Portland Craft Beer Isn’t Over-Saturated

Anyone who knows my writing will acknowledge that I rarely revel in opinion. I would never attempt to take up the mantel of Martin Cizmar – it’s just not in my blood. If you ever hear me rant about something, it’s usually because the air is rife with misperception. And nothing upsets me more than people being lied to – I’m all about sharing the truth.

So this pervading notion that, all of the sudden, Portland’s beer market is over-saturated makes no sense. I don’t buy it and you should second-guess anyone who claims this is why various breweries, taprooms and/or restaurants have been closing up shop over the past six months. As a result, I’ve had a number of people ask me “what’s going on? Does Portland have too many breweries?”

No, it doesn’t, so let’s address this saturation nonsense. There are more wineries (and more every year) in the US (over 7,700) than breweries (around 7,000). And just to put things in perspective there are around 14,000 Starbucks, 14,146 McDonald’s and 26,982 Subway locations in the US today.

I haven’t heard anything about a crisis in the wine industry and despite people eating healthier and minimum-wage workers demanding increased pay, the fast food universe has yet to implode. Yes, owning and operating a franchised drive-thru joint isn’t quite the same as running a brewery, but why do these places continue to flourish? Convenience, price, location, and a consistent product. All things that have kept the largest breweries in the world successfully chugging along for decades.

As for the national craft beer industry, the Brewers Association reported that 997 breweries opened and 165 closed in 2017. And while 2018 wasn’t exactly kind to Portland breweries, openings still continue to outpace closures each year.

With so many locally focused breweries now , it’s become quite clear that the country’s tastes for freshly made, local neighborhood drafts have fed the growth of the craft beer industry over the past 6 or 7 years nationally, just as it has here in Portland.

Though what may be an even greater barometer for success, for all the industries above as well as for breweries, is whether they have the ability to effectively manage themselves as a business.

In the short term, start-up breweries that have struggled too often emphasize a focus on brewhouse production, the adjoining brewpub, or everyday operations, while struggling to manage finances, securing capital, handling distribution and sales, or appropriately adjusting their operations in response to prevailing winds withing the industry.

Yet what Portland has been seeing since September are the closing of breweries and brewpubs that are, for the most part, landmark entities. They include Lompoc Tavern (NW 23rd), Alameda Brewing, Portland Brewing’s restaurant, Royale Brewing (for sale), Widmer Brothers’ pub, Burnside Brewing, Scout Beer’s SE 10th & Hawthorne location, and Bridgeport Brewing’s slated closure on March 10th.

Each has their own story as to why they closed, which doesn’t need to be elaborated upon here, but there have been some consistent issues – across the board – that have hurt each of these businesses and should be guideposts to learn from for younger breweries.

There’s a domino effect I fear many of them have experienced… a lack of innovation and/or quality flagships when today beer drinkers have more interest in the former and less in the latter. This has resulted in difficulties securing tap handles at local taprooms,  leading to reduced interest in visiting their brick-and-mortar location(s). And all of this leads to less revenue, less innovation, fewer one-offs/seasonals, reduced distribution… and on, and on.

Yes, some of these breweries had, or continue to have, serious management issues. A few of those nationally known brands have done back flips the past few years to install small batch brewhouses, rebranding their image, pursuing the hottest new styles, held well attended events at their locations, yet despite all the hard work put in daily by those on the ground to make things happen, none of it panned out.

If you really want steady business at a brewpub or taproom, you need great cuisine that draws locals to your location, while simultaneously getting those small batch brews into the hands of craft beer fans at taprooms or local bottle shops. And I get that running a restaurant is expensive and difficult, though most locations now have dedicated food carts or trucks that can provide eats that appeal to everyone. If you don’t at least do that and are unable to update your drafts to draw what the ever evolving tastes modern palates are demanding, you’re going to struggle.

And let’s not overlook that fact that there’s been a lot of competition and disruption. New breweries and additional locations for existing breweries have opened, a number of distribution mergers and confusion (i.e. GDI/Columbia, for one), an uptick in out-of-state breweries getting local distribution, and problems with existing locations (limited foot traffic, employers leaving the industrial NW, increased rent, etc.) have all contributed to established brewers being left out in the cold.

All of the above conditions might sound like a lot to overcome. And while not all of them are absolute roadblocks to success, nor is there one silver bullet solution to overcome them all, if you’re beleaguered by many of these conditions, surviving in the current market will be far more difficult.

But let’s not say that the common thread for each of these locations closing is because the market is over-saturated. Those who do so are only doing our local breweries, their employees, and loyal customers a disservice by overlooking, instead of truly addressing, the real problems at hand.

So make great beer and make innovative beer. Establish strong relationships with your distributor to ensure it’s on tap where it speaks to your demographic. Make your location a destination for not just beer alone. Take care of your employees and your customers, of course. But most of all, don’t forget to continue following your heart as you pursue your passion.

For further insight, check out this symposium that was held in September discussing The Growth and Future of Craft Breweries.