Craft beer is huge right now. Like the maker movement and the thundering return of farmers markets, we as a society are embracing local ingenuity as never before.

In South Dakota, the engine of the craft beer movement has been West River, where more than a dozen companies are creating and selling their own brews. East River, the momentum has been a bit slower, but is now picking up.

2015 has brought two beer companies with similar goals, but vastly different business models to our tap lines and grocery shelves. Fernson Brewing Company, a full-production brewery, began distribution in March. Two months later, Hydra Beer Company, which operates as a contract brewery, came on the scene.

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“We take our recipes to what we feel is a qualified brewery to do what we want to do, and we contract with them brew what we want. We’ll work with ‘X brewery’ here, but that’s not where we’re necessarily going to stay,” said Hydra co-owner Chad Petit.

And although that means brewing out of state right now, Petit and his business partner Nick Murphy say that doesn’t make their beer any less local.

“We’re two guys who are born and raised in South Dakota who love beer,” explained Petit. “Our business is in Sioux Falls, South Dakota. That’s where we’re at home and where our product ultimately is. The reason we ended up having to go out of state is because there’s not a brewery in South Dakota that could do what we wanted them to do. We couldn’t hit full bottling with a brewery in South Dakota. The goal, is to someday be able to do it all here.”


“Right now, with as popular as craft beer is, it’s about finding tank space,” added Murphy. “Finding where someone is willing to work with you, but also has the capacity to work with you. If and when we do grow, it’ll be South Dakotans that hold those jobs.”

(submitted by Hydra Beer Company)
(submitted by Hydra Beer Company)

The model employed by Hydra is a relatively low-risk one, which allows Murphy and Petit to continue their full-time jobs, while growing their company. Across town at Fernson, however, owners Derek Fernholz and Blake Thompson, are going full steam ahead.

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Fernson’s cavernous north Sioux Falls facility has the capacity to make up to 3,500 barrels of beer every year, with room to expand. When they met, Fernholz and Thompson were each home brewers working on individual business plans, but after meeting several times to compare notes, they decided to join  forces.


Read the full article in the June issue of 605 Magazine, or click here.

Try Fernson and Hydra beers at the 605 Summer Classic all-South Dakota beer tasting June 20. For more info, click here

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