in St. Paul: Slime Green Paint Peanut Butter. For those who like peanut butter cups, this beer is a must-try. “The nose is 100 percent peanut butter and the flavor is a chocolate/peanut butter mix,” the Pioneer Press reported.

Who’s up for a brewski?


*The 2019 Winter Issue of Thinking Minnesota is available to read here. If you would like to receive a hard copy of this issue and future issues, please call 612-338-3605 to sign up for our free quarterly magazine.