As craft competitors spring up, Summit Brewing tries to keep it cool

Brewer Mike Lundell performs tests on a batch of beer at Summit Brewing in St. Paul, Minn. Friday, Sept. 20, 2013. (Jeffrey Thompson/MPR News)

Detractors of Summit Brewing would like you to think that the operation is akin to an old man that wants Surly, Fulton, Indeed and all the other punks new to the Minnesota brewing scene out of their yard.

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Mark Stutrud, Summit President and one of the original founders, says he takes a longer view than getting too wrapped up in the beer of the moment.

In a discussion about hardcore beer geeks, he’s quick to point out that the craft brewing industry is only 6.5 percent of total national beer sales. He certainly keeps track of the new emerging players in the regional brewery market. But as someone who has battled with national brands for decades, he sees more opportunity in winning over macro beer consumers than getting in a struggle with small brewers.

King of the bluff

Summit Brewing Company is located in a small St Paul industrial park nestled among the trees atop the Mississippi River bluff. According to the Brewing Association, Summit has consistently produced more beer than any other craft brewer in the state. 2012 marked the first time where Summit was out produced collectively by the new wave of Minnesota craft breweries.

Summit on the left column, Schells in the center, remaining top breweries on the right. Note: Bard's Tale made the Brewers Association's top 10 in 2012, 2011, 2010 and 2009, but won't release data publicly. Lake Superior  made the Brewers Association's top 10 in 2012 and 2011, but won't release data publicly. Brewers Association's data excludes August Schell Brewing Company, which isn't considered a craft brewer by the association. Data: Brewers Association, August Schells Brewing Company  (Robert Boos, Michael Olson/MPR News)

Last year Summit had over $25 million in sales and has grown consistently over the last two decades.

“Fifteen years ago we did a quarter of what we did last year. We are on target to sell 125,000 barrels of beer in 2013.” Stutrud said. That would be an increase of about 12,000 barrels from 2012. That increase is more than half of what Surly Brewing Company produced in all of 2012. Surly broke ground on a new production facility this year that will allow them to brew over 100,000 barrels a year.

Summit has enjoyed steady growth all along, “We’ve never had a down year in the company’s history,” Stutrud said. The worst year on record was 2008. The economic downturn was a disaster for the hospitality industry. It didn’t bode well for Summit either. Roughly half of the beers they sell are on draft.

Look out below

While Summit has enjoyed a cozy perch at the top of the craft brew industry in the state, there has been a lot of changes among the top producers in the state recently. Brewpubs like Rock Bottom, Herkimer, Brauhaus and Great Waters have slipped off the Top 10 producers list over the past five years. They’ve been replaced by new breweries like Surly, Fulton and sorghum brewer Bard’s Tale. One notable brewpub that added beer production is Duluth’s Fitger’s Brewhouse.

Summit shakes off staid image

There are perks to being the oldest existing craft brewery in the state. But with the wave of new brewers, Summit’s flagship lineup starts to look and taste dated to craft brew enthusiasts that are seeking new experiences with their beer.

“For a long time Summit has been recognized for its overall quality and consistency for its beers,” said Damian McConn, head brewer at Summit. “And I think creativity and innovation wasn’t so much what we’ve been recognized for.”

That is part of the reason Summit launched it’s Unchained and Union Series beers.

The Unchained series rotates among the company’s seven brewers, it gives each brewer an opportunity to make a beer of their choosing with whatever ingredients they want. The Union series focuses on using new ingredients with old recipes.

“These series help us stand out and showcase our innovation and creativity within the company and brewing team,” McConn said. “People are looking for something new and something different,. We can cater to that a bit.” He noted the margins are slim on these series due to the high cost of ingredients, but showcasing their brewers’ creativity and associating the brand with innovative beers.

McConn’s newest creation for the Union series, Rebellion Stout, is based on a 1896 recipe from Cork, Ireland, that is made using a new hop from the United Kingdom and stout malt from Ireland. Summit’s brewers are working a year out on some of these projects.

McConn is planning more research and development in 2014 as the brewery adds cans to it’s lineup. Summit is also using  its new taproom, thanks “Surly Bill,” to experiment with their pilot brewing system.

Where does the industry go from here?

Summit’s Stutrud, sees a return to regionalism. “There was a time several decades ago where Minnesota breweries had the majority of the share of the statewide beer market,” he said. “I’m confident we are heading back that direction.”

Right now craft beers account for 7 percent of the beer in the state. Macro breweries like Anheuser-Busch and MillerCoors account for nearly 80 percent of beer sales in the state. Stutrud says he’s optimistic that regional brewers can grow their share to 25 percent, akin to what you see in some specific markets like San Diego. “We’re comparable in population to great beer cities like Denver and Portland and we’re nowhere near as saturated as those markets — who are both still growing,” writes Joe Alton from The Growler.

As the number of craft beer drinkers grow in Minnesota and more quality craft beer enters the market some of the new breweries that lack quality control, business acumen and luck will inevitably fold.