OFFICE OF ECONOMIC ANALYSIS

Reversing the Oregon Trail: A Beer Expedition

November 30th, 2016 Oregon Office of Economic Analysis

Josh LehnerDisclaimer: The views expressed here donot represent the State of Oregon, the Legislature, nor the Governor.

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Start-Ups Drive Growth

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Reversing the Oregon Trail, Pt 1

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Reversing the Oregon Trail, Pt 2

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Reversing the Oregon Trail, Pt 3

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Alcohol Is Better Than Software

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New Opportunity• HB 4146 (2016)

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Additional Work From Previous ResearchMost data through 2014 and has not been updated.

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Avenues of Growth• Increase Local Saturation

• Market penetration, multiple locations, etc• New Glarus (WI)

• Domestic Expansion• East Coast Facilities

• Deschutes (OR)• New Belgium (CO)• Sierra Nevada (CA)

• International• Brooklyn Brewery (NY)

• Mergers and Acquisitions• 10 Barrel (OR)• Calapooia (OR)• Hop Valley (OR)

Jan-06 Jan-08 Jan-10 Jan-12 Jan-140

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Brewery AcquisitionBarrels of Beer, 12 Month Moving Sum

Source: OLCC, Oregon Office of Economic Analysis

Moved Siletz 15 bblsystem to Albany

Siletz

Calapooia

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Start-Ups Drive Growth

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Lots of Little Guys, Big Dominate

• Smallest 50% of breweries produce 3% of total• Largest 10%

produce 77%• Less inequality

today than in 2005

0.0% 12.0%24.0%36.0%48.0%60.0%72.0%84.0%96.0%0%

25%

50%

75%

100%

0.6%2.9% 9.0%

23.3%

2014 Oregon Beer Production DistributionLots of Small Brewers but Large Dominate

Cumulative Percent of All Breweries

Cum

ulati

ve P

erce

nt o

f Pro

ducti

on

Source: OLCC, Oregon Office of Economic Analysis

Equal Distr

ibution

Bottom 50%

Bottom 80%

2005 2.4% 9.0%

2014 2.9% 12.0%

Note: This is Oregon-brewed and Oregon-sold beer only. Exports, domestic and international, are not included. As such, the smallest 50% produce smaller share of total Oregon beer production.

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OFFICE OF ECONOMIC ANALYSIS

Sasquatch: The Brewpub Model

Sasquatch Brewing’s growth path is stronger, but typical. Start small successful pub, grow, and add some accounts. Now expanding into ciders and 2nd location.

Even with a growing market overall, competition does occur.

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Widespread Geographic Footprint

Gorge8.9

Central Oregon5.9

South Central/Southeast Oregon1.6

Northeast Oregon3.1

Portland5.3

Southern Oregon

3.2

WillametteValley

3.5

N. Coast8.3

S. Coast2.0

Alcohol ClusterJobs per 1,000 Population (2013)U.S. 2.9Oregon 4.6

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For More Information

Josh Lehnerjoshua.lehner@oregon.gov(503) 378-4052

Social Media: www.OregonEconomicAnalysis.com @OR_EconAnalysis