Craft beer industry slows, but opportunities exist
PORTLAND — Oregon’s craft beer industry is slowing down after a decade of explosive growth, but a state economic analyst says the outlook is good for neighborhood microbreweries.
Josh Lehner, of the Oregon Office of Economic Analysis, gave that outlook in remarks to the annual meeting of the Oregon Brewers Guild in Portland last week, the Capital Press reported.
The number of breweries in Oregon jumped from 76 in 2006 to 218 this year, and there’s fierce competition for a limited number of tap handles and shelf space. Flagship Oregon beers such as Deschutes’ Black Butte Porter, Widmer’s Hefeweisen and Ninkasi’s Total Domination IPA can be found in bars and restaurants all over the state, Lehner said, but the state’s five largest breweries now sell only 20 percent of their beer in Oregon.
He said demand remains strong, and there are still many parts of the state and country that are lacking in neighborhood brewpubs.
“For these smaller breweries, I think the outlook is bright,” Lehner said. “The brewpub model works.”
Medium- to large-sized Oregon breweries should be looking to sell out of state, Lehner said, but that’s complicated by the fact that the Pacific Northwest no longer has the market cornered on tasty, locally sourced microbrews. Good local beer can now be found all over the country, and consumers often prefer to support local businesses rather than out-of-state breweries, he noted.
Lehner said Pacific Rim nations are a good target market for Oregon beer, as they are for many other products.
About half of Oregon beer exports now go to Canada, 17 percent to Japan and about 5 percent each to China and South Korea, Lehner said.
He acknowledged the strong U.S. dollar hurts sales: A $10 six-pack here costs $13 overseas. But Lehner said currency exchange rates often fluctuate, and a devalued dollar may serve as a market tail wind for Oregon beer.
“The path forward is really about reversing the Oregon Trail,” he said. “There is just too much competition and market saturation to be able to reach large production numbers by relying solely on Oregon consumers.”