Oregon’s Brewing Industry Still Growing, but at a Much Slower Pace

by Damon Runberg

July 3, 2018

It has already been well documented that growth in Oregon’s brewing industry is beginning to slow down (check out this update on brewing production by Josh Lehner over at the Office of Economic Analysis). From an employment and payroll perspective we are seeing the same trends with the rate of job growth slowing dramatically for brewing establishments.

As a reminder, a brewing establishment is any location with onsite brewing, including large manufacturing breweries, brew pubs, and nano breweries. Those establishments with at least one covered employee and brewing on site were included in this analysis. As a result home brewers and pubs without onsite brewing were not included.

Although we continue to see new breweries and pubs being created each year, an increasing number are also closing up shop. When accounting for these closures the state only netted three new brewing establishments that reported payroll in 2017. Additionally, employment growth in the brewing industry is slowing dramatically compared with several years ago. Last year the industry expanded by 6.2 percent (+480 jobs). This is rapid growth when compared with the 2.1 percent growth in total nonfarm employment over the past year, but significantly slower than the 13.4 percent growth in breweries’ employment back in 2015.
Brewing employment continues to be dominated by pubs, which account for around 68 percent (5,560 jobs) of all brewing jobs. Not only are pubs the largest employers, but they are also the fastest growing. Over the past year pubs added around 460 jobs (+9%), while manufacturing breweries only netted 12 new jobs (+0.5%). Despite the slower employment growth, manufacturing brewing establishments are higher paying; their average wage is 45 percent higher than pubs. This isn’t too surprising as a large share of the employment in pubs is concentrated in restaurant occupations, such as waiters and waitresses; food preparation; dishwashers; and cooks.

Regional Breakdown of Brewing

Breweries and pubs are well distributed across the state with 29 of Oregon’s 36 counties claiming at least one brewing establishment. Perhaps more impressively, 72 different cities and towns have at least one brewing establishment. Although breweries can be found in nearly every corner of the state, there are distinct brewing regions. The highest concentration of breweries are in the Portland metro area, Central Oregon, the North Coast, and the Columbia Gorge.
Central Oregon, in particular Bend, is often identified as having more breweries per capita than any other city in Oregon. This is simply not true. A number of communities along the coast have a much higher density of breweries per capita than Bend. Cannon Beach has the most breweries per capita with one brewery for every 570 residents. Astoria has the second most breweries per capita (1 brewery: 1,390 residents), followed by Hood River then Newport. The cities with the most breweries are Portland (66); Bend (17); and Eugene (14). Despite a large number of breweries the ratio of residents per brewing establishment is lower than some of these smaller communities with fewer breweries, but much smaller populations.

Although Central Oregon may not be home to the most breweries per capita, the High Desert continues to see rapid growth with brewing establishments adding around 100 jobs over the past year (+7.6%). The Portland metro area added around 130 jobs for a growth rate of around 4 percent. Some of the fastest growth was seen in the Rogue Valley, with Medford adding a new large brewing establishment in the past year which helped the region net around 70 brewing jobs. Fast employment growth also occurred in brewing establishments in Lincoln County (+37 jobs) on the coast and Hood River County (+26 jobs) in the Columbia Gorge.
Despite much slower growth in the brewing industry over the past year, we continue to see these brewing establishments grow at a faster pace than the overall economy. After nearly a decade of impressive growth in new brewing establishments, we are starting to see fewer new firms each year and more closures. However, the industry continues to maintain relatively fast job growth due to existing establishments expanding their operations.

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