Last month the University of Montana Bureau of Business and Economy Research proved what Montanans have known for a while; craft beer is good and good for the economy.
With every pint guzzled in tasting rooms across Montana, beer becomes more than a pint between friends. It’s a developing part of Montana’s economy that generated more than $26 million in sales in 2011 alone.
While responses to the survey varied from one brewery to the next, in Belgrade, the craft beer industry is not only economically vibrant, but socially, too.
Bruce Jones, general manager at Madison River Brewing Company, came on board with the company about five years ago. Since then, he’s watched the brewery expand operations and employees.
“We have about 13 employees, not all of them are full-time,” Jones said. “It’s grown significantly. We have fill-in help in bottling, too.”
Full-time Madison River employees are given health insurance coverage and the option to add family members to their plans. The benefits and beer sales are built from the hard work of Madison River brew master Howard McMurry.
Jones met McMurry in college at Colorado State University. After graduation, McMurry headed to a future of beer brewing while Jones ran to a career in corporate America.
When the two reunited years later, the partnership was perfect, the craft beers McMurry had created, paired with Jones’ knack for numbers and business helped grow Madison River’s reach past Montana’s borders.
From McMurry and one other brewer in 2005, Madison River now features its beer in many local restaurants and across Wyoming, Idaho and North Dakota. Jones proudly boasts that the beer recently crossed the border into Canada.
“In the past two years we’ve grown 30 percent in the local market,” Jones said.
Madison River beer is delivered locally by Cardinal Distributing. Madison River is the distributor’s fourth best selling beer, an impressive feat, considering the top three spots are held by Budweiser, Miller and PBR.
While increased beer business is a good thing, Jones said getting too big is also a problem. The growth hitch has a name; the 10,000-barrel limit. State law requires breweries that make over 10,000 barrels a year to close their tap rooms and stop selling beer on premise.
Right now, Madison River is about 4,000 barrels short of that mark.
“Once we hit the 10,000 barrel mark, we can’t have a taproom,” Jones said. “Do we halt expansion and stick with this? We’ll need to look at the tap room profits.”
Last year, the Madison River taproom brought in 15 percent of the company’s revenue. More than profit, Jones says, is keeping the bulwark beer room open for loyal patrons.
“The community response has been the same since day one,” Jones said. “It’s been great. People love the low key atmosphere.”
In the next legislative session, lawmakers are slated to discuss the 10,000-barrel rule. Maybe, Jones said, just maybe, it won’t be a problem in the future.
“Hopefully the 10,000-barrel rule will change,” Jones said in the Madison River taproom Friday afternoon. “Then we can continue to expand.”
A few miles down the road in Belgrade is a smaller brewery with just one man managing the ale operation. Todd Hough doesn’t have to think about the 10,000-barrel rule, just about the slow spread of his ales in restaurants around the valley.
Hough opened Outlaw Brewing on Jan. 10 in the Bar 3 BBQ location beside the train tracks. With five beers on tap and no formal advertising, Hough started pouring pints of Hangman’s Imperial IPA, the Gambler American Ale and his other flagship brews.
With each clever name is a story and history of the beers served at Outlaw.
The Pugilist Chocolate Porter, for example, is a dark style of beer originating in London in the 18th Century. It was named for its popularity with street and river porters.
Hough said he likes to give the history of beer because it makes the craft drinking experience come alive.
“I like the concept of beer history,” he said. “So I put a bio with each beer.”
In addition to his five fixture beers, Hough rotates seasonal brews through the taproom as well.
While Outlaw’s impact in the state’s beer economy is less than Madison River, Hough is trying to source as much of his grocery list as he can in state.
“I try to get everything I can U.S. grown or made in Montana,” he said. “I try hard to source things locally.”
The malt barley for his beers comes from Great Falls. Jones said he tries to buy Montana made products, as well, but it’s difficult. According to the survey, Montana brewers reported that anywhere from two to 90 percent of their expenditures are made in Montana.
Hough said though his fledgling brewery might not pack the biggest economic punch, he offers a quality product in a different environment.
“It’s neat because we’re the only guys offering food in the tasting room,” he said. “Because we’re the smallest brewery in the valley, I feel like we have more flexibility.”
Though Hough was slow to want to grow, valley residents are catching on to the tasty marriage of barbecue and beer.
“I wanted to grow organically. I’m forever that guy that wants to ease into it,” Hough said. “With the traffic coming through the restaurant, I’ve been growing though.”
With the good news about breweries like Outlaw cropping up around the state in droves, Jones said the market may become over-saturated. At least in the little lager league.
“In terms of smaller breweries, the market might get oversaturated,” Jones said.
He’s already heard murmurs of two new brewers hoping to open shop in the Gallatin Valley. For the existing breweries, there is camaraderie rather than cutthroat competition.
“It helps us, not hurts us that there are already established tasting rooms here,” Hough said. “We try to compete with each other, for sure. But there are a lot of great guys and we’re all friendly.”
Whether there will be enough patrons to fill the burgeoning beer rooms, time will tell. Luckily, craft beers are enticing new fans every day.
“A lot of people, not just college kids or professors, are getting into craft beers,” Jones said. “People from all walks of life are trying these beers.”