State of Micros in Oregon
Posted: Mon Apr 18, 2005 10:48 am
Don't know if many are interested here but I thought I'd reproduce an article from the Oregonian talking about the state of the beer market in Oregon.
Oregon brews bubble while giants are flat
Thursday, March 31, 2005
JOHN FOYSTON, The Oregonian
Sales may be flat at the nation's biggest beer companies, but they continue to be frothy for Oregon's fast-growing craft brewers.
The state's predominantly small breweries sold 18.3 million gallons of beer in 2004, nearly 10 percent more than 2003, and craft brewers nationwide posted a 7 percent gain, making it the fastest-growing segment of the beverage alcohol industry.
Total sales by U.S. beer companies, dominated by mega-brewers such as Anheuser-Busch Cos., fell 1.6 percent during the year. Counting imports, overall beer sales nationally inched 0.6 percent higher.
While the biggest brewers continue to merge and consolidate and reposition themselves in response to lackluster sales, Oregon brewers and brewpubs are in many cases taking advantage of their good fortune to increase production and revamp facilities.
"It's a pretty heady market," said Jim Parker, director of the Oregon Brewers Guild. "It's extremely upbeat because all segments are up -- it's hard to find bad news anywhere."
Cascade Lakes Brewing Co. may have reported the best news of all, selling twice as much beer in 2004 as it did a year earlier.
The Redmond company doubled its production last year to almost 75,000 gallons and grew to become the eighth-biggest brewer in the state. The company also opened the Lodge, a new 6,000-square-foot flagship restaurant and taproom in Bend. It's the company's fourth pub, said partner Chris Justema. "We're really a hospitality company that happens to own a brewery," he said.
Two breweries, actually. After the Lodge opened, the company closed and razed its original retail outlet, the Seventh St. Brewhouse. When it reopened, it was freshly remodeled and bigger, plus it now has a small brewing system -- an Oregon law allows brewpubs to supply beer to only one subsidiary pub without going through outside distributors.
Even with the added production, the brewery is hard-pressed to keep up with demand these days. "When our Portland distributor asks for 100 units," said Justema, "We'll send them 75 -- they understand that we have to keep our area supplied first."
All Oregon's 70 or so beer-making facilities are considered "craft breweries," a catch-all phrase for regional, microbreweries and brew pubs that avoid generally low-cost corn, rice or sugar fillers common in mass-produced beers.
The craft segment nationally accounts for just 31/2 percent of the beer market -- Anheuser-Busch and Miller Brewing Co. spill more beer in a year than American craft brewers produce, according to the Brewers Almanac. But in Oregon, craft beers account for 11 percent of all beer sold and 38 percent of draft beer sales, the highest percentages in the country.
According to Oregon Brewers Guild figures, craft brewers directly employ 3,000 people and provide thousands more jobs in distribution, retail, agriculture and supply. All told, the guild estimates that Oregon craft brewing has an annual economic impact of $2.24 billion.
This is not the industry's first growth spurt. Craft brewing took off like a bottle rocket in the mid-1980s. But sales flattened a decade later, and the bursting of the beer bubble left some companies saddled with expensive new breweries that couldn't pay for themselves. In Oregon the shakeout led to the closure of several breweries, including Star Brewing, Nor'Wester and Saxer.
Recent growth has been more manageable, said Parker. He said he's not worried the latest increases will somehow lead to another spate of over-optimism.
"In the first boom, everybody figured the sky was the limit," he said. "Anybody who went through that time knows that there are clouds up there. There were some people with really grandiose visions as craft brewing took off. I think that everybody is much wiser now."
Gary Fish, president of Deschutes Brewery in Bend, agreed. "Thanks to that learning curve, the beer is better, the companies are better and the marketing is better now," said Fish.
Deschutes' sales grew more than 13 percent in 2004, to almost 4.2 million gallons. That number was partly the result of recent investment at the brewery to open some production bottlenecks.
Capital improvements include a new, larger German-built brewing system, upgrades to the bottling line and lab, new malt silos and 40,000 square feet of new warehouse space. Fish said that by adding fermenting tanks as needed, the company should be able to meet demand for several years to come.
Other signs of the good beer times in Oregon:
Widmer Brothers increased production in 2004 by almost 10 percent to 6.17 million gallons and brewers are brewing as many as nine 7,750-gallon batches of beer five and six days a week. "We're running at nearly current capacity," said vice president Rob Widmer.
Full Sail Brewery in Hood River recently overhauled its labels and graphics. The new look is less corporate, more quirky and, thanks to old postcard images of Oregon and the Columbia Gorge, emphasizes the sense of place that's one of craft beers' strongest selling points.
Portland-based BridgePort Brewing's production grew by 6 percent this year, to 1.3 million gallons. The brewery has bolstered its fermentation capacity and in late 2004 embarked upon a year-long $3-million revamp of its brewery pub, one of Portland's first. The makeover will include a real restaurant, an atrium, an upstairs bar and meeting rooms.
Production at Rogue Ales in Newport grew by more than 33 percent, to 1.2 million gallons. "We didn't add geography in 2004," said Rogue Ales president Jack Joyce. "International sales were down, we raised prices by 5 percent and we didn't have any new products. What's happening is that more people are taking our beer off the shelf."
Joyce said "The industry as a whole is up." He reckons that Rogue's main brewery has sufficient capacity for the next several years, and the company recently opened its second satellite brewery -- a brewpub in Eugene that joins one opened five years ago in Issaquah, Wash. In 2003, Rogue opened its San Francisco Public House, bringing the tally to four pubs and two brewpubs -- plus a micro-distillery making rum at the Portland pub on Northwest Flanders Street.
Terminal Gravity grew by nearly 30 percent to more than 72,000 gallons in 2004. The Enterprise brewery is bottling for the first time -- rather than selling only at the tap. Its draft beers continue to be popular in pubs around the state, which is why partners Dean Duquette and Steve Carper went to Northern California to buy a larger brew system and mechanical plant -- all five semi-loads of it -- from a closed brewery there.
"We had to make a decision last June whether we wanted to keep growing," Carper said, "and we decided that we did." The new system will permit the company to brew 560-gallon batches instead of the current 155 gallons. That will make a big difference, Carper said. "Right now, we must be the busiest five-barrel brewery in the state -- we did 22 brews in one recent week."
The boom continues unabated in the Portland area: Amnesia Brewing opened last year, Roots Organic Brewing Co. opened earlier this month, and at least three more brewpubs are scheduled to open later in 2005.
The New Old Lompoc Brewery in Portland has trouble keeping up with demand as it supplies its own brewpub and a sister establishment, the Hedge House, which opened in late 2003. "For the last six months, we've always been out of at least one of our three most popular beers," said co-owner Jerry Fechter.
He's been looking for space for a new, larger brewery, boutique distillery and full service bar for more than a year, but remains philosophical. "I guess if we can't brew enough beer, we're doing something right."
Oregon brews bubble while giants are flat
Thursday, March 31, 2005
JOHN FOYSTON, The Oregonian
Sales may be flat at the nation's biggest beer companies, but they continue to be frothy for Oregon's fast-growing craft brewers.
The state's predominantly small breweries sold 18.3 million gallons of beer in 2004, nearly 10 percent more than 2003, and craft brewers nationwide posted a 7 percent gain, making it the fastest-growing segment of the beverage alcohol industry.
Total sales by U.S. beer companies, dominated by mega-brewers such as Anheuser-Busch Cos., fell 1.6 percent during the year. Counting imports, overall beer sales nationally inched 0.6 percent higher.
While the biggest brewers continue to merge and consolidate and reposition themselves in response to lackluster sales, Oregon brewers and brewpubs are in many cases taking advantage of their good fortune to increase production and revamp facilities.
"It's a pretty heady market," said Jim Parker, director of the Oregon Brewers Guild. "It's extremely upbeat because all segments are up -- it's hard to find bad news anywhere."
Cascade Lakes Brewing Co. may have reported the best news of all, selling twice as much beer in 2004 as it did a year earlier.
The Redmond company doubled its production last year to almost 75,000 gallons and grew to become the eighth-biggest brewer in the state. The company also opened the Lodge, a new 6,000-square-foot flagship restaurant and taproom in Bend. It's the company's fourth pub, said partner Chris Justema. "We're really a hospitality company that happens to own a brewery," he said.
Two breweries, actually. After the Lodge opened, the company closed and razed its original retail outlet, the Seventh St. Brewhouse. When it reopened, it was freshly remodeled and bigger, plus it now has a small brewing system -- an Oregon law allows brewpubs to supply beer to only one subsidiary pub without going through outside distributors.
Even with the added production, the brewery is hard-pressed to keep up with demand these days. "When our Portland distributor asks for 100 units," said Justema, "We'll send them 75 -- they understand that we have to keep our area supplied first."
All Oregon's 70 or so beer-making facilities are considered "craft breweries," a catch-all phrase for regional, microbreweries and brew pubs that avoid generally low-cost corn, rice or sugar fillers common in mass-produced beers.
The craft segment nationally accounts for just 31/2 percent of the beer market -- Anheuser-Busch and Miller Brewing Co. spill more beer in a year than American craft brewers produce, according to the Brewers Almanac. But in Oregon, craft beers account for 11 percent of all beer sold and 38 percent of draft beer sales, the highest percentages in the country.
According to Oregon Brewers Guild figures, craft brewers directly employ 3,000 people and provide thousands more jobs in distribution, retail, agriculture and supply. All told, the guild estimates that Oregon craft brewing has an annual economic impact of $2.24 billion.
This is not the industry's first growth spurt. Craft brewing took off like a bottle rocket in the mid-1980s. But sales flattened a decade later, and the bursting of the beer bubble left some companies saddled with expensive new breweries that couldn't pay for themselves. In Oregon the shakeout led to the closure of several breweries, including Star Brewing, Nor'Wester and Saxer.
Recent growth has been more manageable, said Parker. He said he's not worried the latest increases will somehow lead to another spate of over-optimism.
"In the first boom, everybody figured the sky was the limit," he said. "Anybody who went through that time knows that there are clouds up there. There were some people with really grandiose visions as craft brewing took off. I think that everybody is much wiser now."
Gary Fish, president of Deschutes Brewery in Bend, agreed. "Thanks to that learning curve, the beer is better, the companies are better and the marketing is better now," said Fish.
Deschutes' sales grew more than 13 percent in 2004, to almost 4.2 million gallons. That number was partly the result of recent investment at the brewery to open some production bottlenecks.
Capital improvements include a new, larger German-built brewing system, upgrades to the bottling line and lab, new malt silos and 40,000 square feet of new warehouse space. Fish said that by adding fermenting tanks as needed, the company should be able to meet demand for several years to come.
Other signs of the good beer times in Oregon:
Widmer Brothers increased production in 2004 by almost 10 percent to 6.17 million gallons and brewers are brewing as many as nine 7,750-gallon batches of beer five and six days a week. "We're running at nearly current capacity," said vice president Rob Widmer.
Full Sail Brewery in Hood River recently overhauled its labels and graphics. The new look is less corporate, more quirky and, thanks to old postcard images of Oregon and the Columbia Gorge, emphasizes the sense of place that's one of craft beers' strongest selling points.
Portland-based BridgePort Brewing's production grew by 6 percent this year, to 1.3 million gallons. The brewery has bolstered its fermentation capacity and in late 2004 embarked upon a year-long $3-million revamp of its brewery pub, one of Portland's first. The makeover will include a real restaurant, an atrium, an upstairs bar and meeting rooms.
Production at Rogue Ales in Newport grew by more than 33 percent, to 1.2 million gallons. "We didn't add geography in 2004," said Rogue Ales president Jack Joyce. "International sales were down, we raised prices by 5 percent and we didn't have any new products. What's happening is that more people are taking our beer off the shelf."
Joyce said "The industry as a whole is up." He reckons that Rogue's main brewery has sufficient capacity for the next several years, and the company recently opened its second satellite brewery -- a brewpub in Eugene that joins one opened five years ago in Issaquah, Wash. In 2003, Rogue opened its San Francisco Public House, bringing the tally to four pubs and two brewpubs -- plus a micro-distillery making rum at the Portland pub on Northwest Flanders Street.
Terminal Gravity grew by nearly 30 percent to more than 72,000 gallons in 2004. The Enterprise brewery is bottling for the first time -- rather than selling only at the tap. Its draft beers continue to be popular in pubs around the state, which is why partners Dean Duquette and Steve Carper went to Northern California to buy a larger brew system and mechanical plant -- all five semi-loads of it -- from a closed brewery there.
"We had to make a decision last June whether we wanted to keep growing," Carper said, "and we decided that we did." The new system will permit the company to brew 560-gallon batches instead of the current 155 gallons. That will make a big difference, Carper said. "Right now, we must be the busiest five-barrel brewery in the state -- we did 22 brews in one recent week."
The boom continues unabated in the Portland area: Amnesia Brewing opened last year, Roots Organic Brewing Co. opened earlier this month, and at least three more brewpubs are scheduled to open later in 2005.
The New Old Lompoc Brewery in Portland has trouble keeping up with demand as it supplies its own brewpub and a sister establishment, the Hedge House, which opened in late 2003. "For the last six months, we've always been out of at least one of our three most popular beers," said co-owner Jerry Fechter.
He's been looking for space for a new, larger brewery, boutique distillery and full service bar for more than a year, but remains philosophical. "I guess if we can't brew enough beer, we're doing something right."