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Revealing just how strong the craft brewing industry is in the Northwest, recently released figures from the Oregon Liquor Control Commission indicate that the state's craft brewery sales are an incredible 8.9 percent, with the majority coming from the state's popular local breweries. Widmer Brothers leads the state's craft breweries, selling 34,880 barrels for 1.59 percent of sales and ranking eighth after the megabrewers. Anheuser-Busch leads sales with 699,802 barrels for 31.2 percent, Pabst at 366,953 barrels or 16.6 percent is second, Coors with 335,097 barrels and 14.9 percent is third, and Miller is fourth with 257,634 barrels and 11.6 percent. Oregon's consumers demonstrate a fiercely parochial support for local breweries. The figures show that with one exception (Hart Brewing of Seattle), four well-respected out-of-state breweries (Hart and Redhook of Seattle, and Sierra Nevada and Anchor in California) comprise a small percent of state sales. Hart, surprisingly, is the second largest seller in the state, coming in at 25,044 barrels and 1.12 percent of overall sales. Oregon consumers also support the state brewers' organized and public disdain for contract brewers. Boston Beer and Pete's make up only 0.35 percent of sales in Oregon. California's leading craft breweries, Anchor and Sierra account for an even smaller amount, a measly 0.13 of total sales. Beer Sales in Oregon (Click here to view chart) A View from the Oregon Brewer's Guild Two industry representatives offer insights into this impressive share of the state's sales. Jerome Chicvara has two opinions, one as president of the Oregon Brewers Guild and another as founder of Full Sail Brewing. "Speaking as president of the Oregon Brewers Guild, in my opinion, the sharpest forecaster I've read is Bob Weinberg. He says that blue sky estimates nationally are as high as 5 percent in the near term and maybe eventually as high as 10 percent. Based on that analysis, Oregon already is in the promised land. We clearly represent the upper limits. The question for Oregon is, can we get into double digits? The compeition is going to get more fierce, and it will be a challenge to reach that next level. "The Oregon Brewers Guild would agree that in places like Oregon or Portland, we'll push 10 percent, while some areas of the country will push zero. What that means for brewers across the country is that they have to figure out which markets will support those levels -- six, seven, eight, or even ten percent," he said. "You have to know where the fish are, and where they ain't, so to speak. That's the Holy Grail proposition." Chicvara believes the deep penetration of the market is a product of the bewildering array of exotic styles of beer found in the state. "We're talking passionate loyalty to hefeweizen, lemon lagers, terse IPAs, and simplistic raspberry beers. Every possible style of beer can be found here." From Full Sail Speaking as a founder of Full Sail Brewery in Hood River, Chicvara has a slightly different slant on the issue. "I'm not as bullish when it comes to my own company," he said. "Full Sail's portfolio moves away from these broader based beers I just mentioned. We've developed new beers, but we're fishing in the connoisseur or gourmet pool. Without any disrespect toward my colleagues in the hefeweizen and fruit beer category, we're into the more narrow IPA, ESB, and amber ale segment. It's more challenging, but we want to be there for consumers as their palates deepen and broaden. The way I see it, we're skimming cream; my brewing buddies are going for whole milk. |
"I'm trying to appeal to three or four of the ten people who drink craft beers," Chicvara added. "My buddies are shopping for six or seven of the ten. That's one of the reasons we're good friends with Kurt Widmer, whose specialty is hefeweizen. We don't compete with Kurt; he makes damn good beer, and he's more comfortable with that broader-based appeal. I want the IPA or amber ale drinkers. On April 1, we're adding our fourth year-round product -- nut brown ale. That's going against the flow when you see everyone else out there -- including Redhook -- coming out with hefeweizen." And Widmer Brothers "The level of support from the retail side -- both on and off-premise -- is phenomenal," said Jim Ford, marketing director for Portland's Widmer Brothers Brewery, Oregon's leading craft brewer. "The basic issue for retailers, beyond the excitement over the products, is that the profit margin is so incredibly high. They're supportive and give us high shelf sets. The domestics are getting squeezed to fewer and fewer liner feet. You walk into a liquor store or grocery store up here -- Safeway, Albertsons, or Fred Mayer -- and see these massive micro-beer sets. This has been great for all parties in the three-tier system -- retailers, distributors and brewers alike," Ford said. Does this mean that the large market share Oregon has in the state could go nationwide? "When you talk nationwide, there are so many pockets that are relatively ignorant of craft beers, for wanof of a better a choice of words, like in the south or southeast," Ford said. "But in the midwest, I'm hearing numbers out of Kansas and Nebraska that indicate a few breweries are making great progress in a short period of time. I see our own population base going out into places like Montana, where there's a growing craft beer category. I think some of this growth is due to societal factors like the drunk driving laws, but it's also due to the proliferation, like we have in the Northwest, of neighborhood taverns that promote the sale of craft beers." Oregon Brewer's Guild Another viewpoint is offered by Michael Sherwood, executive director of the Oregon Brewers Guild. "The growth you're talking about can be seen in the membership roles of the Oregon Brewers Guild," Sherwood told the Erickson Report. "The OBG had 16 members in January, 1994; that grew to 32 in July of 1995 when we met for the Oregon Brewers' Festival. As of March 1, 1996, we now have 43 members, and most of the new entries are brewpubs. "We polled our members and calculated that production by Oregon brewers grew by 65 percent from 1994 to 1995, from 230,000 barrels to 370,000 barrels," Sherwood said. "Our members project production to grow to 554,000 barrels in 1996, a 48 percent increase over 1995. That number, by the way, doesn't include the last ten new members who joined in March and who will be getting started this year." Sherwood believes this growing market share can be traced to the loss of sales by the major brewers. "The beer market share in Oregon is being shifted from majors to micros as new consumers come to the market. Their preference is for microbrew-styled beers, and they're loyal to our state's breweries," he concluded. It used to be said that where California goes, so goes the rest of the nation. In the craft beer industry, Oregon has always been perceived as being on the cutting edge. The state has been innovative in all segments of the industry, from opening breweries and brewpubs to creating popular beer styles and attracting ever-growing numbers of consumers into the craft beer culture. If Oregon's production continues to grow as Sherwood and Chicvara project, the state's craft breweries will capture more than 10 percent of beer sales in 1996. These numbers give a clue to the potential long-term growth of the industry across the country and the loyalty of consumers for regional specialty beers. Consider it a look at where the rest of the nation may be in the beginning of the new century. |
| State Ranking | Craft Brewery | Barrels Sold | Percent of Total Volume |
| 8 | Widmer Brothers | 34,880 | 1.59 |
| 9 | Hart (WA) | 25,044 | 1.12 |
| 10 | Portland | 22,621 | 1.01 |
| 11 | Full Sail | 21,506 | 0.96 |
| 12 | Deschutes | 21,207 | 0.93 |
| 13 | Willamette Valley (Nor'Wester) | 20,280 | 0.91 |
| 14 | Bridgeport | 13,228 | 0.60 |
| 20 | Oregon (Rogue Ales) | 5,518 | 0.25 |
| 21 | Boston Beer * | 5,515 | 0.24 |
| 22 | Edgefield | 5,032 | 0.23 |
| 28 | Redhook Ale (WA) | 2,691 | 0.13 |
| 29 | Pete's * | 2,496 | 0.11 |
| 30 | Sierra Nevada (CA) | 2,370 | 0.10 |
| 51 | Anchor (CA) | 751 | 0.03 |
| Craft Beer Total | 8.92 |
