Minnesota mug clubs offer free beer – for a price

For a one-time payment of $1,000, fans of Wooden Ship Brewing Co. in Minneapolis can get one free beer, a day, for life.

You can get a similar deal if you live closer to Utepils Brewing, the upcoming Hackamore Brewing in Chanhassen, or Wandering Leaf in St. Paul.

Minnesota breweries are offering more of these high-cost, high-reward memberships as the industry moves into a hyper-local era with a greater emphasis on serving and retaining neighborhood customers.

And as breweries emerge from the pandemic or grapple with start-up costs, a cash injection can go a long way.

A cut above the average cup club, these lifetime memberships are usually limited in number and sold only before a brewery opens, as was the case recently with Invictus Brewing in Blaine.

Wooden Ship, which opened in May 2021, decided the time was right to offer Mug Club 2.0.

“Right after we opened, people asked to bring it back, that they would like to be a part of it,” said co-owner Suresh Graf. “So we brought it back, by popular demand.”

Utepils Brewing, which makes European-style beers and lagers on the banks of Bassett Creek in Minneapolis, also reopened its “VIPer” program. For $1,000, customers get a free beer every day at the bar, a free growler every month, and other perks for 99 years.

“Everyone in the industry I’ve spoken to says, ‘You blow us away with what you give,'” Utepils President Dan Justesen said. “But it’s about building a community.”

Many breweries offer mug clubs, which are essentially customer loyalty programs that offer discounts on beer and merchandise for an initial or recurring membership fee and serve a limited number of people.

They are different from joining a brewing cooperative, such as Fair State or Broken Clock. Both of these Minneapolis breweries offer lifetime memberships that come with an added perk – a real ownership stake in the business.

What all of these programs have in common is a goal to increase brewery sales, often the most important part of a small brewery’s bottom line.

As more breweries continue to open, the competition for seats in taprooms is beginning to focus heavily on proximity.

“In the early days of craft beer, people were opening breweries that they hoped would be the next New Belgium or Sierra Nevada,” said Bob Galligan, director of government and industry relations at the Minnesota Craft Brewers Guild. “A lot of the craft industry these days tends to be these kinds of smaller, bustling community centers.”

Graf said trends in other brewery-rich states point to a growing focus on neighbors supporting local breweries, like what Wooden Ship promotes for its Linden Hills home.

“What happens when there’s such a high per capita brewery rate is more like, ‘There’s a brewery in my neighborhood, let’s go,'” Graf said. “There is an improvement in the community and a desire to participate locally.”

Galligan said he’s seen benefits — and prices — rise for brewery memberships in recent years. Hackamore’s Highest Beer Club membership costs $2,500.

Memberships offered when starting a brewery can help offset high start-up costs; Galligan said banks may still be hesitant to support breweries even as the United States approaches 10,000 in operation.

All that free beer is still expected to generate revenue beyond the initial $1,000. Breweries bet members will often bring a friend or stick around for a second round to help offset freebies.

“Everyone wants to fund a cool project, and it gives them the chance to come in, get their cup, the bartender knows their name — a real ‘Cheers’ mentality,” Galligan said.

Breweries are finally starting to return to 2019 production and sales volumes after the pandemic wiped out bar sales and accounts, according to the National Brewers Association, but things are still tough for many.

Due to ongoing supply chain challenges and higher costs, “even when brewers are selling as much beer as they used to, margins often remain under pressure,” Brewers’ chief economist said. Association, Bart Watson, in the group’s 2022 annual report.

Justesen can testify to this in Utepils.

“Those of us who have survived COVID are coming out with debt on our balance sheets,” he said. “People come in and see huge crowds and think, ‘You’re doing great. But the appearance of the place is different from the balance sheet.”

Income from $1,000 memberships can make a difference, even if the total sum raised pales in comparison to salary costs and ongoing ingredients. The cash infusion can help with projects that would otherwise be out of reach – Utepils used proceeds from its first run of the VIPer program to build the tapas room patio.

While some may wonder if a brewery will exist long enough to fill pint glasses worth $1,000, Justesen said the biggest concern he hears is whether future VIPs will live in the area. long-term.

One customer said he plans to tie his Utepils “MemBEERship” to his house, so if he ever moves, the next owner can enjoy the benefits.

“These are legally transferable rights,” said Justesen. “You can put it in your will, give it to your grandkids, and be the coolest grandpa ever.”