Mantorville Brewing on the state of the beer industry: "This thing's going all local"

Last month Hot Dish spoke with Mantorville/Stagecoach Brewing owner Tod Fyten about the brand. Fyten currently owns three separate microbreweries (Mantorville, St. Croix, and Fytenburg) and has deep roots in the industry. His grandfather worked for Jacob Schmidt and he's been in the biz since college himself, spending time with influential brewers at Leinenkugel's and James Page before owning his own company. His Stagecoach brand is set to release all new packaging this summer on its flagships: amber ale, golden ale, and smoked porter.

We sat down with Fyten to reflect on the 1990s Minnesota brew scene and the state of the craft beer scene at present.

See also:
Mantorville Brewing: "Small breweries have to be a bit more creative"

Hot Dish: How did you first get involved in the brewing industry?

Tod Fyten: An opportunity came up to be a campus rep at St. Thomas College for the McLean distributing family. I got to represent the Pabst and the Leinenkugel breweries. The Pabst brewery was still operating so I got to see the last of the glory years of the '70s/early '80s. We had to wear the blazer and the Pabst tie -- they'd dress you up. They'd give you fistfuls of money and your job was to buy people drinks. Leinenkugel's was a pretty small brewery then, and Jake [Leinenkugel] was putting a new program in to try to expand the Twin Cities market. Then I bumped into James Page one day and that's how I got my career started in brewing in 1987.

What were your first experiences in brewing like?

My claim to fame there was creating Boundary Waters Wild Rice Beer, which was the world's first wild rice beer. I did that with Mark Hagermiller, whose dad was the executive brewmaster for Stroh's St. Paul, before that the Hamm's Brewery. It was really hard in the '80s. People thought we were crazy because, especially in the Midwest, breweries were consolidating for 15 years prior to that. But, being in the industry, we could see that there was something here and it wasn't going to go away. You saw that imports always did well and did good margins for their product. If you had local, little breweries doing things of that nature they too would be able to command that. That is why I was very excited about being in the beer business.

And then?

Then came the crash of the second half of the '90s. Stagecoach survived it, so did Lake Superior. James Page did not, and that was in a much more difficult market than today. Nationally, [the industry] had grown from 1980 to 1995 at 50 percent a year. That's pretty unheard of in any industry. In 1995, all of a sudden the slide happened. It never went flatline, but we dropped off the cliff in those four or five years. You also had a lot of people that didn't have any experience in the beer business -- they all wanted to be the next Samuel Adams.

What led to the crash?

I think the market growth caused the problem. A lot of those breweries had been there when Summit and Page started in the '80s. They went to make the leap like Summit did and they missed the other side. That brings you into the '90s. That is what affected Mantorville. They're getting started in '97 all full of piss and vinegar and then all of a sudden the industry is...puff! I knew it was getting tough but I saw that local brewing was going to become a big deal. I knew that with the right rules in place in Minnesota it would expand so make the purchases now, when things are low, and then work on making the changes to help groom you into the future. That's essentially what we did in the 2000s.

What changed from the '90s to the early 2000s?

In the 2000s you had a stable market and a lot of good homebrewers coming into the market. You started to see guys that had some good business acumen but they were also bringing in veteran, experienced people that had been in the business, and that happened across the board. Then you saw some of the rule changes. It's a good many things changing together to make the industry grow and that's where I see the good side of what's been happening.

Are you wary of another crash?

I don't see the market growth collapsing like it did in the '90s but we probably only had 1,000 to 1,500 breweries. We have, right now, 2,600 breweries in the country. You're spreading that growth so there's going to be a flattening for the individual breweries: You're only going to get so big. Now you go into a regional brewery that says we're going to sell to Wisconsin, North and South Dakota, Iowa, maybe some in Illinois/Chicago, but the problem is that they're doing that in Wisconsin, they're doing that in Iowa with their own breweries. This thing's going all local.

So what is the future of Minnesota beer?

I think you're going to start seeing a larger Minnesota cooler being developed representing every beer sold in the state. Now it's kind of the "flavor of the month" club but eventually what's going to happen is they're going to say, "We just don't have that much shelf space so we're just going to focus on those brands that are local beers."

One of the concerns I have -- the old guard brewers, the guys who have got through the regional gauntlet like Summit -- they're going to survive and they're going to grow and expand and they'll remain large regional breweries. They've largely worked down that debt. For these other guys, where are you going to sell that beer?

Do you feel that pushes other people out?

No, because I think people like to go to small, local breweries. I think consumers want variety and they want to go visit. Obviously in a small, local brewery you can't have a lot of debt load but we get people that love to come to Mantorville because it's a quaint little town. People like to go to things like that.

So are taprooms the hope for small breweries?

Do I think a brewery can survive as a taproom and that kind of experience? Yes, and I think we'll see more of them. That's that flattening of the curve that I'm talking about. We might see another 20 of these in the Twin Cities. In Minnesota we'll see another 20 breweries in the next three to five years, easily.

The bigger thing is when you're starting to build bigger breweries. Some of these will become nationals like the New Belgiums of the world, some of these will become regional, but the further you go up the food chain, the tougher it gets. Let's use the 1930s to the 1980s: Why did Leinenkugel's, Schells, Huber, why did these survive? Because they weren't regional breweries. In an overall general sense, they were local breweries that served their local market.

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