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Silicon Valley of malting: Rahr has grown alongside community

When you drive by the massive Rahr Corporation plant on the northwest edge of Shakopee, you may think you’ve hit the end of suburban development. The five-by-two-block campus looks like a grain elevator — seemingly out of place with the downtown shops, apartments and restaurants just down the street.

But for those familiar with the industry, the Shakopee malting facility is the epitome of development.

Rahr, which planted roots in Shakopee in 1935, has grown into a global powerhouse, with six state-of-the-art malthouses that germinate barley into the malt that’s likely found on the ingredients list of beers in your refrigerator.

Rahr’s headquarters might as well be the Silicon Valley of malting.

“A lot of people think malting is commodity-driven,” Jesse Theis, COO emeritus of Rahr Malting said. “But I do believe if you want to be in malting and be on the cutting edge of technology, you want to work for Rahr Malting Company.”

WHAT IS MALTING

Malt is a barley-based ingredient found in most beers. It’s created through a germination process in which barley is converted to sugars and starches so it can be used to ferment with yeast in the brewing process. The end product is akin to cereal.

“The bulk of what goes into beer is malt,” said Rahr Vice President of Marketing Jake Keeler.

Hops and water are the only other staple ingredients also found in beer.

The entire process of creating the malt requires complicated machinery and science. Throughout the past 85 years, Rahr has proven itself one of the leaders in malt creation and innovation.

Its Shakopee headquarters have six malthouses, each complete with full-time brewers and a host of brewing scientists who work in a lab brewery and research center.

“There’s probably a good chance that every brewery in Minnesota has some Rahr malt in it,” Keeler said.

STARTED SMALL

Shakopee’s Rahr Malting was founded in 1847 as a brewery in Manitowoc, Wisconsin.

When the malting headquarters moved to Shakopee in 1935, there was one malt house. And that was in the middle of the depression, said Theis, who started out at Rahr nearly 40 years ago.

“I remember the oldest employees from when I started telling me the lines to apply for jobs extended from our facility in Shakopee all the way to the bridge on Holmes Street,” Theis said.

Some of Rahr’s very first employees were Shakopee construction workers who built the original site and were able to secure production jobs at the plant. The plant was built on the backs of local community members.

Now, there are six malt houses and 301 employees.

“These are high, livable wages,” Theis said.

In the early 2000s, there became a demand for malt from smaller brewers, Keeler said.

“Breweries like Summit started to come onto the scene. We were catering towards the largest brewers in the Midwest like Budweiser, Coors, operations like that.”

Rahr realized it needed a distribution arm to bag up the malts and offer something for smaller brewers. That’s where Brewers Supply Group started.

“That’s been the growth engine to the corporation,” Keeler said.

A sixth malt house built in 2016 increased the annual malting capacity at Rahr from 390,000 to 460,000 metric tons — enough to brew about 12 billion 12-ounce cans of light beer, or six billion bottles of craft beer. At the time, that made Rahr headquarters in Shakopee the largest-capacity malting facility in the world. Theis said at full capacity, the facility is still among the top two.

“To think that within this facility we have the ability to be one of the largest production sites in the world is pretty incredible,” Theis said.

In addition to being the largest, the plant is considered among the most innovative. It produces its own renewable electrical and thermal heat through Koda Energy, and it has its own wells and water treatment facilities.

“So we can really operate autonomously, but we’ve also been a vital part of the growth of Shakopee.”

COMMUNITY-CENTRIC

Theis, who began his career with Rahr as a University of Minnesota graduate nearly 40 years ago, climbed up the ranks from a production supervisor to the COO of the entire corporation. The coolest thing about starting and finishing his career in Shakopee, Theis said, is that he is Shakopee born-and-raised.

“Imagine growing up here, going to high school here, and then getting to be in a position like this and getting to be a part of the growth of this company and this community,” Theis said. “That’s what’s really neat.”

The fondness of the Shakopee community isn’t just a sentiment shared among a handful of employees. Theis said though Rahr is a global industry leader, many of its employees are Shakopee-based.

Theis has served on the Shakopee Chamber of Commerce board of directors, has been involved with the Shakopee Academies and was heavily involved in the construction of Shakopee Area Catholic School. He said many employees headed up Scott County 4-H. And the company has a close relationship with the Community Action Partnership of Scott, Carver and Dakota Counties.

Employees have rallied together to fix up local homes for residents who couldn’t afford repairs through what used to be called Christmas in May.

“Rahr Malting sponsored a house, and we’d get the toughest, most challenging project, and we’d go there with 40 or 50 employees to do things like plumbing and roof repair,” Theis said. “Those kinds of things, for me … I feel blessed to be an employee of a company that takes the view of community involvement.”

COVID-19

The pandemic impact on bars and restaurants created a ripple effect that also affected malt manufacturers and suppliers such as Rahr Corporation and BSG.

“When all the closures came into effect, that affected restaurants, bars, sporting venues, concert venues … all the beer disappeared overnight for the sales of that beer,” Keeler said. “That channel pretty much dried up overnight and stayed that way for pretty much three to four months.”

Beer sales shifted to grocery store and liquor store sales, which helped Rahr with sales — although the company did have to lay off workers. Keeler said he did not want to comment on the number of employees laid off due to COVID-19, but he said Rahr’s sales have trended slightly better than brewery sales because of liquor store sales.

“The concepts of consistency and reliability became amplified during COVID. So being a company that’s been around during the last 70 years and having gone through the last pandemic, and prohibition, gives us that sort of stability, and I think our customers appreciated that,” Keeler said.


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Local officials outline their hopes for Highway 13's future

Major changes to the Highway 13 corridor in Savage are set to begin next year, but it’s still unclear exactly how the dominos will fall on local streets.

The Minnesota Department of Transportation is seeking environmental analysis from the Federal Highway Administration this year to study the impacts of changing the highway’s design.

The environmental study is intended to provide clearance for a wide variety of possible changes to the Highway 13 corridor between U.S. Highway 169 and Nicollet Avenue in Burnsville.

State transportation officials say seeking environmental review for a larger footprint of design options will provide flexibility when funding becomes available for future improvements — not all the of designs on the table will eventually be constructed.

Quentin to Washburn stretch

Multiple design concepts were developed for the stretch of Highway 13 in Savage between Quentin and Washburn avenues.

The avenue intersections at Quentin, Lynn, Chowen and Washburn will be studied in particular for changes.

A six-lane, at-grade “superstreet” is the lowest cost option to improve safety and congestion on the roadway.

A four-lane hybrid design would incorporate some grade-separated intersections, and a four-lane freeway option would include a mix of overpasses and grade-separated intersections.

There are several variations of both the hybrid and freeway concepts being studied.

Whether or not Lynn Avenue would continue providing access into downtown Savage is one the modifications played out in the different designs.

Dakota Avenue

All the corridor designs being studied incorporate a grade-separated interchange at Dakota Avenue, which is set to begin construction next year with funding already secured.

Under those plans, a tight diamond design will carry Highway 13 over Dakota Avenue. Eastbound highway traffic will use ramps to go to or from Dakota Avenue, and westbound traffic will use a ramp near Vernon Avenue.

The frontage road south of Highway 13 will be reconstructed with sidewalks added, and new frontage roads will be built to the north of the highway between Dakota and Vernon avenues.

Expect closures

Savage City Engineer Seng Thongvanh said it’s still undecided how traffic will be diverted during construction, but the project team met earlier this month to begin discussing possible scenarios.

A full closure of the highway is a possibility, he said, but access will still be provided to businesses.

The Highway 13 corridor has been subject to several studies and improvements over the past 20 years, but the roadway’s safety issues haven’t been resolved.

On average, 54,000 vehicles and trucks travel Highway 13 daily, according to MNDOT, and traffic counts are expected to continue to increase over the next 20 years.

A study conducted between 2014-2018 noted six Highway 13 intersections had above-average crash rates, including the Yosemite Avenue, Dakota Avenue and Lynn Avenue intersections in Savage.

Approximately 30 crashes recorded during that time frame involved heavy trucks.

Local priorities On Dec. 28, Savage Mayor Janet Williams and Scott County Commissioner Dave Beer sent a letter to state Commissioner of Transportation Margaret Anderson Kelliher and state District Engineer Michael Barnes to express their hopes and expectations for moving the broader corridor project forward.

The letter outlines more than a dozen requests related to the overall project, including a call for state planners to abandon one of the designs being considered.

“We want to be on record as having serious reservations about the viability and consistency of the superstreet option,” the letter reads, adding the superstreet proposal conflicts with past corridor improvements and the vision local and state agencies have “jointly worked towards.”

The superstreet design would widen Highway 13 to six lanes, and both add and take away traffic lights. The design would bring more continuous green lights for highway traffic, but create delays for cars entering or exiting from local streets.

The letter sent in December also says it’s “critical” that delays on the highway don’t divert regional commuters onto the local street system, and that the local street system remains accessible to local development, pedestrians and transit connections.

In the letter, Williams and Beer also expressed a city and county-level commitment to contributing financially to the project if needed.

“We have concerns that too much emphasis is being placed on developing a fiscally constrained vision, based only on MnDOT’s resources for mobility investments,” they wrote.

Next, the letter raised concerns about inadequate consideration of public transit infrastructure.

The letter requests an in-line transit station, or a multi-modal transit station concept, be developed and included in the upcoming environmental analysis, adding these concepts should include the possibility of commuter rail on the Dan Patch Rail Line.

Thongvanh, Savage’s engineer, said the city and county will be conducting further studies to better understand how the corridor changes might impact local streets.

Local officials have expressed a hope to continue providing access into downtown Savage on Lynn Avenue, and there’s other concerns surrounding how the changes will impact the viability of the downtown area.

The letter, written by Williams and Beer, said future improvements should consider aesthetic impacts to Savage, such as ramps and walls that might shield visibility of downtown.


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