Running Tap’s core business is pretty straightforward. Customers order beer from Twin Cities craft breweries. Running Tap delivers it to their homes.
Running Tap launched in 2016 with three breweries: Clockwerks Brewing, Lake Monster Brewing and Northbound Smokehouse & Brewpub. Today, the company delivers more than 200 beers from just under two dozen local breweries.
Brothers and co-founders Isaac and Moses Tut say that they are not only the sole business offering craft beer delivery in Minnesota, but one of just a handful in the entire country. Why are there so few? Isaac, the company’s CEO, said that local liquor distribution laws often make it difficult to get a business like Running Tap, well, up and running.
Isaac, Moses and Chris Ho, Running Tap’s third co-founder, spent six months researching the state’s laws before officially launching the business. Today, they also work with Hop Law, a Minneapolis-based law firm that represents microbreweries and distilleries.
Isaac had been working with Ho on another project when the two came up with the idea for Running Tap. They often ordered food together, but found that ordering beer was more complicated.
“It proved to be very difficult,” Isaac told Minne Inno. “We started looking into why that was, and realized how hard it was to get through some of these brewing regulations in Minnesota.”
Alcohol delivery is nothing new. Apps like Bite Squad offer delivery services from local liquor stores, and have been doing so for some time. Delivering craft beer or anything produced by a small brewery, however, is another story. And to understand why, we need to briefly tap into Minnesota’s liquor laws.
Over the last several years, Minnesota – much like the rest of the country – has experienced a craft beer boom. Over the last decade, the state has gone from having around 30 breweries to more than 100. The catalyst for change locally was one of the state’s largest independent breweries, Surly Brewing.
The Surly Bill, passed in 2011, allowed breweries to serve beer on site in their tap rooms. Minnesota’s most powerful liquor lobby, the Minnesota Licensed Beverage Association, came around to the idea eventually, but originally opposed the legislation because of its potential effects to the state’s three-tier distribution system.
A lot of states have this three-tier system. Manufacturers make things like beer; wholesalers distribute that product to retailers, which then sell it to the public. Running Tap aims to circumvent the system by delivering beer right from the manufacturer to the public. The company doesn’t mark up the beer, but charges a small delivery fee and asks for tips. The company also charges the breweries a fee of its services, depending on how much it delivers for them.
“We’re almost in a gray area where there isn’t any legislation,” Moses said. “There’s still some restrictions, but it’s basically a loophole in the three-tier system.”
Minnesota has made a handful of modifications to this system over the past several years. Nevertheless, Running Tap has been careful about how it navigates Minnesota’s alcohol laws – even as it thrives in its gray areas.
“Most people were kind of scared of the idea at first, just because of how restrictive the system can be,” Isaac said. “But our idea is an easier sell now. Some of the original people who said no to us have since come back.”
Running Tap’s three co-founders were fans of the local craft beer scene before launching the company, but had not worked in the industry. Moses, the company’s vice president of strategic partnerships, has previously founded two businesses. Ho was an international banker before joining the company. Isaac holds degrees in physics and aeronautical engineering, and had been working for a local tech company before founding Running Tap.
Moses said that the company is currently developing an app for its services. As Running Tap continues to grow, its co-founders hope to add make deliveries from more breweries, and possibly expand its offerings to craft distilleries.
“People love craft beer, and we want to connect them to their favorite breweries,” Isaac said. “One of our favorite tag lines is ‘We’re sorry, but your living room is now a tap room.'”