Growing to meet the energy needs of the craft beer industry

By: Great River Energy staff

Across the country, small craft breweries are giving new life to old industrial neighborhoods. They are helping revitalize local economies and attract additional investments. This trend is certainly playing out in Minnesota, where craft breweries had an estimated economic impact of more than $2 billion in the state in 2017.

While the largest concentration of the state’s nearly 200 breweries is currently in the Twin Cities metro area, more breweries have cropped up throughout Greater Minnesota in recent years. This trend is expected to continue, and Great River Energy and its member-owner cooperatives are prepared to play an important role in the industry’s growth.

According to the Electric Power Research Institute (EPRI), craft breweries are one of the fastest growing customer segments for utility providers. Since the process of brewing is predictable, yet energy intensive, breweries represent good potential members for co-ops.

Several of Great River Energy’s member co-ops – including Connexus Energy, East Central Energy (ECE) and the McLeod Co-op Power Association (MCPA) – are developing relationships with breweries in or near their service territories.

New opportunities for partnership 

Invictus Brewing Company and Garphish Brewing Company recently opened in Blaine and Bethel, Minn., respectively. Both are in Connexus Energy’s service territory.

Invictus Brewing Company has an auspicious location across the street from National Sports Complex in Blaine, which attracts more than 4 million visitors a year. The 15-barrel brewery’s taproom opened in May 2018 and can seat more than 200 people.

Garphish Brewing Company is a considerably smaller venture, with a 3-barrel brewhouse and 85-seat taproom. But its location in a renovated historic building in Bethel is serving as an important community gathering place in the town of less than 500 people.

Eric Kruzan is manager of business accounts and energy services at Connexus Energy. He noted that the co-op’s interactions with the larger operation, Invictus Brewing, will help inform its future efforts in working with breweries in its service area.

Connexus Energy had some initial discussions about electric end-use technologies for water heating and refrigeration with the brewery. Invictus hasn’t been around long enough to accurately determine its energy footprint. But Kruzan expects to connect more with the brewery regarding potential energy savings and heat reclaim opportunities soon.

“We will reconvene with the owners mid-year to discuss potential opportunities for efficiency improvements,” he said.

Significant growth potential

ECE Business Accounts Specialist Rodney De Fouw said he sees the craft beer industry having a positive impact on rural areas, bringing in entrepreneurial energy and creating jobs.

ECE has developed a strong working relationship with its member Beaver Island Brewing Company in St. Cloud, which was recently named one of the fastest-growing breweries in the country. The brewery opened in early 2015 and has already expanded significantly. It opened a 10,000-square-foot brewing and canning facility in June of 2017 and now distributes throughout most of Minnesota.

With such a large production, having a steady and reliable flow of energy is critical. ECE provided expertise and technical support through the brewery’s expansion process and continues to work with the brewery on ways to help the brewery save money and increase efficiency. Learn more about Beaver Island’s relationship with ECE from this video (4:47): https://www.youtube.com/watch?v=x83Q0u0XPlw.

The craft beer boom has also created agricultural opportunities in Minnesota. Mighty Axe Hops was an early entrant into the Minnesota hop-growing industry. What started as a college project has since grown to become one of the largest hop growers in the state.

The business is located in Foley, Minn., within ECE’s service area. Though farms don’t typically require a lot of energy, Mighty Axe Hops is an exception. It has a production facility to pelletize, refrigerate and store their hops products onsite. A relationship with ECE will ensure the business is aware of opportunities to save and reclaim energy as the business continues to grow.

Co-ops as a good neighbor  

It’s common for Great River Energy’s member cooperatives to actively participate in the economic development of their local communities. What happened in Glencoe, Minn., is a good example of this practice in action.

MCPA recently sold a building in Glencoe that was no longer meeting its needs, to a brewery looking to grow. Lazy Loon Brewing Company, which focuses on producing German-style beers, was established in 2014. The brewery had been operating in Victoria, Minn., but was searching for a larger space to suit its expansion plans.

Glencoe’s economic development director approached MCPA before the co-op put the former Agri-Fleet building on the market, with a suggestion that it may be a good fit for the brewery. MCPA’s Sue Pawelk noted that the co-op was pleased to find such a buyer for the building.

“It was exciting to see another business that wanted to come in and employ people and bring something to Glencoe, as opposed to just using it as a storage warehouse,” she said.

The brewery plans to open its new facility in early 2019. Though the building lies outside of MCPA’s service area, it fits with the general co-op “concern for community,” in which co-ops work toward sustainable development of their communities.

Great River Energy and its member co-ops look forward to seeing continued growth in the craft beer industry.

“We will strive to stay up to date on the industry’s energy usage issues so we can be ready to assist developing or expanding breweries in our service territories with gap financing, technical support and rebates,” said Tom Lambrecht, Great River Energy’s manager of economic development services.