Surly CEO Omar Ansari battles declining beer sales
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Surly Brewing CEO Omar Ansari is adjusting to a world where people drink less of his beer.
Flashback: Surly was at the forefront of a beer revolution in Minnesota about a decade ago and Ansari's lobbying to change state regulations helped pave the way for an explosion of taprooms.
Yes, but: He now finds himself battling for market share and tap handles with the competition he helped create, while also trying to navigate a changing adult beverage industry that is flummoxing both him and other brewers.
By the numbers: Surly was among the fastest-growing breweries in the U.S. 10 years ago but is now brewing 37% less beer than it did five years ago.
State of play: Some of what happened to the Minneapolis-based brewery is due to macro trends, as 29 of the 50 largest craft breweries in the U.S. reported declining sales in 2022. Locally, Summit Brewing and a dozen of the other top 20 breweries in Minnesota also reported declining sales last year.
- Alcoholic seltzers and canned cocktails have exploded, while consumption of craft beer has stagnated or declined.
- Surly now competes in a state with more than 200 breweries, up from 50 in 2012.
Zoom in: But Surly also faces unique challenges. Ansari is still suffering the consequences of closing his massive Minneapolis brew hall in the winter of 2020-2021 when he cited Covid for eating away at profitability.
Between the lines: Labor organizers accused him of attempting to block a unionization effort that was underway when he announced the closure.
- "I don't think it's helped (sales)," he told Axios, adding that he gets people at liquor stores who will decline taste tests because of the union issue.
- Ansari notes that those employees eventually voted against forming a union.
- And Unite Here Local 17 withdrew an unfair labor practice charge. "There wasn't union busting going on here," he said.
Plus, the brew hall was a popular after-work meeting spot for groups wanting a halfway point between the downtowns of St. Paul and Minneapolis, he added. With remote work, the location has become less central.
What he's saying: Ansari is coming to grips with the fact that his business idea from two decades ago — largely to just make good beer and meet payroll — won't work on its own anymore.
- "We opened this place to make beer, but if people are going to be buying the THC stuff, I guess we've got to make some products that hopefully they're excited about and want to drink."
- In addition to making four varieties of THC seltzer and other nonalcoholic beverages, Surly has also begun contract brewing for other companies to make up for declining sales of its own beer.
What's ahead: While Furious remains Surly's best-selling brew, the company is hopeful about two fast-growing brands: the One Man Mosh Pit Hazy IPA and its Surly Lemonade beer.