Photo courtesy of Arron Luebbert One advantage of small southwest Minnesota breweries is the flexibility to change up their inventory and release new beer varieties regularly, said Arron Luebbert, director of brewing operations at Sleepy Eye Brewing Co.

MARSHALL — The craft beer industry isn’t growing as fast as it used to, but there’s still opportunities for local brewers and winemakers, area businesspeople said.

“The craft beer industry is definitely maturing,” said Dustin Brau, of Brau Brothers Brewing in Marshall. But right now, brewery openings are still outpacing closings, he said.

This week, Brau and other area brewers and winemakers talked about the challenges and opportunities facing their industry. One thing producers agreed on was the importance of events like the upcoming Made In Minnesota Craft Beer & Wine Festival, which will be held at the Red Baron Arena and Expo in Marshall on May 18.

“It’s all about recognition and exposure,” said Arron Luebbert, director of brewing operations at Sleepy Eye Brewing Co. Events like the festival are a chance to introduce local breweries and taprooms to people around the area.

“Anything we can do to draw attention to the craft beer industry and people in our area, the better,” said Nick Patton, co-owner of Talking Waters Brewing Company in Montevideo.

Brau said the craft beer industry grew 4-5% nationwide last year. While Minnesota did see some breweries close in 2023, the closures were outnumbered by new breweries opening. The effects of a maturing craft beer industry might take a little longer to be felt in Greater Minnesota, he said.

“It might lag a little bit, which can be a really good thing,” Brau said. In greater Minnesota, there are fewer breweries in competition with each other, he said.

Although the craft beer industry is still growing in the U.S., “We’re in a compressed time right now,” Luebbert said. “Volume is up, and sales are down.”

However, Luebbert said he thought craft breweries still had opportunities for growth in Minnesota. For Sleepy Eye Brewing, the focus was on variety, and on drawing people to their taproom.

“Our goal is continuing to provide a space where people want to visit us,” Luebbert said. The taproom offers a chance for people to try new beer varieties, or enjoy old favorites, he said.

Sleepy Eye Brewing releases a new beer variety or two each month, Luebbert said.

“We’re small enough that we have an opportunity to keep putting out new beers,” he said. “We can kind of mix up our inventory.”

The brewery has also paired up with a variety of area food trucks and special events as a draw to bring people to the taproom, Luebbert said.

While the craft beer industry is feeling some pressure, “One thing that breweries really have going for them in southwest Minnesota is most of them are smaller scale, and have an amount of flexibility,” Patton said.

While Talking Waters does distribute its own beer in Minnesota, Patton said they also are focusing on their taproom.

“We wanted to be a very taproom-centric business,” he said. “We definitely see traffic in the summer, and we have a great local customer base.”

Having a craft brewery in Montevideo is a benefit to the local business community, Patton said. At the same time, it does face challenges from being in a more isolated part of the state.

Brau Brothers’ beer is sold around Minnesota, as well as by distributors in South Dakota and Omaha, according to the company website. But the Brau Brothers taproom in Marshall also plays an important role for the business, Brau said.

“It’s very helpful for us to get direct feedback,” Brau said.

The taproom serves as “a little bit of a lab” for new products, he said. After the COVID pandemic, customer traffic at the taproom has come back very strong, Brau said.

“People had an itch to go out again,” he said.

Brau Brothers also recently switched its production to canning beer instead of bottling. Brau said it’s a move that will help bring the brewery more in line with the rest of the craft beer market.

“For us, it’s helped quite a bit,” he said.

The specifics of the industry are different, but having a balance of production and a destination for customers is also important for Minnesota wineries.

“We’re a farm winery and also a restaurant,” said Mason Ellenbecker, banquet manager at Round Lake Vineyards.

Round Lake’s first vines were planted in 2007. Since then, the vineyards have expanded to include the Bistro restaurant, hosting a variety of events and serving as a wedding venue.

Recently, Round Lake Vineyards expanded its patio and seating areas, as well as its barrel quantities for producing wine, Ellenbecker said.

Round Lake Vineyards’ wines are distributed in Minnesota, Iowa and South Dakota, said co-owner Jenny Ellenbecker. However, Minnesota’s wine industry is still working to raise its profile.

“We’re a young industry,” Ellenbecker said. “We’re trying to increase our customers’ awareness … It’s getting better, because people are realizing we have some great wines.”

Minnesota wineries are also trying to find ways to keep track of wine sales from competing states, Ellenbecker said. Currently, wines sent directly to consumers — like wines from wine clubs — do not incur Minnesota sales tax. It puts Minnesota wineries at a disadvantage, and it makes it impossible to track how much out-of-state wine is coming into Minnesota, she said.

Minnesota grape growers are trying to create a wine council to promote and advocate the Minnesota wine industry, Ellenbecker said.

Future trends in beer and other beverages are another area that local breweries said they are keeping an eye on. Seltzers have grown in popularity, and Luebbert and Patton said there’s increasing interest in non-alcoholic beverages, especially from younger customers.

“They are liking non-alcoholic or very low-alcohol beverages,” like hop teas, hop water and mocktails, Luebbert said. He said the challenge for craft brewers would be creating new non-alcoholic products that tasted good, and producing them in a food-safe way.

While interest in THC beverages has also grown lately, area brewers said there are still a lot of questions about how their production and sale would be regulated in Minnesota.

“It’s really new and really ground-floor,” Brau said. Recently, the city of Marshall passed ordinances that would allow breweries to produce limited runs of hemp-infused beverages.

The Made In Minnesota Craft Beer & Wine Festival returns to the Red Baron Arena and Expo on Saturday, May 18. The Made In Minnesota festival started in 2020, and has grown despite a hiatus of a couple years during the COVID pandemic, said Adri DeBoer, communications coordinator for Visit Marshall.

The first Made In Minnesota festival in 2020 featured about 20 to 25 booths, and sold around 100 to 150 tickets, DeBoer said. In 2023, the event drew a crowd of 400, she said.

The festival does have an impact on Marshall businesses, especially hotels and restaurants, DeBoer said. However, the biggest impact comes from connecting customers with brewers and vineyards.

“The breweries are the ones who see a lot of impact,” DeBoer said.

“Festivals like this are really important for us to expand as an industry,” Brau said.

This year, Made In Minnesota organizers said the festival will offer a chance to sample craft beers and wines from more than 30 locations in Minnesota. The number of tickets being sold has been limited to 450, DeBoer said.

The Made In Minnesota Craft Beer & Wine Festival will be from 3-6 p.m. on May 18, at the Red Baron Arena and Expo. Tickets are $30, and are on sale at vistmarshallmn.com/made-in-mn. Ticket prices increase on May 18.