What the Craft Brewing Boom can Teach Other Local Industries: Part 2

Marty Walsh is a Strong Towns member and community and business development specialist based in Chatfield, MN. Today, he's sharing the second article in a series about the rise of craft brewing and what it means for other small industries. Read Part 1 here.

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Source: Bill Dickinson

In Part 1 of this series, I identified some reasons that craft breweries have bucked the trend by moving an industry smaller and more independent instead of bigger and more centralized. Now let's talk about why they are also making headway in small and isolated communities. Why is it that there is a brewery down the road from me in Fountain, MN, a town of 400 people that, until recently, didn’t even have a liquor store? Or in the Pullman neighborhood of Chicago, about as far as can be from anything one would call “trendy” or “bustling”? Or in New Glarus, WI, a town of 2,200 people in the middle of nowhere that hosts one of the country’s most prestigious and sought after breweries — also a top 50 producer of beer in the nation despite only being sold in one state?

There are a few important things that small towns and underdeveloped neighborhoods provide to breweries, and possibly to other artisan manufacturers.

Small Towns & Breweries: A Valuable Partnership

The first thing many towns can offer breweries and businesses is cheap, quality real estate — often in highly visible locations with unique architecture that contributes to branding and image. Few small towns have zoning laws that categorize a brewery as industrial, and in those that do, the chain of command is short enough that a single concerned business owner can make a difference. This is evident in the placement of so many small town main street breweries, grain elevators, meat lockers, and even some of the artisan industrialists we’ll discuss below .

In an industry where the product is often served off site and there is a proven culture of traveling for the “event” of consumption, there are fewer and fewer arguments not to take advantage of the cheap costs to reduce your risks. Even as a business expands and a Main Street location might not fit the entire production apparatus, a smaller, more isolated community is more likely to have nearby, inexpensive developable land where additional production could take place. Even just being in that Main Street location, where car speeds are slowed down and there are people likely walking, provides benefit to a no-name beer.

New Glarus Brewery in New Glarus, WI 

The isolated location itself can provide excellent branding opportunities as well, including unique partnerships with other businesses in the community that have no one else to collaborate with in the space. A connection to local farmers who often not only surround small towns but also are an integral part of the community can provide access to novel and high quality raw ingredients.

And what do these breweries provide to small towns?

An occupied main street is a crucial front door to the community. The more unique the occupant, the better. This appearance can further drive business to other downtown operations, multiplying the jobs, tax base, and cultural benefits provided by most businesses.

Breweries have also proved to be gathering places for the community, special enough to be more than “a bar” and cool enough to be more than the local community center.

How Other Industries can use the Craft Brewing Model

The good news is that the elements which have coalesced to make craft brewing successful across America can also provide inroads for other industries. Many of these may not get to the fine-grained and pervasive level of craft beer, but they can be a local aspect of the average consumer's life in a far bigger way that they are today. Moreover, they can go a long way toward localizing the economy overall to strengthen our communities. Here are a few areas where I see opportunity:

• Fiber and Textiles: Spinning yarn, dyeing, weaving textiles and sewing are hobbies to some and massive enterprise to others. There are many metrics for the product and millions of variations to make a unique product. This includes better growing and processing of raw ingredients including wool, linen, hemp, cotton or polys (including bio-based polyesters). There are people already working in this space to localize, from Ewetopia Yarns in Wisconsin to Huston Textiles in California to Taproot Fibre Lab in Nova Scotia, all hoping to bring small production at reasonable prices to our small communities.

• Canned and Frozen Food: The biggest hangup here may be the regulatory cost and the equipment, both of which can be solved through innovation to bring the means of production to smaller vendors at lower costs. Pressure canners, acidity testing, pasteurization and other features of food processing all can be modernized, shrunk down and made more affordable. The “local” aspect should be a given asset here.

• Pottery/Ceramics: Pottery is an artistic venture with practical use that can be produced on a large scale without losing its unique touches. Increasing the accuracy of kilns and modifying designs to allow for more efficient loading or other steps in the process would help many producers achieve goals of wider distribution. Motawi Tiles of Michigan, while not often in the price range of the average consumer, has demonstrated how art can be blended with technology, a trend that could go much farther.

Source: Kim Nowacki

Other industries that may have room to downscale and localize include IT, leather (tanneries that can be profitable at a smaller scale may absorb waste in smaller cattle raising areas), furniture and woodworking, and even glassblowing. It will depend on how much these industries can get out of technology to bring costs in line with acceptable prices at the appropriate size.

Perhaps the most important thing about these businesses is the way they occupy a creative space that can pay living wages at a time of automation and artificial intelligence. This means they can provide “future proof” jobs that any given factory probably cannot provide. The ability to recognize how a new color yarn or a rare variety of carrot might sell with proper marketing is not something that can be done quickly in a large firm, and certainly not at a scale that can be trialed without risk of significant capital loses. Business owners that understand and can navigate these type of risk-mitigating practices and incremental growth are the sorts of citizen leaders we desperately need in our communities.

So what can we do to encourage these sorts of businesses to grow? The first step is to recognize that it’s not about growing only in our town, but growing anywhere; it is easier to follow in someone else’s path than to trailblaze, and other locations may be better at taking the initial risk.

The next step it to recognize that, as MIT Economist Erik Brynjolfsson said on the Marketplace Podcast Robot Proof Jobs: “Entrepreneurs will be one of the jobs of the future.” We need to alter our education system and cultural expectations to teach that it’s not only okay to take the risk to go out on your own, but it is to be encouraged. Once we start to do that, our communities can take accurate inventories of what we actually have and understand what industrial opportunities are out there by engaging with the regional entrepreneur and craft cultures. This may be a time to look into what historically succeeded in the community, although towns shouldn’t feel bound by their history either.

I don’t expect to be purchasing every article of clothing or homeware from a local producer who made it with their own two hands using all local materials any time soon. Nor do I think we should. But there is immense value to having local artisans creating a local identity, circulating more money locally, and improving the local quality of life.

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ABOUT THE AUTHOR

Marty Walsh is a Community and Business Development Specialist for the firm Community and Economic Development Associates of Chatfield, MN. Marty has worked or volunteered in Community Development and Small Business Development for the last 8 years, including as the Executive Director of the Main Street program in Mason City, Iowa. His academic background also includes finance and economics, and his professional background includes sales and consulting in the alcoholic beverage industry. He has been a Strong Towns reader for many years. Marty lives with his wife and daughter in rural Rochester, MN. Follow him on Twitter at @serialhobbyist1.