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Oregon Craft Beer is experiencing a slowdown in sales




BEND, Ore. (AP) – At a time when craft breweries compete more than ever for pubs and taps in pubs, sales are slipping in the industry, even in Bend, known as Beer Town USA.

The slowdown has helped slow sales of Bend's biggest beer success story, the Deschutes Brewery, and made other breweries more involved in their local pubs.

Craft beer sales in Oregon stores, where packaged beer is sold, grew by 0.3 percent in 2017 to 13.8 percent in 2014, said Patrick Livingston, a consultant to Client Insights at IRI, a Chicago-based analytics companies.

In comparison, packaged craft beer sales nationwide increased by 3.8 percent in 201

7, compared with 14.6 percent in 2014.

Craft beer may be a niche market, but it accounts for 28.8 percent of the total Oregon sold beer, Livingston said.

The slowdown in sales is more pronounced in Oregon, Livingston said, because other segments of the market – wine, s pirits, hard-seltzers and malt beverages – have shown dramatic growth.

And some believe that legal recreational marijuana, which experienced its first full year in Oregon in 2016, is a factor.

"I believe that cannabis is affected sales," said Deschutes Brewery CEO Michael LaLonde. Someone might go and have a beer and some food, and the combination of these two things means they do not consume so much alcohol. "

After the first drop in sales in its 30-year-old Deschutes Brewery decided in 2017 to be more flexible in the planned expansion in Roanoke, Virginia. Earlier this month, the brewery announced that it was rejecting government incentives to control the timing of the construction of a second brewery.

The brewery continued to close the $ 3.2 million property in Roanoke and plans to break through in June 2019

"We wanted flexibility so we could monitor the craft beer landscape in Roanoke," said LaLonde. "We do not know what the future means for this facility, we are committed to the site."

Changes like these are not made easy, LaLonde said.

CROWDED MARKET

Craft beer is still king in Central Oregon, home to 26 craft breweries

In Oregon, craft beer accounts for 28.8 percent of all beer dollars, Livingston said. The sales of craft beers in the past 52 weeks in Oregon amounted to 194.8 million US dollars.

"The market is very saturated with an increasing number of breweries and brands competing for the same shelf space," said Livingston. "Beer is a heavily marketed category with more competitors and a flat volume."

Last year, there were more than 6,200 craft breweries nationwide, compared to 1,430 in 2003, according to New York-based Beverage Marketing Corp. Fixed. In Oregon there are 252 craft breweries, according to The Brewers Association.

Craft brewer Roger Worthington, owner of Worthy Brewing, confirmed that the sale was flat. He said brewers' purchases have flattened to 15,000 barrels and remain flat in 2016. But that does not worry Worthington, who has a pub on the east side of Bend near US Highway 20, and plans to open a tap and tacos pub in Bend on Brooks Street in June 19659002 "We See It, too" Worthington said. "The competition is tough, so the breweries need to step up their game, and in any case, the customers are the beneficiaries."

"I love the competition. I see this as an opportunity to step up our game. "

At Worthy, the future is to improve the pub experience and make beer with smaller batches that are fresh and different," said Worthington.

Probably a slowing brewing "It will not affect the local economy very much because it does not employ a lot of people, except in the pubs, "said Kale Donnelly, Labor Analyst at Oregon Employment Department.

" It's still a big attraction for our tourism industry, "said Donnelly," It will not have much impact , Growth across the region is slowing and showing some maturity in the business cycle. It only shows a more sustainable level. "

Like the Central Oregon economy, the craft brewing industry is maturing, which is the reason for the slow sales, said Bart Watson, chief economist of the Brewers Association." The big fish in Bend is Deschutes, Watson said in the United States, it is not considered a great player, he said.

Deschutes last year produced about 335,000 barrels and distributed in 29 states and Washington, DC, according to the company.

What we find is that consumers really trust what we do, "said LaLonde," states like Washington and Oregon are very mature markets, and we found out who we as businesses are important to consumers. "

Craft beer is defined as beer, produced by a small independent brewer that produces 6 million barrels a year, according to The Brewers Association. Breweries in the United States make 1,000 barrels or less per year, Watson said. The United States consumes more than 200 million barrels of beer a year, he said.

One of the main drivers of the craft beer market, Watson said, consumers perceive this as high priced, along with taste and variety,

"Small, locally produced breweries are better than the larger distributed breweries," said Watson. "The growth in the marketplace will come through innovation and make sure they focus their resources where their brand finds the most resonance."

The big employment aspect of craft breweries comes from the pubs, not the brewer's side Damon Runberg, State of Oregon Employment Department Regional Economist. [19659002] "Deschutes (Brewery), which decides to slow down its expansion plan, says more about the state of craft at the national level than about us here in Central Oregon," said Runberg.

No one has to tell John Avella that As CEO of the new Boneyard Beer Pub, which begins on NE Division Street in Bend, Avella is counting on the fact that summer tourism will be a major draw for the new pub the opening of the pub has not yet been scheduled.

"I think the market is still very strong for places like Boneyard," Avella said They are experiencing growth in Portland and Seattle. "

Even though there is strong demand, competition is tough, he said. "Consumers want quality products that are local," said Avella. "They want something that's not corporate, we're proud of the product we make."

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Information from: The Bulletin, http://www.bendbulletin.com


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