Four Firkins stores close as craft beer goes mainstream

Jason Alvey opened his first Twin Cities craft beer store in St. Louis Park in 2008 as a way to share his passion for craft brews. Six years later, the native of Australia expanded the business and opened a second Four Firkins store in Oakdale.

Along the way, Alvey and his staff forged a sense of community with customers through their willingness to share their "beer geek" knowledge, frequent social media posts and an e-mail newsletter with more than 19,000 weekly subscribers. Customers, in turn, demonstrated their loyalty by contributing more than $41,000 in an online crowdfunding campaign for the Oakdale store, which opened last September.

But while the expansion into the east metro market added much needed business, Alvey said, the Firkins couldn't overcome the mounting toll that increased competition, changing buying habits and the reconstruction of Hwy. 100 took on the St. Louis Park shop.

Amid financial pressures, Alvey, after meeting with business advisers and seeking other investors and options, announced in late June that he had decided to close both shops.

The stores stopped selling gift cards on June 4 and stopped honoring them after Alvey announced the closings. While that move frustrated a number of customers, Alvey said he had no choice because gift cards are an unsecured form of credit.

"We're all very proud of what we've done," he said recently. "We had some really good times and made a lot of friends. We changed some thinking in this industry. Ironically, we're part of the reason why a lot of the liquor stores are now carrying all the craft beer. So in that respect we kind of hurt ourselves."

Alvey said that the St. Louis Park shop in particular faced a growing number of competitors offering more craft beer, from independent shops to corporate, warehouse and big-box liquor stores.

"Two years ago they carried almost no craft beer and now all of them carry 80 percent of what we carry," Alvey said.

Over time, savvier consumers didn't seem to need as much education from Firkins about microbrews, Alvey said. Some now save up for monthly warehouse or big-box buying trips instead of making weekly purchases.

Road closures related to the Hwy. 100 project also dramatically slowed business in St. Louis Park.

"Essentially, in the last six months, we saw a rapid decline of business in St. Louis Park that was unsustainable," Alvey said. "At this point, a beer-only specialty store like this is no longer sustainable. I don't want to own a normal liquor store. My passion is craft beer.

"Somebody said to me, 'Why don't you just start carrying mass-produced beer?' That's not what we're about. Then we're just another liquor store. Why work so hard if it's not something that we're passionate about?"

Marketing professor Dave Brennan, director of the University of St. Thomas' Institute for Retailing Excellence, said he agreed with Alvey that the Firkins model no longer was viable.

"The craft store is getting nickled and dimed from all directions," Brennan said of increasing competition, including breweries selling growlers, or 64-ounce refillable jugs of beer. Breweries in Minneapolis and a number of other cities also can now sell growlers on Sundays, when liquor stores are closed.

Still, Daniel Mays, co-owner of Stinson Wine, Beer and Spirits in Minneapolis, said he was "shocked and saddened" that the Firkins had closed.

"When we opened our store, Jason Alvey was very supportive and wanted to help in whatever way possible, to try to continue what they've been doing, which is supporting and growing Minnesota craft beer culture and awareness and appreciation for craft beer in general," Mays said.

Louis Dachis, owner of Ace Spirits in Hopkins, said the Firkins helped inspire him to take a more distinctive approach with his craft beer and whiskey boutique.

"I always really had a lot of respect for Alvey and what he was doing there," Dachis said. "He was at a very good place at a very good time and had the right passion. As with all things, everybody else sort of caught on to the idea. It became more and more difficult for him to differentiate himself."

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com