LUCAN, MINN. — For one family in one small town in southwestern Minnesota, the answer to the economic-development question comes in four parts: water, yeast, hops and barley.
Since 1998, Dustin Brau — yes, the German word for beer is really his last name — and his extended family have been successfully making and selling craft beer from the small town of Lucan, population 220.
Brau Brothers beers are distributed in five states, mostly in Minnesota. Dustin and his brothers Trevor and Brady, along with their father, Dale, take advantage of lower costs in their hometown and a degree of fix-it-or-make-it-yourself ability that’s well known to any farmer.
“Lucan helps us differentiate ourselves,” Dustin told me during my recent visit to the 5,000-square-foot brewery. “It’s genuine and legitimate. And we put ‘Pop. 220’ on everything we can.”
Began as a brewpub
The company started as a brewpub and five years ago became a microbrewery. It also leases a 3,000-square-foot warehouse in Lucan, and it has five full-time and 10 part-time employees. It has produced an average 1,500 barrels of beer per year and is on track to double that output by the end of next year, Brau said. About 40 percent stays in the state, with the rest shipped to the Dakotas, Iowa and Wisconsin.
The brewery, in a single-story barn-red building on the edge of town, evokes memories of the end of the 19th century, when more than 100 brewers dotted the state in villages small and large. At least three were here in Redwood County.
Prohibition shuttered fermenters from coast to coast, and after the ban was lifted, giant Twin Cities brewers such as Grain Belt, Hamm’s and Schmidt captured the market in Minnesota, along with a few local operations at Cold Spring and Schell’s in New Ulm.
The Brau Brothers are part of version 3.0 of the Minnesota craft brewing movement, along with fellow mid-2000s start-ups Surly and Flat Earth. Their prototypes began in the mid-1980s with Summit and James Page, followed by batch 2.0 in the 1990s, including the now-defunct Ambleside and Glacial Lakes.
All were looking for a niche in the specialty category, which makes up about 6 percent of the beer consumed in the country but is the only growing segment.
“Our biggest challenge is finding our place in the market, but we have a thousand little challenges every day,” Dustin said, as his father sat nearby fixing a keg; in the brew house, a nephew and another employee jackhammered two new drains.
Watching costs, keeping flexible
Cost control is a constant concern, and a pencil and eraser might be their most important tools. All Brau equipment was purchased used — eBay here, bankruptcy there — and modified to fit. For example, the pasteurizer came from a deli in Kansas City, the bottler from a New York brewery and the labeler from Germany. The six fermenting tanks used to live in Baltimore.
An eraser is used for adapting the business plan. “You can’t be afraid to take a chance in a small town and do something different,” Dustin said. “But outline everything in pencil because you don’t know what forces will affect you. It’s a combination of being flexible and sticking your neck out.”
My colleague Dave Brennan at the University of St. Thomas Opus College of Business, who keeps an eye on small businesses, said finding potential markets is critical for a place like Brau Brothers. “On the other hand, small, local breweries are a novelty effect and prospective customers are frequently searching for new beers,” he said.
Hundred Yard Dash dashes off the shelves
At the Ale Jail liquor store in St. Paul, Adam Schulte keeps an eye on craft beers. A couple of weeks ago, he received a shipment of five cases of Brau Brothers Hundred Yard Dash, a fresh hop ale so named because of the distance from the Lucan hop field to the brew house. “We got five cases in on Friday afternoon and by Saturday they were sold,” he said.
“Places like the Ale Jail are critical to our business,” Brau said. Among other things, they help Brau maintain a toehold in the Twin Cities market.
Hundred Yard Dash is Minnesota’s nearest thing to an estate beer, with many of the ingredients grown on the six-acre Lucan site. But craft-beer drinkers are a finicky bunch; brand allegiance enjoyed by larger brewers is less fierce as they search for the Next Hoppy Thing.
The small-town origins might overcome that, Brennan said. “One thing about small companies from small places is the loyalty factor. This is something they can trade on,” he said.
(The disadvantage of a small town, along with the hard work of brand recognition, is, well, its size. “It’s hard to convince the wife of a brewer to move here,” Dustin said. And, as with any small town, “if you make a mistake everyone knows about it.”)
From light to hoppier
The beer-rating websites tend to like the stronger (read: high alcohol) products from the Braus and are less disposed to the lighter-flavored and lower-alcohol brews, which can be more popular with the casual drinker.
“We made [lighter] beer when we started for the southwest Minnesota market,” Dustin said. “If they had tried our [hoppier] Sheep Head beer first thing, that would have been the end of it. But we got ’em on our side and we then pushed the limits a bit.”
The economic-development question has multiple answers, and not just casinos, ethanol plants and nursing homes. In Lucan, it’s beer.
Mark Neuzil writes about the environment, agriculture and Greater Minnesota for MinnPost, and teaches journalism at the University of St. Thomas in St. Paul.
Although this is a great human interest story, it would have been very helpful to other people thinking about starting up their own new small business enterprises to comment about how the Brau family have financed their operations, especially in these times when banks are so reluctant to lend money for anything that might seem even remotely risky.
I have NO doubt that there are many people out there with great ideas who would like to plow those ideas into new money-making ventures, which is the REAL key to job growth (most jobs being created by NEW small business startups).
What they’re lacking is the know how to gather together a group of their friends and neighbors as startup investors or find other interested individuals from whom they can gather the resources needed to get a new business off the ground, not to mention how they can best provide for their own health care needs and those of their employees without bankrupting themselves (which is a far BIGGER problem than any tax burden they might have).
First, let me ask where can I purchase this new brew in the Twin Towns? I love home-grown, home-brewed beers.
Second, to Mr. G. Kapphahn’s remarks[#1], the Brau folks are just getting started, perfecting their craft techniques, and slowly perfecting their production and distribution methods. Their great ideas and brewing skills are coming to fruition and maturation the old fashion way hard with hard work, gained experiences, and love of their craft. This is the bedrock foundation to any great business endeavor.
Third, I have no doubt they are slowly getting their families and friends involved in this endeavor. As they find their way and markets the Braus will find or obtain the necessary capital to expand and prosper. The last thing the Brau brothers need is to expand beyond their means, markets, and production capabilities.
Fourth, last but not least, let’s let the Brau brothers continue to grow at their own rate. As their brand becomes further known the market will seek them out. Positive hopes, astute planning, diligent marketing, and progressive sound business thinking will help them weather this Great Recession.
I have no doubt their brewing efforts will be successful and their business will truly get off the ground. The taxes, health care benefits, and other extraneous business costs should be taken care of with due diligence to details and cost effective measures to expenditures. The Brau family is doing their business, again as noted, the old fashion American business way. There is no doubt that they will succeed in time.
I wish the Braus luck and Good Fortune. In the meantime, where can I get one their ales to enjoy?
Response from the author: Two good questions… a list of TC outlets can be found on the Braus’ website, including the Ale Jail in St. Paul. Second, Dustin told me that the state bank in Lucan was the key element in the company’s financing. “Without them we’d be out of business,” he said. So local financing was critical in this case.
For #2, I know I picked up a variety 12-pack of Brau Brothers at Chicago Lake liquors in Minneapolis. Or just check the website like the author said.
Great article, I always like reading about beer and local businesses!
I live just 30 miles from Lucan and have attened the Brau Bros Hops Fest a couple of times. These guys are a great bunch, and the same goes for their beer. When they started distributing, local bars in the area began carrying their beer on tap. I love suggesting it to people who visit out here on the prairie because we can say “yeah, they make that just down the road.” It’s something a lot of us are proud to have out here!