Own a Piece of Fair State Brewing, a Cooperative Brewhouse

“Drink like you own the place.”

That’s the motto of Fair State Brewing, Minnesota’s only on cooperative brewery. By virtue of being a co-op, Fair State gives their patrons that exact opportunity — if you like their beer, you can own a part of the company that makes it.

The idea is novel in brewing, but co-ops have been around for hundreds of years. The first organized co-ops were founded over 200 years ago in Europe, eventually reaching the pitch of their popularity in America during the cultural revolution of the 1960s.

There are many types of co-ops, but the way consumer co-ops like Fair State and REI operate is like this. Instead of private business owners, there’s a democratically elected, often rotating, board that makes the decisions. Member owners pay a fee — Fair State charges a lifetime rate of $200 for an individual or $300 for a household — to be able to vote on the board and decide how revenue is distributed. Oftentimes, a portion of a co-ops profit is returned to its member owners via a refund.

“The biggest difference is democratic control by the members,” explains co-founder Evan Sallee. “It’s not an investment in the same way you’d invest in Apple where you just give them money and hope that, down the line, someone will give you even more money. It’s just becoming a part of a thing sharing in its success.”

Sallee sits on the nine-person board as President and CEO, but he must be elected by Fair State’s 700-plus member owners. People who buy in also receive discounts on drafts, special access to new brews, input on recipes, and the right to shared profits (Fair State does not distribute profits yet, though), but they don’t get to actually make any beer, which is a common misconception. From a day-to-day perspective, brewing co-ops run like any other brewery. Sallee and Head Brewer Niko Tonks have total control over the product, but the board could theoretically oust him at any point.

Most Popular

“They could theoretically fire me tomorrow,” he says of his member owners. “If we owned this outright, we could do whatever the hell we wanted, but the brewery that I started could just kick me out.”

Even though the model is ancient and becoming increasingly more popular, there are only four active breweries in America that operate as cooperatives, and Fair State was not the first. The Northeast Minneapolis brewhouse opened their doors just weeks after Fifth Street Brewpub, a co-op in Dayton, Ohio, who was similarly inspired by the original member-owned brewery, Austin’s Black Star Co-Op Pub and Brewery.

Before founding Fair State with Sallee and Director of Operations Matt Hauck, Head Brewer Niko Tonks was working in Texas. When Sallee and Hauck would come visit to discuss their dream of founding a brewery in Minnesota, they’d meet up at Black Star. It was there that the inevitable became obvious.

“It was like ‘holy shit, we need to do this,’” Tonks says. “We’d kicked around the idea of a brewery for a long time, but it hadn’t really stuck until we thought of doing it this way.”

fairstate founders.jpg
Fairstate’s three founders Sallee, Tonks and Hauck

Seattle’s Flying Bike Cooperative Brewery became the fourth cooperative brewery in August, 2015, and Sallee notes that there are “several” more in planning. But one thing that makes Fair State unique among their peers is their presence in Minnesota — a state that’s been a historic stronghold for co-ops.

“Generally, in Minnesota, especially the Twin Cities, people are willing to put their money where their mouth is, and that helps co-ops thrive,” Sallee says. “It’s really been integral to Minnesota culture for a very, very long time. There are more co-ops in Minnesota than anywhere else in the United States. It seemed like a no-brainer.”

Minnesota’s tie to cooperative culture is a result of its legacy of agricultural co-ops. As a largely rural farming state, the idea of community production and resource sharing is ingrained in the Minnesotan identity. The prevalence of ag co-ops like Land O Lakes naturally translated into a glut of local grocery co-ops, so applying the same philosophy to brewing seemed like a natural idea.

Though Black Star may have been the inspiration and Flying Bike may be the freshest face on the scene, there is no other brewery with the depth of commitment to the cooperative spirit that Fair State has. Not only do they collaborate with likeminded neighbors like Eastside Food Co-op, but they also helped to found the Northeast Brewers and Distillers Association, an organization that unites the dozens of beermakers in Northeast Minneapolis to work towards the common goal of strengthening their community. They even make their rent checks out to a co-op.

“Our landlord is actually the Northeast Investment Cooperative,” Tonks says with a laugh. “There’s nested co-ops. Co-opception.”

If every level of the business was going to foster cooperation, Sallee and Tonks reasoned, then so should the beer. Fair State’s brews are designed to be social, drawing heavily on the beer-making culture of Germany and the Czech Republic, countries where beer is made to bring people together. It’s very good beer, but in the modern brewing industry, making great-tasting beer isn’t enough to be successful. You have to give people a reason to feel invested — what better way than to actually make them investors?

“We always thought that we had to do something different than just making good beer,” Salle says, “and this was something that we knew we could leverage into something special.”