Final 2020 Sales Figures
Each year I check in with the Oregon Liquor Control Commission (OLCC) to see how many barrels of beer Oregon breweries sell in state. It’s not a perfect metric (not least because the agency has a funky way of collecting the numbers), but it is always suggestive. For those following along, there were signs breweries like BridgePort (down 69% percent in the five years before it closed) and Portland Brewing (down 58% over its last five years) were in real trouble. A few years ago we also saw in these numbers we saw the benefit of distribution networks with the purchases of 10 Barrel and Hop Valley and their subsequent bumps.
This year we’re seeing the effects of a pandemic, with its uneven effect hitting draft-heavy breweries hardest, but also the worrying signs of another legacy brewery mid-swoon—Oregon’s erstwhile king, Deschutes Brewery.
The topline number is funky. According to the OLCC, Oregon sold 22% less beer in 2020 than 2019, but they also list AB InBev with sales of just 107,000 barrels, down from 421,000 barrels in 2019. That seems like statistical error, and it accounts for 92% of the sales loss. Were ABI’s sales similar to 2019, overall decline would be modest. By contrast, the top twenty breweries actually grew 4% (19,693 bbls), but that’s thanks mostly to Ninkasi, which grew an astounding 38,000 barrels in 2020. Overall it was not a great year, but given expectations this time last year, I’d say it looks pretty good.
As usual, below is a table of the largest twenty breweries. Keep in mind that these numbers reflect the taxes paid on beer in Oregon—breweries at the top of the list also sell a lot of beer outside the state. Also important to note that these numbers describe barrels sold, not dollars made. A brewery makes far lower margins on beer sold in packages at grocery stores than it does on sales in its own taproom or brewpub, so the revenue picture may be worse than what we see here.
With those caveats out of the way, here are the figures.
* Owned by AB InBev or Molson Coors
** Closed or sold in early 2021.
Since a single year only provides a snapshot, and since this Covid year provides a very weird snapshot, let’s have a look at longitudinal performance. First up, let’s have a look at the larges breweries in Oregon. (Widmer/CBA is not included because for years the OLCC didn’t track them owing to some kind of weird quirk in the system.) Some general trends will be obvious, but let me highlight two things for you. Despite Ninkasi’s gaudy numbers, Deschutes are the ones that leap off the page. The brewery has been in a decline for seven straight years—you have to go all the way back to 2013 to find growth. In 2014, the brewery dominated the state and sold over 90,000 barrels; this year they sold just above 50k. That may also hint at the logic of the Boneyard purchase. Perhaps it was as much a way of shoring up sales in Oregon as a reach for regional growth.
Hop Valley and 10 Barrel are both interesting cases as well. Soon after Molson Coors (then MillerCoors) and ABI purchased them, beers from those breweries instantly started appearing on every convenience/grocery store shelf in the state. They shot up immediately, but have been relatively flat lately—and 10 Barrel is in active decline. Have a look.
Next I want to highlight a group of smaller breweries that have been consistently growing over the same period—and which have all turned into sizable operations. This is certainly one clue to the problems confronting Deschutes. Oregon has a mature market, growing, but slowly. Over the seven years Deschutes declined 40,000 barrels, the five listed below grew by 76,000 barrels.
The effect of Covid is especially pronounced here, and one hopes/imagines breweries like pFriem and Breakside will bounce back once draft sales come back online. If we consider the example of Pelican, they may even be in a stronger position for growth than they were pre-pandemic. When Pelican decided to build a large production facility, it pushed into stores aggressively, and you can see the results. Now that other breweries have been forced by Covid to do the same, they have earned good store placements and are in a position to slingshot into a future more balanced by draft and package sales. On the other hand, we should exercise some caution as well. The example of the legacy breweries from the first graph illustrates that good placements in grocery stores can only take you so far.