(St. Paul, MN) – Summit Brewing Company Founder and President, Mark Stutrud, discussed the brewery’s expansion at the recent St. Paul Summer Beer Festival.

Summit broke ground on a $6 million expansion last November, several months before it originally planned to due to rapid growth in market demand. To illustrate, production increased 8% to 112,450 barrels in 2012 and could have rose higher if not for capacity constraints it encountered last summer. The latest phase of the expansion wraps up soon.

To recap some expansion highlights, the brewery reported the following back in November…

Although we have been quietly investing an annual average of $1.7 million into the brewery over the past 10 years, this is the most ambitious expansion since the building of the new brewery back in 1998. The truth of the matter is that we have hit the wall on capacity. The brewery had to cut 12 brews this year due to capacity issues, so the original expansion date of June 2013 had to be moved up to this month. The current capacity of the brewery is 120,000 barrels (bbls) a year.

The $6 million expansion will increase our production capacity to 240,000 bbls a year. The addition of 7,632 square feet of cellar space and twelve 600 bbl fermentation vessels will be completed by June 2013. We are partnering with some great Minnesota companies: DCI in St. Cloud is fabricating the tanks, our general contractor is Burnsville-based PCL Construction Services, and our engineering/architecture firm is Van Sickle, Allen & Associates out of Plymouth.

New Tanks

Stutrud touches on a lot of those same points though he clarifies that they are adding 800-barrel tanks (not 600-barrel tanks). Each tank holds four brews out of the 150-barrel brewhouse. The 200-barrel overage in each tank, as Stutrud explains, is for krausening. Six of the twelve tanks are in place and Summit brewed into them for the first time earlier this month. The other six will arrive soon.

Summit is currently brewing 3-4 times a day, five days a week, and can increase that with the new tanks.

New Cellar

The new cellar space can hold two dozen tanks so the other 50% of the space will be reserved for future expansion up to 360,000 barrels of capacity. It will be highly automated compared to its existing cellar where brewers have to do things manually (like lug hoses around) and feature new-to-North America equipment from Pentair. The valve tops have LED lights when they are in-use, need maintenance, etc.

Other tidbits…Summit added a centrifuge and separator last year, moving away from Diatomaceous Earth. The brewery added a sheet filter for additional ‘brilliance,’ primarily for lagers.

Extra Space:

Summit bought property next to its front plaza where it plans to add an outdoor beer garden next year that overlooks the Mississippi River (3.5 acres and 38,000 square feet?). If the brewery passes 300,000 barrels and gets uncomfortably close to that 360k-bbl capacity mark, it can add a second brewhouse in that additional area.

New Distribution:

Summit accounts for only 2.3% market share in the state of Minnesota. Stutrud looks to push up to 5-6% and grab market share away from the big companies.

On that note, Stutrud says focus will remain on Minnesota and neighboring states like Iowa, Wisconsin and North Dakota. They will remain careful and selective with new distribution partners. Stutrud jokes that they won’t be impeding on Stone’s territory in San Diego or doing big tap takeovers.

There is some availability in the Dallas/Fort Worth area and Florida where Summit partnered with JJ Taylor (JJ Taylor has Minnesota and Florida branches).

New Beers:

One of the twelve beers that Summit discontinued in 2012 was Hefeweizen though the brewery did replace it with a Kolsch. That beer “took off like a rocket” and Summit brewed more than double what initially projected. Summit also introduced Saga IPA around the same time and that beer was equally as successful. This year’s big new introduction is the Union Series which kicked off with Meridian, a Belgian-style Session Ale.

Stutrud also discusses the Unchained Series which started over four years ago. The series allows Summit’s eight brewers to flex their creative muscle and design one-off beers that go into bottles and kegs for distribution. It isn’t a marketing-driven thing says Stutrud. The individual brewers have complete control of the brews and there is no budget for them. The latest to get approval in the series is an English-style IPA called Another IPA.

Coincidentally, Summit just received yet another label approval for an English-style IPA, True Brit IPA.

Taxes:

Finally, Stutrud drops a big nugget toward the end of the talk that he has heard that the proposed beer tax increase will return in the next session with an even bigger increase proposed. The most recent bill, which was squashed, called for a 600% increase in state excise taxes on beer.

On the flip side, Summit and nearby Schell’s, just won back a $115,000 annual small brewers tax credit that it was disqualified to receive after passing 100,000 barrels in production.