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Surly's Next-Gen Brewery

How long will Minnesota's craft-beer boom last? The financiers of Omar Ansari's ambitious project say this is only the beginning.

Surly's Next-Gen Brewery

Ten years ago, Omar Ansari was a thirtysomething new father working for his parents’ small company in Brooklyn Center, an outfit that manufactured metal-finishing abrasives. He was also a hobby homebrewer, initially a skeptical one when he received a kit to make an Irish red ale as a gift—until it turned out better than he’d expected. He was a staunch craft-beer fan, though, having traveled to other cities with traditions of local brewing and sampled the wares, but there wasn’t much to compare them to at home. Summit’s EPA was the big player in Minnesota’s craft scene—the only player, really. Overall, there were very few brewers, little variety, and hardly any camaraderie among craft-beer enthusiasts. Then, one weekend morning, inspiration struck.

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“I was drinking coffee in the basement in my robe,” Ansari remembers. “I wasn’t brewing that morning but I was thinking about it, flipping through a homebrewing catalog, and there was this centerfold, this two-page spread for a three-barrel brewing system. It said it was for a bar or a restaurant, or a ‘homebrewer gone wild.’ And I thought, ‘I wonder if I can open a brewery?’”

Today, Ansari is the president of Surly Brewing—Minnesota’s wunderkind brewery launched in 2006, which has been lauded by Beer Advocate as its U.S. Brewery of the Year and seen its products rated among the best in the world. Surly has steadily grown year after year and at times has barely been able to keep up with demand for its product from bars, restaurants, and liquor stores.

READ MORE: Minnesota's best beer and wine

Surly Hard Hat

Photo by TJ Turner/Sidecar

In 2011, Ansari was behind the so-called “Surly Bill,” that rare example of bipartisan legislative cooperation on the statewide level that changed laws and will now allow him to dramatically ramp up his company’s production while launching an ambitious $30-plus-million brewery and dining destination—Disneyland for beer geeks—that stands to make Surly known from coast to coast.

A vengeful Minnesota winter holds the Twin Cities firmly in its clutches on a Friday afternoon in Brooklyn Center, the end-of-week good cheer tempered by a low-angle sun and melancholy freeze. But though it’s not yet five o’clock, the snowy parking lot outside the Surly Brewing Company is filling up. Inside the taproom, open tables are becoming endangered amid a growing mass of pint-glass-toting aficionados and an unmistakable tone of frozen camaraderie.

Belying the gleeful misanthropy of the Surly brand, the taproom’s vibe is downright fraternal (it’s a landscape comprising nearly all men at this point, with a marked proclivity for beards and eyeglasses). A visiting food vendor hawks snacks, and in the back, a merch room offers the Surly gear that’s nearly as ubiquitous as its taps are in local pubs. The room feels like the terminus of a particularly relaxed and undemanding pilgrimage.

Settling down at a table with a pint of his product, Ansari can’t accurately be described as surly. He has a playful combative streak and a propensity for cheerful gruffness. He’s also understandably preoccupied with the next stage in the company’s evolution—a quantum development with parallels in other cities but no local precedent.

“I wouldn’t start a brewery now,” he says about the timing of his entry into the market eight years ago. “I thought I could fake it long enough, but I never would have been the 31st guy to build a brewery. As it is, I figured I could fake it long enough to figure it out.”

One of Ansari’s best decisions was hiring Todd Haug, the one-time head brewer at Minneapolis’ Rock Bottom Restaurant & Brewery, who he bumped into at a brewing conference and realized he knew from junior high.

Once the decision was made, there were considerable obstacles ahead: Cities such as Denver, San Diego, and Portland had long-established traditions of small local breweries, but the Twin Cities had nothing of the kind. Haug knew that getting started wouldn’t be easy.

“A lot of people he asked told him not to do it, to go to Wisconsin because the laws and the track record were a lot better,” Haug says. “It was risky and there were a lot of unknowns. Either Omar didn’t care, or he was loyal enough to Minnesota to say, ‘Why can’t it happen here?’”

Haug’s recipes represented a differentiation in the local market: bitter, heavy on hops, a counterweight to the classic, lighter pilsners that have traditionally been the dominant refreshment of picnics, fishing trips, and post-work wind-downs. And Surly beers were sold in tallboy cans that stood out on a shelf and also provided a convenient vehicle for the company’s self-referential product names (Bender, Cynic, Furious, Hell) and iconic graphics that encompass elements of hipster design, punk rock, and tongue-in-cheek badassery without drawing explicit allegiance to any one subculture.

The product caught on, and production at the Brooklyn Center brewery rose steadily to 10,000 kegs a year, then twice that. Demand was such that new restaurants couldn’t get Surly for months. Along the way, a following of hardcore beer followers, who sometimes camped overnight outside the brewery’s front door to be the first to taste a new flavor, expanded to include more casual drinkers whose palates adjusted to Surly’s complex flavors. There was an element of synchronicity at play: The brewery hit the market with remarkable timing, paralleling a local rising consciousness in craft beer.

Haug recalls the feeling that, after a long period of stagnancy, Minnesota’s beer scene really made up for lost time. “Then we were able to be there when people were ready for it,” he adds.

A stop-motion film of the intervening years would have seen craft taps proliferating in barrooms like kudzu, and chalkboard lists of brews in wide swaths of styles becoming near ubiquitous—and cutting across lines of traditional expectation. Ansari mentions a small epiphany in Chicago when he saw his beer, and other craft brewers’, served up in what he terms “bro bars,” the traditional turf of the big national breweries.

It was also around this time that Ansari’s business vision began to butt against Minnesota’s “three-tiered” liquor regulations. The law essentially segregated facilities that produced beer from those that served it, making it illegal for a brewery also to serve beer on its premises.

“If that bill didn’t get passed, the Twin Cities would have breweries but not as many,” says Ansari, adding that allowing brewers to open taprooms diversified their income stream—and helped market their retail product.

Surly’s taproom soon opened, and in quick succession a series of other breweries serving on-site followed suit. The strict delineation between breweries, beer sellers, and bar
service was now erased, which led to a rapidly changing landscape.

Surly Construction

Photo by TJ Turner/Sidecar

Indeed Brewing Company in Northeast Minneapolis, which opened in the wake of the Surly Bill, had an initial plan to sell in liquor stores, bars, and restaurants. “We thought the taproom would be a little bonus if we were able to do it,” says co-owner Rachel Anderson. “But after we got started, we realized how huge it was. I don’t think when we started we could quite conceptualize how big a component it would be.”

Within the past couple of years, small breweries have begun to dot the Twin Cities, and their taprooms have been so successful that lines outside are a common sight. A night spent traveling from one to the next, sampling a pint at each, entails moving from one packed room to another, a new wave of nightlife that has materialized from seemingly nowhere. Are taprooms the new dive bars? Or do the infant-toting parents also suggest they’re drawing out new crowds who otherwise would have stayed home?

Adam Sjogren of NorthGate Brewing, which opened in Minneapolis in 2012, also recalls a business plan based primarily on brewing for sales off-site. “Our thought was, how many people are really going to want to go to a taproom, to a place where they can only have beer? We didn’t know about that part of the business, but the answer was: everybody.”

 

The new Surly facility, projected to open later in 2014, will dwarf any of the other local taprooms in scale and ambition. The company has acquired an 8.3-acre plot of land in Minneapolis’s Prospect Park and broken ground on a destination projected to employ 150 when it’s fully operational.

“We hope people will see our new space and say, ‘Oh, now I get it,’” Ansari says. “We’re proud to be associated with taprooms, but we didn’t change the law for the taprooms. It was for this new facility.”

Ansari cites breweries in San Diego, Philadelphia, and Salzburg as models for the Surly expansion—makers of craft beers who have created go-to destinations. In addition to a beer garden and event center, the facility will house a full-service restaurant, with Todd Haug’s wife, Linda, of the former Café Twenty Eight, consulting. The brewery will be blocks from the light rail, on enough acreage for even greater growth beyond the immediate projected fourfold increase in brewing capacity—allowing the company to meet still-rising demand in Minnesota, Chicago, Wisconsin, and the Dakotas.

Walking through the current Surly facility, Ansari clearly delights in being an American-made business, an employer, and a second-generation entrepreneur. “This is manufacturing—heavy metal, stainless steel—and we’re not sourcing it out to China. We’re making it.” The Brooklyn Center brewery, which will remain open, is clearly at max capacity, with its tanks brewing full-time and coolers packed to the gills.

Ansari mentions that other sites had been under consideration for the new location, but a smaller plot of land would have limited options. “You’d like to be on the river, but we wouldn’t have been able to grow there,” he adds, pausing to mention great breweries of generations past, in both Minnesota and Wisconsin. “In 100 years, you’ll say, ‘What a great old building.’”

So how much potential does craft beer in Minnesota have in the years ahead? Nationally, many of the biggest names have seen precipitous drop-offs in sales: Michelob Light is down 70 percent, Miller Genuine Draft 56 percent, and battleship Budweiser more than 28 percent.

Ansari is blunt in his views on the big American brewers (for scale, despite falling numbers, there were almost 34 million kegs of Budweiser brewed in 2012 to Surly’s 60,000 in 2013).
“To me, the emperor has no clothes,” he says. “I wouldn’t want to be in that boardroom—there’s nothing there. All they have is nostalgia.”

While he’s disdainful of the Goliath-scaled competition, Ansari also speaks in nothing but positive terms of his local peers in the brewing business. “Everyone’s got a different take and twist on it,” he says. “Everyone’s not trying to be the same. There’s a tremendous amount of vibrancy. I’m a rising-tides kind of guy—more breweries beget more beer culture and a beer scene. We knew that if we were successful, we wouldn’t be the only brewery in town.”

In Surly’s early days, Ansari and Haug were essentially the entire company. “In the beginning, we rebuilt the motors and the pumps, and it was him and me,” Ansari says with a hint of nostalgia. Things have changed indeed: For the first time in its history, the company is hiring a human-resources manager.

For now, Surly and the indie craft-brewing movement it inspired are at an intersection of opportunity, luck, smart business, and good taste. The macrobrewers—Anheuser-Busch and MillerCoors—might be entering their twilight. But will that translate into enough demand to fill Surly’s cavernous new facility? Its financiers seem to think so, as do many of the smaller brewers currently having trouble keeping up with demand, just like Surly in its early years.

“It’s good crazy,” says NorthGate’s Sjogren of the crowds waiting outside Twin Cities taprooms, presumably soon to spill over into Prospect Park. “But it’s crazy.”  


Comments may be edited for length, clarity, or appropriateness.

Mar 17, 2014 03:10 pm
 Posted by  jb10000lakes

Surly, I feel so lucky to have you guys right up the street (for now). I've taken you around the country and around the world (to share)over what seems like years, but it wasn't so long ago I was draggin my collection of growlers up to get refilled on Saturday mornings. Speaking of nostalgia, I hope they keep the BC taproom open once the new place opens, just for "old times" sake.

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