Developer, social entrepreneur bet big on Finnegans' future

Social entrepreneur Jacquie Berglund quit a good job and sold her condo to start Finnegans, a beer company that has donated $1.2 million since 2003 to nutrition programs.

Berglund also has witnessed Finnegans' revenue stagnate for several years as Twin Cities specialty brewers grew from a handful to more than 100.

"We couldn't compete," she admitted. "Many other brewers have a taproom."

Now she's rolling out the barrels.

Berglund has brewed a seven-figure, multi-tap strategy designed to double beer production to up to 12,000 barrels and double revenue to more than $4 million this year.

"This will be our time," she predicted this month from Finnegans House, a $10 million, four-level brewery, taproom, social club and entrepreneurial center located in downtown Minneapolis.

Kraus-Anderson, the developer-contractor, financed and built Finnegans House as something of a social centerpiece of its $125 million overhaul of its headquarters block. It's quite an upgrade from K-A's nondescript old digs and surface parking lot.

Finnegans, located between 8th and 9th streets along 5th Avenue, is flanked on the north by K-A's distinctive new headquarters and on the south by a 165-room Marriott Hotel connected to Finnegans that is expected to open in September.

Across from Finnegans' already busy patio is the 17-story HQ apartments.

Finnegans will soon be surrounded by nearly 1,000 people who reside or work on that block alone.

Berglund, who also raised more than $1 million from three individuals to build out and equip the brewery and taproom, has managed to position her brand for significant growth, thanks to deep-pocketed partners.

Berglund will continue to contract for packaged-product sales through Badger Brewing of Shakopee. The faster growth should come from higher-margin beer sales in the taproom and other revenue streams from Finnegans House. That's also how she will make the rent to K-A.

Berglund, who long rented a small office space in neighboring Elliot Park, approached Kraus-Anderson three years ago with the idea of a hotel-brewery combination. The original K-A redevelopment plans were criticized by neighbors and city officials as too sparse. K-A, a downtown fixture for generations, revised the plans, tucked the parking underground and countered with a mixed-use development that was embraced.

"I give Kraus-Anderson a lot of credit for their vision," Berglund said. "This is their brand legacy block. It's also a service to the Elliot Park and East Town neighborhoods."

Berglund, 52, a rambunctious entrepreneur, once worked in international development and, before Finnegans, as the marketing and operations manager for Kieran Folliard's bar and restaurant business.

She always had vision and gumption. She was low on capital but big on collaboration.

"We liked Jacquie, the Finnegans brand and what it stood for," said Michael Hille, executive vice president of development at K-A. "We had the resources. There really isn't another brewery downtown.

"We created a development of complementary pieces. Our headquarters, Finnegans, the HQ apartments, and a hotel. And Jacquie raised some capital."

K-A's risk: If Finnegans doesn't work, it's stuck with a building designed for Finnegans.

"We'll take a pretty good bath if she's not successful," Hille said. "But she's done a great job and she's a good person to stand behind."

Berglund said sales are growing daily, particularly as the weather has warmed.

"Our objective is to turn beer into food," said Berglund, who works with the Food Group, the big food bank wholesaler that also supports nutrition and health programs. "We needed to evolve. We needed a brewery and taproom. There's more profit margin there. And it gives us agility. The agility to do smaller-batch brews and to try new things.

"We are the only production brewery downtown. And we're going to be attached to a hotel."

The four-story Finnegans House also features the Brewer's Den, a 194-seat private club that already has 500-plus members paying $400 to $1,000 a year in dues. Seventy-five percent of that is tax-deductible because it supports the mission.

And there's a "Finnovation Lab" that brings together for-profit and nonprofit entrepreneurs, business mentors and people with capital looking for ideas. Berglund's onsite collaborators are the Impact Hub MSP and St. Paul's Neighborhood Development Center, which trains and helps finance entrepreneurs.

Berglund brewed the expansion plan as a 2014-2015 Bush Foundation fellow, another supporter.

And she tweaked Finnegans' business model, after consultation with the granddaddy social enterprise company, Newman's Own, started by the late actor and humanitarian Paul Newman. Newman's Own donates about $30 million annually to charity with its profits derived from licensing agreements and royalties covering Newman-branded consumer foods.

Berglund, part of a social entrepreneur consortium that works with Newman's Own, moved to form a private company that owns the Finnegan brands, technology, recipes and brewing equipment and will effectively donate a percentage of sales.

"Jacquie is doing a bold and great thing that also will spawn other businesses," said CEO Robert Forrester of Newman's Own, a two-time entrepreneur himself who took over the operation in 2005.

"Jacquie has what it takes," Forrester said. "She's realistic, but also overwhelmingly positive. She is very purpose-driven by her charitable mission. She's also smart enough to know what she doesn't know."

Berglund is no lone ranger.

She gratefully mentions longtime advisers, including longtime attorney Barb Rummel, the Baker Tilly accounting firm, her Kraus-Anderson partners and a host of business and nonprofit mentors and confidants.

"I may have too much on my plate," Berglund conceded. "But I'm pretty good at connecting the dots."

So far, big backer K-A likes what it sees.

"I went in after work recently to talk to her and the Brewer's Den club was booked," Hille said. "The taproom was packed. We're excited. The whole block is going well.

Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at nstanthony@startribune.com.