Surly Pushes Toward 100,000 Barrels, Releases 12-packs

Surly Brewing

Minnesota’s Surly Brewing Company showed the most sales growth among the top 50 domestic craft brewing companies last year, selling about 76,550 barrels of beer, according to data released last week by industry trade organization the Brewers Association.

Despite being the state’s third largest brewery by production — trailing mainstays August Schell and Summit Brewing, both of whom had down years — Surly’s sales increased by 23 percent over the 62,432 barrels of beer the brewery sold in 2015.

Surly founder Omar Ansari told Brewbound the growth is part of his beer company’s march to selling 100,000 barrels of beer this year.

“We’re going to grow this year by more than all of the beer that we sold in 2013,” Ansari said of the 30,000 barrels of beer he’s projecting the brewery will add this year. “The numbers are staggering. It’s unbelievable to walk around the brewery now. There’s as much beer in process than we sold in 2009.”

Ansari credited Surly’s innovation as well as the addition of national sales director Bill Dillon in May 2016 with the growth.

Dillon added a “level of professionalism” as well as a different tack to selling, with more of a focus on wholesaler relationships and metrics. It has proven to work, Ansari said.

Helping push toward the 100,000-barrel goal is the launch of 12-packs of 12 oz. cans. The company launched packs of Xtra-Citra Pale Ale and #Merica! Lager last week in Minnesota and Illinois with the other states in Surly’s footprint to follow in the near future.

By the end of the month, Surly plans to launch Hell Munich helles lager in 12-packs with flagship Furious IPA to follow in July.

“I think they will be a big mover for us,” Ansari said. The company is targeting a price point of between $11.99 and $14.99 for its 12-packs.

Surly had previously been known for releasing its beer in 16 oz. cans.

“Sales have been great out of the gate,” Ansari said, “but we have to figure out how it’s going to shake out and what the numbers are going to be as we move into other states.”

Meanwhile, Surly’s second-floor fine-dining restaurant, Brewer’s Table, will close in August. The restaurant, which was led by Jorge Guzman, a James Beard “Best Chef” finalist out of the Midwest, struggled to find an identity separate from the brewery.

“It ran its course,” Ansari said. “We should be wrapping this up with our heads held high.”

“We did a lot of the stuff that we wanted to do,” he continued. “But we probably needed to be a little busier.”

The closing is just another shakeup at Surly. The biggest shock to Surly’s internal system came last October when brewmaster Todd Haug, credited with helping build the brewery from the ground up, left the company after a decade. He eventually joined Three Floyds in Indiana.

In December, Surly named Jerrod Johnson and Ben Smith, who had both worked under Haug, as co-head brewers.

“Those two guys have notebooks full of recipes and ideas,” Ansari said.

Ansari sees innovation as Surly’s continued driving force as it grows into its destination brewery. To meet years of increasing demand, Surly has installed 16 600-barrel fermentation tanks.

“One tank is as much as we sold in our first year,” Ansari said.

As the company grows, it has slowly added to its distribution footprint. Last year, the beer company added three Midwestern states — Nebraska, North Dakota and South Dakota — to its territory, which already included Wisconsin, Iowa and Illinois. Last month, Surly expanded its Illinois distribution to statewide coverage.

Still, Surly’s home state of Minnesota remains its strongest market, accounting for 70 percent of all of the brewery’s sales.

“It’s where we sell our beer,” Ansari said. “You got to own your home market. There’s only one spot where you’re local.”

More than a decade ago, Ansari said he and Haug discussed whether to take the nascent Surly national or own their home market. They chose to model themselves after a popular neighboring-state brewery, New Glarus, which doesn’t distribute outside of its home state of Wisconsin.

“We didn’t have enough beer to go outside of our home market for the longest time,” Ansari admitted. “We were here because we couldn’t send beer to other markets.”

But while the supply wasn’t there, Ansari said he never wanted to leave his beer in the hands of his wholesaler partners without offering them sales support.

Still, the pull of national distribution is real — as is international, of a sort, as the company plans to expand into Canada soon. In the next couple of years, Ansari said Surly will explore sending its beer “a little farther away. ” But consumers’ demand for “local” has left doubts in Ansari’s mind of how much beer regional breweries can sell beyond their home base.

“I don’t think we’ll have significant growth away from home,” he said, adding that the farther beer travels from its home brewery, the harder it is to sell.

“We’ll keep growing if people want the beer,” he added. “But there comes a point where it doesn’t make sense to keep pushing forward. At some point, you have to slow down.”

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