Lift Bridge Brewery’s first expansion tripled its size — the Stillwater startup moved from a one-car garage to a three-car in 2007.

Six years later, the craft brewery resides in a nearly $2 million, 11,000-square-foot building in a light-industrial office park. It’s on pace this year to produce about 6,000 barrels for nearly 1,000 bars, restaurants and liquor stores. The brewery, with regional aspirations, doubled the number of fermenters in the past two years and still can’t keep up with demand.

“We are working to produce as much beer as people are interested in and what’s selling, and right now, it’s more production constraint,” says Dan Schwarz, CEO and one of the five founders at Lift Bridge, which does no traditional marketing and turned a small profit for the first time in 2012. “You have to take a step back … and think about all the accomplishments you’ve had, which are pretty cool and humbling.”

With Lift Bridge as a prime example, the growth of craft brewing in Minnesota has been pretty hot and boasting.

The amount of suds produced in the state in 2012 skyrocketed with an 80 percent increase in barrels over 2011 — the second highest jump of any state in that period, according to the Brewers Association, a national trade organization.

With about 50 craft breweries — more than double the amount in 2011 — Minnesota became the No. 10 craft beer-producing state, the association said.

And with passage in 2011 of the state’s taproom law, or the “Surly bill,” allowing breweries to sell pints on site and with the upswing of an overall “locavore” movement to consume more locally produced food and drink, brewers and industry insiders are raising their glasses to what looks to be a growing future.

COPIOUS COMPARISONS

Statistics suggest that craft brewing has more opportunities:

— Minnesota brewed 308,000 barrels last year. Wisconsin, at No. 9, brewed nearly 25 percent more at 398,000 barrels, the Brewers Association said.

“More and more consumers are aware or are becoming aware of craft beer,” Schwarz said. “I think the pie is getting bigger for everyone.”

— Minnesota has a craft brewery for every 112,000 residents and a craft beer market share estimated at about 10 percent, said Dan Justesen, president of the Minnesota Craft Brewers Guild. Meanwhile, Bend, Ore. — a town nicknamed “Beervana” — has a craft brewery for every 9,000 residents and traditional light beers are in the minority, said Visit Bend spokeswoman Tamra Fenske.

“We are rebounding from two generations of thinking flavorless beer is normal,” Justesen said.

— The number of craft breweries in the U.S. now exceeds 2,300 — more than at any time since the 1880s — and another 1,600 breweries are in planning stages, the association said.

“Five breweries were supported in the Stillwater area” in the mid to late 1800s, said Brent Peterson, executive director of the Washington County Historical Society.

VORACIOUS VERMONT

Vermont has more craft breweries per resident than any state — one for every 25,000 residents — and a major contributor is the state’s mature locavore lifestyle, said Kurt Staudter, executive director of the Vermont Brewers Association.

Vermont also tops the Locavore Index, a state-by-state ranking compiled by Strolling of the Heifers, an organization that annually examines Census figures and government data on farmers’ markets and other local food channels. (Minnesota ranked 16th.)

“We are the Disneyland of beer,” Staudter said. “It’s huge in Vermont.”

Like Minnesota, Vermont has seen a doubling in craft breweries in the past few years. However, Staudter said an overall concern is the lowering of standards as the craft beer market becomes more crowded.

“My biggest fear is that someone just getting introduced to the craft beer market is going to have some beer at places that aren’t making a quality product,” Staudter said. “But right now, I don’t have that problem.”

But another concern for craft brewers has affected Vermont.

Production numbers in Vermont decreased 2.5 percent in 2012 from 2011 — one of only two states to dip. That fact prompted “The New Yorker” magazine to suggest “that perhaps the state is hitting its saturation point — that states, like people, can eventually have enough beer.”

Not so fast, Staudter says. The decrease was attributed to the removal of Vermont’s largest craft brewer, Magic Hat, from the production data after its parent company was sold to a private equity firm last year. This means Magic Hat is no longer considered a “craft brewery,” according to the Brewers Association, which partially defines craft brewers as independent — or having less than 25 percent ownership from a non-craft-brewing company.

“We are nowhere near the saturation point here in Vermont,” Staudter replied.

ENTER THE BIG GUYS

But the sale of Magic Hat provides an example of broader threat: acquisitions of craft brewers by outside companies or big brewers such as Anheuser Busch InBev and SABMiller, who combined control an estimated 80 percent of the beer market.

Growth numbers exemplify the possibility of acquisitions. Overall volume of U.S. beer consumption grew 1 percent to about $99 billion in 2012 — the first increase since 2008. Meanwhile, craft beer volume has grown 15, 13, 12, 7 and 6 percent respectively from 2013 back to 2008, the brewers association said.

“When their brand isn’t selling, they buy a different brand,” Justesen said, referring to the makers of Bud, Miller and Coors. “The macro beer brands are starting to buy craft beer because there is no growth in their markets.”

One recent example is Chicago’s Goose Island brewery, which was purchased by Anheuser Busch for $38 million in 2011. Could Minnesota’s darling craft brewers, Summit or Surly, be next?

“It’s a question of what our plans are for our future,” said Mark Stutrud, owner of Summit Brewing. “Certainly we have had some equity bankers from the East Coast sniff around and there have been other parties that have been interested in Summit, but we are determined to stay fiercely independent, and in fact, we continue to be more and more employee-owned.”

St. Paul-based Summit, a privately held Minnesota corporation, will buy back stock from shareholders looking to sell and, for the last nine years, has put those shares into a plan for employees to purchase, Stutrud said.

Yet the sale of some craft brewers is inevitable, Staudter, of the Vermont Brewers Association, countered.

“It’s only a matter of time before some of our breweries get gobbled up by one of the big brewers.”

To Justesen, the biggest threat to craft brewing is not acquisition, but competition. What if the big brewers were to commit to making more flavorful, craft-like beer?

“They have the best brewing technology, the best access to supplies, the best cost structure, the best distribution,” Justesen said. “If they want to make great beer, they will make tons of great beer and sell it for a third of what we can.”

Another concern is action at the Legislature and in Washington, D.C. The possibility for increased excise taxes on a national level could be a negative, Schwarz said.

Working the halls of government was not an anticipated duty when the small-business CEO started seven years ago. But it’s why Lift Bridge and a group of other small breweries banded together to form the Minnesota Brewers Association and hired a lobbyist earlier this year.

“I think that government regulation can both help and hurt,” Schwarz said. “So if (the lobbyist) sees anything that they think we need to be aware of, we can talk about it and address it.”

‘IT’S BUSINESS’

An internal threat to craft brewing in Minnesota also exists.

“It’s bad management, lack of capital; it’s business,” said Justesen, who purchased Vine Park Brewery in St. Paul in 2004 with his business partner and head brewer Andy Grage. “Some are going to be more successful than others.”

Take Vine Park, which, Grage says, is now the country’s oldest brew-on-premise, or BOP, operation. A BOP is where customers brew their own batch on site, return a few weeks later to bottle it and take it home. In a sense, it’s a personal craft brewery — where the beer is made solely for the brewer to drink and share with friends. Through the years, BOPs experienced a relative boom, but also a bust — something craft brewers hope to avoid.

When it opened in 1995, Vine Park was one of a dozen BOPs in the U.S. In the late 1990s, BOPs grew to about 125, but since have fallen to fewer than a dozen, Grage said.

“The brewing business is not a get-rich-quick scheme,” Grage said. “If you want to make a small fortune in the brewing business, start with a large fortune. It’s a lot of work. You are working with a perishable product, and it’s a market that you have to find your niche.”

A number of business models are being explored to find that niche: from breweries as regional distributors (Summit, Surly, Lift Bridge), to taprooms (Pour Decisions, Dangerous Man), and contract breweries (Cold Spring) and microbreweries (Flat Earth, Indeed). Some, like Lift Bridge, are trying multiple business channels. Lift Bridge has a taproom, but it provides only a fraction of sales.

And customers are exploring, too. Visitors to Vine Park on West Seventh Street have asked about beer varieties such as Bavarian Hefeweizen and oatmeal stouts, something unseen 10 years ago, Justesen said.

“In 1995, if you wanted a good craft beer, you could go get a Summit, a Summit or a Summit, or you could come to Vine Park and brew one, or if you knew someone, you could get Town Hall,” a brewery in Minneapolis, Justesen said. “You had to go find it. Right now, if I don’t like a beer, I don’t finish it. I leave it.”

And more and more craft beer varieties are coming out of each brewery. Beyond Lift Bridge’s flagship beer, Farm Girl Saison, it produces four year-round beers and up to 10 seasonal styles. Vine Park, which produces about 150 barrels a year and sells it in growlers, has about eight flavors.

“We thought one or two -1/8flavors-3/8 would be too much, but people are very educated,” Justesen said.

But more isn’t better, Justesen added. Differentiation is the deciding factor.

“You are going to have to have a reason to pick up your IPA over his IPA or her IPA,” Justesen said, referring to the “India Pale Ale” variety common among craft brews.

“Is it your flavor? Marketing? Your physical location? Or are you the brewery closest to me? There is going to be people that are going to have trouble. The low-hanging fruit is gone.”