COVID-19 Impacts on Oregon’s Breweries and Pubs
November 15, 2022The year 2020 was difficult for many types of businesses. The COVID-19 pandemic dramatically altered the way we engage the economy. Breweries and brewpubs had been posting slower rates of growth before the onset of the pandemic, but the closure of in-person dining dealt a blow to demand for kegs and employment within the pubs themselves.
In the summer of 2019 there were nearly 9,090 jobs in brewing establishments across the state of Oregon. A brewing establishment is any location that brews beer. A portion of these are manufacturing facilities that produce their beer to be distributed to retailers or restaurants. However, many of the state’s brewing establishments are brewpubs that both brew beer and serve that beer onsite in a more typical restaurant environment.
The dramatic impacts of the pandemic were first seen in April 2020 when covered employment dropped by a staggering 3,700 jobs (-50%) from the month before. The drop is even more shocking when you consider the highly seasonal nature of the industry. Typically the spring is a time of hiring for breweries and pubs, which means the loss of half of total employment in one month understates the true impact to the industry.
As with the economy more broadly, there was an initial V-shaped recovery to employment during summer 2020 in Oregon’s brewing industry. Pubs and breweries added back around 2,700 of the 3,700 jobs lost in April. Even with this sharp rebound, by August 2020 employment in breweries still remained down by around 27% from August 2019. As you might expect, the COVID impacts to the brewing industry were much more significant than to the overall economy, but job losses were also more significant than the loss in food services and drinking places, where employment was down by 23% over the year. For the overall economy, employment remained down only 8% in August 2020 compared with the previous year.
Employment fell again in the winter of 2021, as it usually does in seasonal industries. The overall trend, however, was, and is, for continued recovery. The most recent data are from June 2022 and they show that employment in Oregon’s breweries and brewpubs was down only 14% below the level of August 2019. With normal seasonal growth it’s likely the employment in brewing returned to near its pre-pandemic level during the summer of 2022.
Behind these higher level numbers we see some interesting trends. There were 263 establishments that reported employment the summer before the pandemic in August 2019. The vast majority of these brewing establishments posted job losses during the pandemic, and 109 of them still had lower, but some, employment nearly three years later in June 2022. An additional 64 of them were no longer reporting any employment at all by June 2022. In June 2022 there were 244 brewing establishments reporting employment. Of these, 116 showed an employment gain over the period, and 31 of these with gains were reporting employment for the first time.
We don’t have a good measure on business closures and openings, but we do know if an establishment stopped reporting employment or began reporting employment for the first time and this is likely to indicate a closing or opening. A few of these were documented permanent closures, including Bridgeport, Lompoc, and The Ram. Interestingly, some of the businesses that announced permanent closures did so before the onset of the pandemic. Perhaps most impressive are the 31 brewing establishments that began reporting employment for the first time. These weren’t necessarily new breweries, but they began paying payroll employees for the first time during a pandemic and recession recovery. Hats off to these entrepreneurs for getting a brewery up and running in such a challenging environment.
Despite the challenges faced in the past three years, there is reason for optimism as we move further away from lockdowns and restrictions. Fewer public health restrictions helped consumers feel more comfortable going out to public places such as brewpubs. The opening of the economy and the spending of money saved during the pandemic led to an increase in spending on beer. In 2022, an economic concern is whether we face a recession. Fortunately for brewers, alcoholic beverages are considered recession resistant products, although the mix of what and where beverages are consumed may change.