Montana town looks to co-op brewery model to help boost local economy

Even in a small business industry like craft brewing, there is a tendency to focus coverage a little too much on the big players — and growth — and having those tales of successes and failures represent “craft beer business.” But not every craft brewery can be as big as a Stone, a New Belgium or a Kona — nor should that even be the goal for a majority of the 6,000+ breweries now open. For the craft beer industry to firmly take root as the pioneering American enterprise that it is, tales like this one out of Ronan, Mont., a town of less than 2,000 people, are just as important, if not more.

Nonprofit Quarterly sets the scene: Ronan, a small town like any other, has trouble finding an economic driver to call its own in this globalized, automated world. The article paints a familiar picture of “empty Main Street storefronts.” You’ve seen these places. They exist all over the country.

Anyway, Ronan held sessions with economic developers in 2016 to try and turn this around. One of the top revitalization strategies identified? App development. Just kidding: craft beer, duh. Specifically, a co-op brewery that’s co-owned by a bunch of interested locals.

From the Nonprofit Quarterly:

In a December 2017 article, [Valley Journal reporter Summer Goddard] writes, “100 or so people gathered at a Ronan bar on a Saturday night as would-be owners of the Ronan Cooperative Brewery. The Ronan Valley Club buzzed with energy on Dec. 2 as friends, neighbors and strangers connected over a cold drink and an idea.”

…

After a feasibility study came back positive, the group filed an intent to incorporate with the state. To date, the member equity drive is going well. The December 2nd gathering itself, Tavenner writes, raised more than $26,000 “and 48 new owners signed on, tipping the total in shares sold to $52,350. As the business plan is currently written, once $150,000 in owner investment is reached, that money would be used as leverage for additional loans.”

As of mid-December 2017, Tavenner adds, “the total of all funds raised, including development funds that have been awarded the project, was more than $75,000. The number of Ronan Cooperative Brewery owners was 125.”

Don’t minimize the small-scale

This is obviously a small-scale thing — as the brewery in the end plans to employee a dozen people or so, and no one is going to get rich. Sorry if that is your barometer of success. But if craft brewery trends this decade hold true (like these insanely low failure rates) these will be stable jobs, in a stable industry — as stable as a business venture can be at least, provided the beer isn’t terrible. From a CBB article on craft brewery failure rates (the numbers are dated, but the song remains the same):

Here are the long term figures. Based on the 2013 data, 51.5 percent of the brewpubs and 76 percent of the microbreweries that have opened in the modern era (since 1980) are still open (so failure rates of 48.5 percent and 24 percent respectively). At first glance, this is a remarkable success story, far higher than rates for comparable industries/new businesses. One of the best studies I have seen on the restaurant industry found a 60 percent failure rate over a three-year period. These numbers also hint at the added complexity of running a brewpub, which essentially means running two businesses plus the synergies between them.

Back to the Ronan Cooperative Brewery, beyond its own potential, it is also very possible for this to be an anchor for the downtrodden Main Street neighborhood, and allow other similarly sized and locally focused businesses to pop up and give it a go.

Statewide, Tavenner notes that Montana has 68 craft breweries, with growth averaging roughly 13 percent per year since 2010. To date, according to Kyle Morrill, a senior economist at the University of Montana Bureau of Business and Economic Research, craft brewery growth in Montana has generated “1,044 additional permanent year-round jobs, more than $33 million in additional income for Montana households, [and] $103 million in additional sales from businesses and organizations.”

Check out the full article for more insight into the two forms of membership shares. Led by a steering committee of nine, the Ronan Cooperative Brewery is expected to launch this fall.

For a town like Ronan and for the thousands of other Ronan-esque towns out there, the craft brewery model can be an impetus for meaningful, community-minded change, that, for us at CBB, is way more exciting and impactful than wherever Amazon chooses to grab its corporate tax breaks to locate its thousands of awful, thankless jobs.