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Wednesday, June 29, 2016

How Big Will Craft Get? Oregon's Numbers are Suggestive

The Oregon Brewers Guild released the latest juicy batch of beer consumption and brewery statistics for the state, and it is as ever quite fascinating. Let's start with a few of the topline numbers and then jump into some thinking about what they mean.
  • 22% of the beer consumed in Oregon was brewed here--and with the exception of 10 Barrel, these all conform to the general sense of "craft breweries."
  • 63% of draft beer sold in Oregon is brewed in Oregon. (63%!)
  • The amount of Oregon-brewed beer consumed in Oregon increased 11% in the past year, even while...
  • The amount of beer brewed in Oregon increased only 3.5%.
  • Oregon had 206 brewing companies operating 246 brewing facilities in 72 cities at the end of the year.
  • Portland has 65 breweries and there are 95 in the metro area.
Lets break all this down a bit. The Oregon Brewers Guild is not concerned with craft beer, it's concerned with Oregon's breweries. As such it does not try to gather stats for "craft beer," which would include some portion of imported beer and craft beer made in other states. To make the Guild's stats consistent with the Brewers Associations', you'd include craft beer brewed in other states. Let's be extremely cautious and bump the "craft" share of the Oregon market up from 22% to 25% then. How does that compare with national stats? Oregon's market is twice as large: nationally, only 12.8% of beer sold is "craft."  The US market for beer is roughly 200 million barrels and if the country drank beer at Oregon's rate, that would put it at 50 million barrels.  

That's good, but the stats that most interested me were these: Oregon's consumption of craft beer--already the highest in the nation--continued to grow at an 11% clip. But its production only grew at about a third as fast, at 3.5%. Most of Oregon's beer production comes from just a handful of breweries--breweries that sell regionally or nationally. While breweries like Deschutes, Craft Brewers Alliance, Full Sail, and Ninkasi sell a lot of beer locally, they sell way more of it out of state. We can take this to mean that they're having a harder time selling their beer in growing markets outside Oregon.

I think we're seeing this reflected in recent stories about slowing sales for the big flagship brands even as the craft segment continues to grow. The craft segment is changing and becoming more local even as many big brands are expanding and trying to grab a piece of that ever-expanding pie.

I used to think Oregon was a cultural anomaly and that our progress in developing beer culture would not be replicated elsewhere. But I started thinking that when craft brewing had a 4% market share and Oregon was at 12%. Oregon is likely always going to be one of the national leaders in craft beer consumption and production, but it isn't anomalous--it's just ahead of the curve. And it's growing. What proportion of the national beer market will the craft segment on day occupy? At least 25%, I'd guess--and possibly well north of that.


  1. When you write "The Oregon Brewers Guild is not concerned with craft beer" do you mean specifically when compiling impressive stats for the state like these, or in general?

  2. Yeah, sorry, that wasn't a super clear sentence. I was trying to point out that the Brewers Association and Oregon Brewers Guild represent different kinds of breweries and so their numbers aren't exactly parallel. The idea of "craft" is the BA's, not the Guild's.

  3. But Oregon Brewers Guild definitely is concerned with what is craft when it comes to their membership. Hence kicking out 10 Barrel.