Minnesota craft beer brewers feeling federal pressures

It’s been a tough time for craft beer brewers in Minnesota.

Several local taprooms and breweries have shut down this year, including Wild Mind Ales and BUCH Fermentory in just the last couple of weeks, and there’s not just one single culprit behind the closures.

Bob Galligan, director of government and industry relations with the Minnesota Craft Brewers Guild, joined MPR News host Cathy Wurzer on Morning Edition to share what he's hearing from local brewers about what’s affecting their small businesses.

The following has been lightly edited for clarity. Listen to the full conversation by clicking the player button above.

How many craft breweries has Minnesota lost so far this year?

I believe this year we are looking at currently eight or possibly nine closures. And just to give you a general idea, in 2024, we only saw seven total. So, even by May of this year, we had seen the same amount of breweries close in 2025. This will be the first year that Minnesota loses more breweries than we opened.

Historically, Minnesota has bucked the national trend that we were still seeing more openings than closings, which is very, very rare. But it appears that this year is the year that Minnesota sees the reality the rest of the nation is seeing.

What is going on to prompt these brewery closures?

Well, a whole lot, it turns out. There's not really one culprit. There are a number of things at play. Definitely rising ingredient costs, just post-pandemic, everything is more expensive. Add on top of that rising labor costs, especially coming out of the pandemic. But I think one of the factors that not a lot of people take into consideration is actually rising rent.

Rent tends to be renegotiated every seven to 10 years or so. And what happened seven to 10 years ago? A whole bunch of small craft breweries opened up in neighborhoods that are now much more expensive. So I think a lot of owners are kind of taking a step back and wondering whether or not they can continue with that rising rent. On top of that, I think there's just a general uncertainty in the markets with everything changing so consistently, throughout the day it seems, nowadays.

What about tariffs?

So, tariffs are something that we have been vocal about in opposition. It's not necessarily a policy decision. It's just, ultimately, we know how these can impact businesses, especially small businesses. Initially, when the aluminum tariffs were announced, I was getting a lot of questions as to how much six-packs would cost, or what the rise would be. And I don't necessarily think that's the story.

I think the uncertainty with the tariffs is the story — both on the Canadian tariffs, but then also with the aluminum. It's just incredibly hard to even keep track of what tariffs are on, what tariffs are off, and that's just really, really hard for any business, but especially a small business and a craft brewery in particular.

We were in Washington, D.C. two weeks ago talking about tariffs. We've been meeting with the Canadian consulate to discuss Canadian trade, but also tourism, as some of our members are up on the northern border. So there's just a whole whirlwind of things going on right now, and I think that unease and that confusion are also a part of the story.

I think some of these closings are owners who got into the business to run a small business and give a livelihood to their community, and I think they're just having a lot of difficulty. It's hard enough to run a small business, much less under these conditions.

Could these closures be viewed as a right-sizing of an oversaturated market?

I think saturation is a bit of a misnomer. I mean, ultimately, when there are more breweries in any given geographical area, obviously, there's going to be more competition for consumers. Having said that, I think across the board, hospitality is struggling. When you look at brewery numbers, we still are not seeing as many closings as bars or restaurants.

Hospitality in general has always been very, very difficult. In craft beer, we're not seeing the triple-digit growth that we did for almost a decade, that's for sure. But at the same time, I think we are more of a maturing market. We are kind of hitting a cruising altitude where now we're just kind of seeing the actual realities of running a hospitality business. I think that's part of it. But then add on top of that all the other things that the owners are dealing with. So I don't necessarily think that it's oversaturation, but I do think that it is kind of the new normal for our businesses.