ELY — It’s not immediately obvious what tariffs on imported goods have to do with a small-town museum dedicated to a Northwoods legend. But for the Dorothy Molter Museum, the connection runs straight through bottles of homemade root beer.
The museum, which honors Dorothy Molter, the beloved Root Beer Lady who lived on Knife Lake for 56 years, has watched production costs for its signature product climb eight percent since tariffs began affecting supply chains last year. While that increase may not seem like much, it’s squeezing a local nonprofit organization that depends on root beer sales for 60 percent of its $300,000 annual operating budget.
“We’re making less on our beer now than we did last winter,” said Jess Edberg, executive director of the museum, “and it’s continued to decrease.”
The price increases began in late January 2025, when the museum’s supply chain started experiencing disruptions. Despite all packaging and flavoring being made in the United States, tariffs on imported raw materials and increased domestic demand drove costs upward.
The culprits? Raw ingredients for the proprietary root beer syrup that must be imported because they aren’t grown domestically, and materials like those used in cardboard boxes that lack adequate U.S. sources. Meanwhile, American manufacturers are overwhelmed by customers trying to avoid tariffs by sourcing domestically.
The museum raised prices starting in May, but there’s a ceiling to what consumers will pay.
“We can only raise our wholesale and retail prices so much before the consumers won’t pay that much for it,” Edberg explained.
The financial pressure has forced the museum to adopt a conservative budget for 2026, pulling back from its typical 10 percent annual growth target to approximately five percent. That means cuts to advertising, staff wage increases, and retail inventory for the gift shop, which is the museum’s second-biggest revenue source.
The museum has also noticed visitors tightening their belts. While attendance remained steady last year, average spending per person in the gift shop dropped 30 percent. Customers bought lower-priced items or chose one souvenir instead of two.
“If that continues and things get a little bit harder, things get a little bit more expensive, whether it’s root beer or hotel rooms or meals at a restaurant or gas prices, that’s going to have a ripple effect that’s going to hit not only the Dorothy Molter Museum but every other place in town that relies on visitors to our community,” Edberg said.
The museum’s paid internship program, which trains the next generation of museum professionals and Northwoods preservation stewards, could also be at risk if financial pressures continue. The program provides hands-on experience in managing a small museum for undergraduate students, graduate students, and recent graduates.
“If I have to eventually cut back on the amount of interns or eliminate that program entirely, then we lose the individuals that are able to conduct programming,” Edberg said. “And then we lose additional benefits to coming to visit the museum.”

A grassroots legacy
The Dorothy Molter Museum came to Ely through a grassroots effort to salvage artifacts and preserve the legacy of a woman who became a Northwoods icon. From 1934 to 1986, Dorothy Molter lived on an island on Knife Lake, eventually becoming the last permanent non-Indigenous resident of what became the Boundary Waters Canoe Area Wilderness.
She was famous for her hospitality and her homemade root beer, serving thousands of paddlers who stopped at her homesite on Isle of Pines. After her death, volunteers dismantled her two cabins and transported them to Ely, where they were rebuilt as the museum that opened in 1993.
Today, the museum produces root beer based on Dorothy’s original recipe in small batches six to eight times a year, coordinating with a contract brewer and distribution partners. The beverage serves as both a revenue generator and a vehicle for raising awareness about Molter and the Boundary Waters area.
In addition to maintaining the museum itself, the nonprofit offers extensive free programming to the community.
Edberg emphasized that the museum takes no political stance on tariff policy.
“We’re a nonprofit history museum. We are not involved in political action or activism,” she said. “In sharing the story, it was no kind of endorsement or lack thereof of anything.”
Despite the challenges, Edberg isn’t worried about the organization’s immediate survival.
“If you’re just looking at the bottom line number-wise, we will get through this,” she said. “But if you look at the bigger picture and the broad effect that some of these economic policies are having, that’s concerning.”
The museum also faces the loss of the Ely Marathon this year, which had been its second-biggest fundraiser. The organization operated a beer tent at the event, and finding a way to fill that revenue gap adds another layer of financial pressure.
The museum’s annual fundraising dinner is scheduled for Saturday, Feb. 7.
For more information, to become a member, or to donate, visit rootbeerlady.com.