A crowded craft: Has Beervana’s bubble burst?

Special Reports

PORTLAND, Ore. (KOIN) — It’s no secret Portlanders love their beer. When it comes to the number of breweries and bars per capita, Portland ranks among the top 10 cities in the United States, recently earning the city the top spot in a national ranking for beer drinkers.  

But across the city, craft breweries have been closing their doors for good; some of the original players in Portland’s brewing scene are among the casualties. 

Could it be that the city dubbed “Beervana” — where breweries sprouted in nearly every neighborhood over the past few years — is simply over-saturated? 

Or is there more to the story? 

We wanted to know if other factors are to blame, like whether bigger companies are buying out the small craft brew houses or if changes in consumer trends could play a part. 

To fully understand what’s driving the change, KOIN 6 News investigative reporter Emily Burris took a close look at what *is* working for breweries that aren’t only surviving but thriving. 

Successful startup 

Jason Barbee, one of the founders of Level Beer, May 4, 2019. (KOIN) 

Level Beer in Northeast Portland has built a steady base of local regulars over the past few years. Jason Barbee, Geoff Phillips and Shane Watterson combined their decades-worth of experience from working at other local brewing ventures to open their own shop. 

Barbee said when they first started to entertain ideas of opening a brewpub, friends and family members questioned their intent to do so in Portland. 

“We got a lot of ‘Portland? Really? You sure you want to open a brewery there? There’re so many breweries,'” Barbee said. 

Beer vats at Level Beer, May 4, 2019. (KOIN) 

Despite the less-than-encouraging feedback, Level Beer managed to find its niche. In fact, the brewery’s production volume has doubled over the past year, from churning out 2,500 barrels in 2018 to being on track for a 5,000 barrel production in 2019. Already this year, the month of March (typically a slower, offseason month for some brewpubs) saw more business than their peak in the month of July last summer. 

Level Beer’s rise isn’t mirrored across all of Beervana, though. 

Several breweries closed in 2018 and 2019. Arguably the biggest names to fold were Widmer Brothers’ pub and Bridgeport Brewing. 

Smaller breweries, bigger advantage?

January 22, 2019, marked the last call at Widmer Brothers Brewing Pub. The North Portland pub closed its doors after more than 22 years of service, explaining on its website that the decision was based on “profitability challenges” brought on by an explosion in competition. 

But while the loss of a single pub wasn’t a fatal hit to a company like Widmer, other breweries have been forced to board up their entire operation. 

BridgePort Brew Pub closed its doors in March of 2019. (KOIN) 

Such was the case for BridgePort Brewing Company, one of Oregon’s very first craft breweries. It announced in February that its brewing operations would cease immediately. The BrigePort Brew Pub closed the following month. 

Not all closures are the same

“I think if they’d been spaced out by a couple of years – we might not have had the reaction of the gasp that we collectively all had,” writer Jeff Alworth explained. 

Author Jeff Alworth, May 4, 2019. (KOIN) 

Alworth has literally written the book on beer.  As a blogger, podcaster, and the author of “The Beer Bible” and “The Widmer Way: How Two Brothers Led Portland’s Craft Beer Revolution,” he’s studied beer around the world and here at home for decades.  He said for craft breweries to survive going forward, they need to rethink their business models and consider other angles. 

“There are definitely challenges breweries are facing now that they didn’t have to 10 years ago,” Alworth said. “There’s a real challenge in trying to maintain interest in a brand over a period of time.”  

He said when some of the original Portland breweries got their start, it was all about the flagship brand: one beer that would make a name for the brewery.  

“When craft beer started, everything was about building the flagship brand.  Widmer Hefe, MacTarnahan’s Amber, Full Sail Amber Ale, Deschutes Black Butte Porter,” he explained. “Now, we have one of the most educated consumer bases in the world and they know what all these different beers are. They know what a porter is, they know what an IPA is, they know what a saison is and they’re not looking for something familiar, they’re looking for what’s new. If you’re a brewery? You’ve spent all this time trying to build the flagship, and they don’t want the flagship.” 

The trend suggests that smaller, more nimble breweries may have an advantage over the larger establishments in that they can focus on innovation and getting new ideas on draft faster.  That’s a great strategy for trying lots of new and different things, but it’s not always great for growth and scale. 

A pint of beer. (KOIN) 

For those thinking of opening a brewery, especially in a market like Portland, Alworth has some advice: don’t expect to “build the next Widmer empire.” 

“It’s much, much more difficult to expand, to grow really rapidly and expand a regional or national footprint.” 

‘You cannot rest on your laurels in Portland’

Evolving along with the changing landscape of Portland’s craft brew scene is, to put it simply, a challenge. But one of the region’s older craft brew players has managed to stay relevant. 

“When we started out with Bridgeport and Widmer there were less options,” McMenamin owner Dan McMenamin said.

Dan McMenamin, owner of the McMenamins franchise, May 4, 2019. (KOIN) 

He remembers growing up around the family brand seeking to incorporate things they enjoyed in life: beer, wine, and spirits, good food, fun pubs and restaurants, and art.  He says the company has weathered the changes by keeping up with the trends and branching out into lots of different ventures.

But brewing has always remained at the company’s core.

“There’s a lot of breweries and you know there’s some good stuff and you try it and go ‘Ah, that’s really good, we better work on this stuff and make ours better,'” he explained. “You cannot rest on your laurels in Portland, or you’re in trouble.” 

At McMenamins, staying on top of the situation means trying new approaches and experimenting with what works. General Manager Rob Vallance said that might mean making beers with other company resources. 

Barrels at McMenamins, May 4, 2019. (KOIN) 

“Doing beers with coffee because we have a coffee roaster, barrel aging with our distilleries’ barrels,” Vallance explained. “We don’t have to buy them, they just roll down the hill to us.”

At Edgefield, one of their larger brewing operations, the company is experimenting with a unique type of beermaking called coolship spontaneous fermentation.

It’s a unique, age-old technique from Belgium in which wort is exposed to wild yeast in the natural environment, rather than cultivated strains. 

But the fact that they’ve been experimenting with it over the past several years is a testament to how breweries of all ages are being forced to innovate in today’s’ market.

“You’ve got to keep up with what the trends are,” Vallance said.

Another trend McMenamins is pursuing is the rise of craft canning, something both they — and Widmer Brothers have worked to increase in recent years.

But unlike Widmer Brothers canning operations that are now focused on distribution, McMenamins tries to maintain brand interest by keeping the operation close to home. 

“We haven’t really changed our philosophy that much as far as we don’t sell in stores, you have to come to us,” Vallance explained. 

With decades of growth into venues throughout the northwest, they’re able to make that strategy work. 

Still a booming industry

Even though many breweries have closed, craft brewery numbers and production are still hitting all-time highs nationwide. In Portland, the market is ripe for success. 

“We do have a lot of breweries, but we also have more consumption of local beer here than anywhere else in the country, in fact, it’s more than double the national average,” Alworth said.  

And Oregonians love to keep it local.  About two-thirds of the beer sold on draught in Oregon was brewed in the state.  

At the end of the day, all of the players have the same handicap in being forced to evolve and adapt. 

“Some of our more popular breweries in Oregon have been around about 8 to 10 years, so it seems like you can go for quite a while and still be considered relevant and new – but maybe 20 years is a little long in the tooth,” Alworth explained.  

He says one of the biggest problems can come when breweries try to grow into distribution, fighting for premium shelf space against huge companies like MillerCoors and AB InBev. As beer giants move into the craft market, they have the backing and resources behind not only global labels, but also regional brands selling companies or taking on larger partners. 

“It’s difficult to know if the market will get bigger — if more people will drink beer as a percentage of the overall market,” Alworth said. “But, if you look at the beer itself and the brewers themselves, the breweries that are opening today are extraordinary and they’re doing really interesting stuff. The beer that’s getting made in Portland and in Oregon generally, is some of the most interesting beer I’ve ever seen; it rivals the European classics that many beer geeks revere.”

Alworth hopes that worldwide recognition means Portland’s brewing future is bubbling with possibility. 

“In the last 3 or 4 years, ‘beer people’ are putting Portland on their list,” he said.  “We’re in this place right now where some of the best beer is being made.” 

A pint of beer at Level Beer in Portland, May 4, 2019. (KOIN) 

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