Note: It should, therefore, go without saying that this breakdown doesn’t consider sales from out-of-state breweries, which account for 84% of Oregon sales.
Without further ado…
In 2012, the total number of taxable Oregon breweries rose from 110 to 134, an increase of 22%. Compare to 2011 when taxable breweries went from 94 to 110, a 17% increase, and 2010 when taxable breweries went from 78 to 94, a 20.5% increase. At this rate, the number of breweries in Oregon could pass 150 by the end of 2013, effectively doubling the state’s breweries in just three years.
Half of the state’s breweries operate in the Portland metro, according to the Oregon Brewers’ Guild fact sheet.
According to that same fact sheet in 2008, Oregon breweries’ market share of total sales in barrels (bbls) was 11.4% in the year 2007. According to the latest OLCC numbers, that number rose to 16.5% in 2012, a full 5% gain in market share over a span of five years. Total taxable sales in Oregon reached nearly 2.8 million bbls.
On the downside, taxable bbls from Oregon breweries increased just 6% to ~462,000 bbls after consecutive years of double-digit growth. Taxable bbls had previously increased 10% in 2011 and 15% in 2010.
Oregon is one of the nation’s most mature craft beer markets, if not the top market. To illustrate using the extreme case of Alabama, taxable bbls from in-state small brewers came just shy of 20,000 bbls last year. One thing to consider going forward with a market this mature is how much upside there is for brewers going after volume. Artisanal-centric breweries doing barrel-aged beers and the like? No problem if they can make the economics work. Volume appears to be a bigger challenge.
So who grabbed the ~26,000 incremental bbls of growth last year?
TOP THREE BREWERIES:
Deschutes Brewery is back in the #1 spot with nearly 89,000 bbls sold or about one-third of the brewery’s total sales in 2012. At 8.5% growth (7,000 bbls), that is slightly behind the company’s national average. Not bad at all for a 25 year-old company in its home base.
Craft Brew Alliance saw nearly 4% growth (3,000 bbls) but fell to #2 with just over 88,000 bbls in Oregon. With CBA facilities in Portland, Washington, New Hampshire and Hawaii producing more than 600,000 bbls annually collectively, it is hard to glean much from just the top line Oregon number. Because the company is publicly traded, we can get a better view when it reports fourth quarter and full-year earnings in March.
Ninkasi Brewing sales rose 13% (5,300 bbls) to 41,841 bbls in Oregon with total sales amounting to 68,000 bbls across its Northwest distribution area, according to Co-Founder, Nikos Ridge. Ninkasi sales grew 75% in 2011 in Oregon so this comes as a bit of a surprise though Ridge tells BeerPulse that the slow down was by design due to coming capacity constraints. Ninkasi upped its annual working capacity to 95,000 bbls which it projects to be up against throughout 2013.
THE REST OF THE TOP DOZEN:
After the top three, sales stayed flat or even declined for a number tenured Oregon breweries: (4) Portland/MacTarnahan’s, (5) BridgePort, (6) Full Sail, (7) Henry Weinhard’s/MillerCoors and (8) Rogue Ales. BridgePort sales actually declined by 3,000 bbls, over 10%.
That brings us to (9) where we find the big winner of the year: 10 Barrel Brewing Company. 10 Barrel’s sales shot up from 2,634 bbls to 8,648 bbls. 6,000 barrels. 225% growth. The company opened up a new 50-barrel brewhouse in Bend at the beginning of 2012 and plans to open a brewpub in Idaho this spring.
10 Barrel even managed to leapfrog Hopworks Urban Brewery which fell to 10th place. Hopworks still grew sales by 1,000 bbls (or 15%) to 7,600. That number is likely to rise by double-digits again in 2013 with the addition of a new canning line this past year.
Behind Hopworks in 11th place is Boneyard Beer Company, which, like 10 Barrel, had a huge year increasing sales by 175% to 7,500 bbls. Boneyard aims to open a new facility with a canning line this spring.
What is apparent is that this new crop of to-be ‘regional’ breweries like 10 Barrel and Boneyard are taking share at the expense of a group of tenured breweries, ones that will likely have to look elsewhere for growth. Rogue is already national. Henry Weinhard’s is wisely going national. MacTarnahan’s went the opposite direction and just re-branded as Portland Brewing Company. What will Gambrinus (parent company) do with BridgePort? Will employee-owned Full Sail look to expand its distribution further?
Boneyard and 10 Barrel actually sold more bbls to Oregon beer drinkers than Rogue for the combined months of November and December. At its current rate, 10 Barrel may actually hit 15k bbls in 2013 and pass Rogue for the year.
What to watch in 2013: will Oregon reach 150 breweries and will those breweries pass 500k in-state barrels in 2013?