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Oregon's Coffee Shops Continue to Perk Up
by Martin Kraal
Published Nov-22-2013

Coffee shops throughout Oregon provide customers with their daily coffee, lattes, cappuccinos, and other drinks that help wake them up in the morning and keep them awake during afternoon meetings. According to the National Coffee Association of the U.S.A. (NCA), which has tracked coffee consumption through annual surveys since 1950, 83 percent of Americans 18 years and older say they drink coffee and 63 percent drink it daily. With such a large majority of Americans drinking coffee, it's no surprise to find several coffee establishments in cities throughout the state, and sometimes multiple shops on the same block.

Coffee shops, however, provide customers with more than a latte or mocha. Coffee shops are places where people meet with a business partner or old friend, access public WiFi, listen to an open-mic session, study for an exam, or read a book. Thus coffee establishments provide a gathering place and potential economic benefits greater than the price of a vanilla latte.

A Growing Industry
Employment and wage data are classified according to the North American Industry Classification System, or NAICS, and coffee shops and stands are classified in the snack and nonalcoholic beverage bars industry. This industry includes other establishments serving items such as donuts, pretzels, ice cream, and frozen yogurt. In 2012, there were 1,127 establishments in this category with an annual average employment of 9,958 (Graph 1). About half of these establishments were located in the Portland metro area (i.e., Clackamas, Columbia, Multnomah, Washington, and Yamhill counties). Snack and nonalcoholic beverage bars are a component of the larger food services and drinking places industry.

Though the snack and nonalcoholic beverage bars is a small industry, comprising less than 1 percent of total statewide employment, it is a growing industry. Growth in both the number of establishments and employment in the industry has outpaced the average rate of growth for all industries. From 2002 to 2012, the industry's employment increased by almost 50 percent in Oregon, whereas total employment for all industries increased by 5 percent. Similarly, the number of establishments increased by 38 percent compared with 14 percent for all industries. Growth at snack and nonalcoholic beverage bars has also outpaced the larger food services and drinking places industry.

Growth in the number of coffee shops has created greater competition along with a more educated customer. This has increased the emphasis on the quality of the product being served. Dan Buck, who is the Creative Director and Public Relations Director for Dutch Bros. Coffee, mentioned that it's important to focus on the quality of the product and keep it as high as possible. Also, with several coffee establishments open for customers, it's important to provide high quality customer service. Dan Buck said Dutch Bros. Coffee helps accomplish this by hiring workers who are charismatic and "genuinely love other people."

Coffee and tea manufacturing - an industry closely tied to coffee shops - also relies on quality products to succeed. Though some coffeehouses roast their own beans, there are several coffee roasters throughout the state from Portland down to Ashland, and east in Sisters, Bend, and Pendleton. The coffee and tea manufacturing industry in the state has steadily increased from 10 business units employing 467 individuals in 2002 to 47 units employing 725 in 2012 (Graph 2). The average annual pay for the industry in 2012 was $38,733, which is higher than the average for coffee shops, but lower than the all-industry average.

Several new coffee shops and roasters have opened in the past few months. Some of the establishments are:

  • Red Daisy Coffee Company opened in Albany. Albany Democrat-Herald, 10/21/2013
  • Chrysalis Coffee opened in McMinnville. News-Register, 9/12/2013
  • Nehalem Beehive, a tea and coffee bar, opened in Nehalem. Headlight-Herald, 8/14/2013
  • Bentley's Coffee, a drive-thru coffee stand, will open in Keizer. Statesman Journal, 8/11/2013
  • Vul Coffee Roasters will open in Salem. Statesman Journal, 8/4/2013
  • 11 Roasters, a coffee roaster, opened in Bend. The Bulletin, 7/24/2013
  • The Corner Cup, a coffee shop, opened in John Day. Blue Mountain Eagle, 7/16/2013
  • Stim Coffee opened in Jacksonville. Mail Tribune, 7/1/2013

More listings can be found on the Around the State page on QualityInfo.org by clicking on "Business and Employers" under "Data Tools."

Graph 1
Employment at snack and nonalcoholic beverage bars in Oregon 2001 to 2012
Graph 2
Coffe and tea manufacturing employment in Oregon 2001 to 2012
Workers and Wages
The average annual wage for employees in the snack and nonalcoholic beverage bars industry in 2012 was $14,709, which was significantly lower than the statewide all-industry average of $44,229. It's probably no surprise that workers in the industry earn lower wages as the pay scale for many jobs, such as baristas, often begin at minimum wage and many employees work less than 40 hours a week.

However, workers in the industry, especially younger workers, can obtain other benefits, specifically work experience. Compared to other industries, coffee shops tend to employ a larger share of younger workers. Data for just the snack and nonalcoholic beverage bars industry is not available, but it is for the larger food services and drinking places subsector. In 2012, 14 to 24 year olds comprised approximately 34 percent of the food services and drinking places workforce compared with 12 percent for the total workforce. These younger workers in the industry can learn skills and gain valuable work experience that will allow them to be successful in other occupations. For instance, they can learn how to work in a fast-paced environment, receive payments, provide customer service, and acquire "soft" skills such as showing up to work on time, working in a team, and communicating with customers.

A Gathering Place
Coffee shops were around long before Starbucks opened its first store in Seattle's Pike Place Market in 1971. The first coffee shop is believed to have opened in Turkey in the 15th century and later they expanded across Europe in the 17th century. The first coffee shop in the U.S. opened in Boston in 1676 and political events helped shape American's drinking habits. An article from NPR, "How Coffee Influenced the Course of History," notes, "It is often said that after the Boston Tea Party of 1773, when American colonists raided British tea ships and threw crates of tea into the harbor, Americans universally switched over to drinking coffee."

From their originations in the Middle East in the 15th century to "penny universities" in 18th-century England and arrival in the American colonies, coffee shops were hubs for social interaction. As noted in an article titled "Coffee-houses: The internet in a cup" from The Economist, "Coffee-houses were centres of scientific education, literary and philosophical speculation, commercial innovation and, sometimes, political fermentation."

Today, coffee shops are still viewed as gathering places. They offer an atmosphere conducive to meeting with a co-worker, business partner, or friend. Coffee shops can also serve as music venues for aspiring musicians and galleries for artists. However, the idea of coffee spurring social interaction also extends beyond coffee shops to coffee stands. As Dan Buck at Dutch Bros. Coffee said, "Since the beginning of time, coffee has been a social event." People can enjoy that type of social activity in the car as well as through interactions with their co-workers and friends.

Coffee shops, as well as coffee roasters, are a small, but growing part of Oregon's economy. If the lines of cars outside coffee stands in the morning are any indication, it's likely the demand for coffee, lattes, and other drinks will remain strong and support continued growth. Furthermore, coffee shops are a place where people meet to socialize, exchange ideas, work on their next project, or study, thus you could imagine that the economic impact of coffee shops extends beyond the sales of individual cups. Not to mention, coffee helps keep us awake and productive during those early morning meetings.