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Spearfish couple revive commercial brewing in South Dakota

Jeff Drumm, pictured here, founded Crow Peak Brewing Company in Spearfish. He hopes to begin distributing his beer soon, which would make his the only brewery in the state to do so. (Becky Willuweit/For The Daily Republic)

SPEARFISH -- When Carolyn Ferrell's husband said he wanted to give up his career in cardiovascular research to start a brewery, she took it surprisingly well.

She knew how much passion he would bring to the new venture.

"Jeff is very serious about his beer," Ferrell said this week.

Turns out her faith was well-founded. Two years after opening Crow Peak Brewing Company in Spearfish, Jeff Drumm has taken on new partners, is building a bigger facility and plans to begin distribution in a few months. His plan, if successful, would make him the first South Dakota brewer to engage in distribution since 1942, according to a State Archives researcher.

For Drumm, the early success has been as satisfying as the first sip of a cold brew.

"Talking to people, hearing the appreciation they have for the beer -- it's really very gratifying, knowing that I'm doing something that people enjoy," he said.

Drumm's story may offer some of the best evidence yet that America's craft-beer craze is reaching its zenith. If he can sell his ales and porters in South Dakota -- where national trends are slow to catch on and Miller Lite, Bud Light and the like have dominated the beer market for decades -- it could be a sign that craft brewing's popularity has completely swept the country.

'It's an enjoyment thing'

The U.S. craft-brewery movement is traced by some to the 1984 founding of the Boston Beer Company. The growth in popularity of that company's Samuel Adams brand paralleled a growing appreciation for craft beers in general, and the movement pushed the number of breweries in the United States from fewer than 100 in 1980 to 1,525 today.

Ninety-seven percent of modern breweries are "craft" breweries, which are defined by the Brewers Association as "small, independent and traditional." The demand for craft beers has gotten so high that even the giants of the alcohol industry are trying to grab a piece of the craft-beer market. A prime example is Anheuser-Busch, which has rolled out new brands including American Ale and Bud Light Golden Wheat.

Craft beers are appreciated for their color, foam, smell and complex taste. As Drumm put it, "it's an enjoyment thing. It's not like a college kid is going to buy a 12-pack of craft beer and pound 'em. They're still going to go for the Budweiser." Drinking craft beer, on the other hand, is about "an appreciation of a good product."

One of the traits common to many craft-beer aficionados is an affinity for locally or regionally produced brews, and some states have a rich tradition of homegrown breweries with loyal customers. An example is Minnesota, which has 22 breweries and has produced recognizable brands such as August Schell, Cold Spring and Summit.

S.D. brewing history

South Dakota has only six licensed breweries, and none of them are currently what Ken Stewart, of the State Archives, considers "commercial" in nature. In other words, they are bars and restaurants that brew beer for their customers but do not engage in any significant distribution efforts. Drumm's Crow Peak Brewing Company has so far been limited to on-site sales, but he hopes to be selling his beer in bars, restaurants, liquor stores and supermarkets throughout South Dakota by early next year.

Stewart, who delivered a presentation on the history of South Dakota breweries earlier this month at Pierre's Cultural Heritage Center, said there were about 30 commercial breweries that operated in South Dakota following the repeal of Prohibition. The last one in operation was Dakota Brewing in Huron, which closed 67 years ago.

The reason for commercial brewing's failure in South Dakota was simple, Stewart said. Bigger, out-of-state companies with bigger customer bases expanded their sales and their advertising budgets until South Dakota's smaller brewers were pushed out of business.

"Competition was intense," Stewart said. "It was the old thing of the whale, the big fish, swallowing the smaller fish."

The most recent attempt at something resembling commercial brewing in South Dakota was undertaken by the Black Hills Brewing Company, Stewart said, which tried to distribute its Gold Nugget Beer throughout the state during the late 1980s. But the beer was actually produced in Wisconsin, and the distribution effort was short-lived.

Law change needed?

Wineries have enjoyed better recent success in South Dakota than breweries. Since a 1996 change in state law to allow farm wineries, the number of wineries in the state has burgeoned to 14, according to a list maintained by South Dakota State University.

Drumm said a change in state law might be needed to get the brewing industry going, too. South Dakota brewers cannot sell their products directly to bars, restaurants or stores for resale; instead, they are required to distribute their beer through wholesalers.

During Drumm's first two years in business, he couldn't brew enough beer to keep wholesalers supplied. He'll be able to do that with his bigger facility, but he thinks a law change might still be needed to help other brewers get started.

Stewart said he'd like to see some commercial breweries start up and succeed in South Dakota.

"Any time you have an independent spirit doing something, producing something -- whether it's food, a beverage or whatever -- a better anything is always wonderful."

Drumm's customers include several homebrewers who've expressed interest in starting their own breweries. He started his when he and Ferrell moved to Spearfish from San Diego. (She's a Rapid City native, he was a military kid who was exposed to craft beers while residing in Europe.) Upon their arrival in the Black Hills college town, she began working as a research associate at Black Hills State University and he set out to fill a portion of the state's craft-beer void.

'A choice out there to be had'

"When I first moved here and started going into supermarkets to find good beer, there wasn't much variety available," Drumm said, adding that the choices have expanded steadily since then.

Drumm didn't exactly start his brewery from scratch. He brought with him about 20 years of homebrewing experience, a craft-brewing apprenticeship, and a biology degree with an emphasis on physiology and a minor in chemistry. That minor has come in especially handy for Drumm, who spends about one day a week concocting his beer in giant vats.

He built a small brewery with a tap room in 2007, and a loyal customer base sprang up to consume such delights as Lookout Lager, Spearbeer, 11th Hour India Pale Ale, Bear Butte Brown and Pile o' Dirt Porter. Drumm and his new partners are now at work on a much larger facility and are planning to package their beers in cans and kegs. He chose cans, he said, because they're actually better for the beer than bottles. Cans keep out light and oxygen, which he said can "turn beer bad."

Freshness is expected to be a hallmark of the distribution effort.

"Being the only brewery in South Dakota that will be distributing, our beer is going to be the freshest craft-brewed beer that anybody can get," Drumm said.

He's confident that his little company will be able to snag a share of the beer market in South Dakota, and perhaps beyond.

"People are realizing that there's a choice out there to be had," he said, "and they're looking for it."