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Wednesday, August 14, 2013

Bend May Have Too Many Breweries

I have argued, and will continue to argue, that there aren't too many breweries in the United States.  There is no craft beer bubble on the horizon.  But now our man on the Bend street, Jon Abernathy, reports that in addition to the twenty extant breweries in Central Oregon, five more on in the works
So, these additions put Bend and Central Oregon at 25 breweries by year’s end (assuming all goes as planned and paperwork is signed, etc.), though even then there’s still potentially on the horizon: three off the top of my head which have been mentioned are the Brew Shop/Platypus Pub‘s (small) brewpub, the “Old Mill Marketplace” brewpub, and a possible rumored brewery at Brasada Ranch Resort out by Powell Butte (between Bend and Prineville). Plus there’s a bunch of other potential names I’ve been discovering lately that I will be following up on (but may only be names and nothing else).
But 25! That puts Central Oregon at nearly half of the number of breweries in Portland (51 at last count) and who knows where the current rate of growth will put the region by the end of next year.
Let's do a little math.  As you probably know, there are a number of people who are already spooked about the number of breweries nationwide which, for the sake of round numbers, we'll put at 2,500.  That works out to a per capita total of one brewery for every 120,000 men, women, and children in this great land.  (They're obviously not distributed evenly, but that's a statistical quirk itself: the places with the greatest density are generally those with the healthiest craft beer markets.)  By comparison:
Country ... per capita
Belgium - 91,000
Czech Rep. - 81,000
UK - 63,000
Germany - 61,000
Austria - 50,000
Now, if we're being extremely generous and including the entire tri-county region in our population total (Deschutes, Crook, Jefferson), we come up with 150,000 souls.  That works out to a per capita brewery total of one in 6,000.  Considering what happened to real estate just a few years back, I'm beginning to think there's a bit of a gold-rush mentality in that old frontier town.  Surely that's not sustainable.

13 comments:

Anonymous said...

I think you are thinking too micro. Your logic might be valid if these breweries could only sell in the area you reference but many sell to people outside the area. You will always have specific regions that are good at what they do and sell to regions that lack the skill or resources.

Jeff Alworth said...

I'm sure that's what it says in their business models. I, on the other hand, believe that if the local market isn't the base of your support, you are on very shaky ground.

Anonymous said...

You could be right about the breweries, but I think tourism-based/supplemented economies need additional capacity to serve tourists, who eat out more and spend more per day then year-round residents.

The number of ski-lifts, hotel/resort rooms, golf holes and ski/snowboard shops per capita in that region also far outstrips the national average.

Anonymous said...

That's an interesting perspective on locals, didn't think about that. Did you know that over 90% of the bourbon produced in the world comes from Kentucky? Talk about a bubble!

Jack R. said...

Not a per capita brewery total of 01 for 6,000 like the Bend neighborhood; but, one brewhouse per 9.8k inhabitants in Boulder County. Ie, there are 31 craft breweries / brewpubs in Boulder County, Colo. Population 305k [2012 estimate];equates to one brewhouse per 9.8k inhabitants.
.. The largest 04 [Oskar Blues, Left Hand, Avery, Boulder Beer] are regional breweries [>15k bbls/yrs] and distribute to multiple states.
.. Like everywhere else, 03 more brewhouses should come online this year [01 per 9k inhabitants]. And two more in 2014 [01 per 8k inhabitants].
.. Further, there are 03 brewer associated restaurant; 02 associated with Oskar Blues; 01 associated with the Mountain Sun Pub ... family.

Pete Dunlop said...

I love all the anonymous comments. Who does that?

Anyway, I was just over there. And I do think Bend is in trouble. They are producing far more beer than the local market can bear. Forget about tourists and such...the numbers aren't enough to support the kind of production we're talking about. Please also disregard the notion that there is some special expertise or ingredient in central Oregon. The one special ingredient I will agree to is Deschutes. How many of the breweries over there are descendants of Deschutes?

The larger problem now that they're producing so much beer is what to do with it. As more and more breweries come online in Oregon and across the country, it will become more difficult to export. Competition for tap handles and shelf space is going to intensify. It isn't just Bend that's going to feel this, but they will feel it in a big way, in my opinion, because what they produce goes so far beyond what the local market can consume. Yes, there's a bubble forming in Bend. Yes, it's unsustainable.

Darlene said...

I live in Boulder County which spans 5 cities, and in each of those cities are breweries, brewpubs, and tap houses. Some are very large breweries with a large capacity and they distribute their product nationally but there are many breweries that are mom and pops establishments that are basically serving the neighborhood. So to me saturation equates to production. Yes there are many places to have a "craft beer" and it is sketchy on the distant future of the microbreweries in Boulder but for now it is sustainable with the laws of supply and demand. Avery Brewing had to let go of some states for distribution because of not enough product and some areas weren't selling well.

Jim F. said...

I don't think we can have too many good breweries. At a minimum, even Bend is a long way away from that (particularly since it is a tourist destination). You can have too many mediocre ones though (cough, cough, Portland). The "Hood River Metro" area has 7 breweries. If you generously count the entire HR County population (and I don't think many Cascade Locks folks are coming into town for a beer) and add in White Salmon, you have one brewery for every 3,400 people. And we could certainly sustain a few more breweries in town.

Jack R. said...

To PeteD's point.
.. I think the onus is on the brewhouses to create/foster relationships with the distributors. Currently on a roadtrip from Colo. through Utah, Nev., and Calif. to Oregon, I have NOT found a good selection of craft beer in stores. Not even in the much heralded Beervana of Oregon [rural areas].
[In Colorado, breweries are allow to self distribute. I have no knowledge of elsewhere.]

To Darlene's point. Rather than 'mom and pop establishment', I find many of the nano-brewers are former IT workers seeking an alternative to the modern corporate environment.

Darlene said...

To Jack's comment, you're right about IT workers but if they make good beer... I only meant that there's a mom and pop feel to the small nano-breweries.
You are also right on with the comment about liquor stores not having good beer stocked, I refer to California. In San Jose, you can only find a wide variety good beer at the larger liquor marts like Bev Mo. We are so spoiled living in Colorado!

Barroomhero said...

For established breweries, I do not think that this will be an issue to affect them at all. They have already outgrown the region which they are located and are in that distribution mode.

That being said, for the NEW breweries (and I would include ones that have opened within the past year as an arbitrary cut off point) this is a problem. They HAVE to compete on that local level to start. And with the huge increase in competition, it may be too much for them to bear. Many of them will either have to relocate (with the associated costs) or get out of the business altogether.

Daniel said...

As long as our share of the beer market keeps expanding--I mean, until we get to 50% of the total beer market, I think it is silly to say we've reached saturation. Year after year, thousands of Oregonians switch from industrial beers to craft. Until we stop gaining ground, no cause for worry.

Ryan Hirscht said...

Perhaps we should consider how many barrels are being produced rather than the number of breweries. Deschutes is obviously the big dog in Bend, with their distribution going well outside of Oregon's border, but maybe the volumes being cranked out by the smaller up-and-coming plants make this rapid growth look more sustainable. If most of these breweries are making <5,000 bbls/year (and I imagine a few are considerably less than that figure) then I think it's less of a bubble than looking at the sheer amount of facilities.

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