OLMIS

by Carolyn B Eagan
Published Aug-16-2012

Brewing Industry Employment Defies Trend Leisure and Hospitality Employs Most Wherever You are in Oregon, There's a Brew Pub Nearby Employment in Other Industries? Conclusion The International Spotlight - Awards, Awards, Awards

From Astoria to Baker City to Klamath Falls, cities all over Oregon are hearing good news from local brewers. In the last 18 months, there have been more than 50 opening or expansion announcements from Oregon brewers. According to the Oregon Brewers' Guild, Oregon is the second largest producer of craft beer in the U.S. Oregon brewers produced more than 1.17 million barrels of beer in 2011. For those of you enjoying a beer at the local brew pub, that calculates to more than 290 million pints and more importantly, 75 pints for each Oregon resident in 2011. It is a lot of beer but it was not all consumed here.

Oregon brewers reported selling 435,200 barrels in Oregon, according to Oregon Liquor Control Commission (OLCC) records in 2011. This is the beer that was consumed here. That works out to 105,753,600 pints or 27 pints per Oregon resident. But not everyone in Oregon is of legal drinking age, so the per capita pint number is closer to 38 pints each.

In late June, the Portland Business Journal published an article on the economic impact of Oregon's brewers. Referencing data compiled by the Oregon Brewers' Guild, Oregon's 110 brewing companies generated $2.44 billion in economic activity in 2011.

Oregon's brewing employment is not tidily tucked into one industry for easy analysis. Depending on what the company does, the brewery and/or brew pub can be classified in any number of industries. Thus the employment analysis started with the Oregon Liquor Control Commission's liquor license list. In June 2012, there were 172 Oregon brew pub (BP), brewery (BRW), or brewery-no consumption (BRWNC) licenses. This list was matched to Oregon's covered employment records. Brew pub and brewery employment was counted regardless of registered industry. In several cases there was more than one establishment linked to a brewing license.

The records revealed 162 businesses that reported employment in 2011. Another 22 businesses were in the records, but did not report employment in 2011. All but one of those opened within the last year.

There were 4,643 brewery and brew pub jobs in 2011. Employment increased by 1,055 jobs or 30 percent since 2007. By comparison, Oregon lost 6 percent of total employment in the same time period. The employment growth appears to be spread evenly between new breweries and brew pubs, and long established ones. Compared with one year ago, Oregon's brewing industry had 330 more jobs (+8%).

To be clear, there were 4,643 jobs in Oregon's breweries and brew pubs that are covered by unemployment insurance. There are certainly jobs in Oregon's brewing industry in addition to those 4,643 jobs. For example, there are dozens of cases where in addition to having a handful of employees, a brewery or brew pub also has officers (owners) of the company. In these cases, the officers are allowed to opt out of paying unemployment insurance for the officers, aptly referred to as "non-covered officers". In these cases, a brewery or brew pub would have more people working than are in the covered employment records.

Also, 4,643 is an annual average. Almost without exception, Oregon brewers and brew pubs have more employees in July and August than they do in February and March. In August 2011, there were 5,040 jobs, nearly 9 percent more than the annual average. Still, annual employment numbers give a view of trends in Oregon brewing over time.

The majority of Oregon's brew pub and brewery employment is found in the leisure and hospitality industry, specifically food services and drinking places. In 2011, 128 of the business units were in this industry. The next most represented industry was beverage manufacturing; 36 business units were found in this category. This left 10 units that were classified in a variety of other industries and a handful that are not yet classified.

Since the bulk of the business units are classified in food services and drinking places, it is no surprise that the majority of the employment is there, too. In 2011, there were 3,680 brewing jobs in this industry (Graph 1). That is nearly 80 percent of all of the brewing employment in Oregon. Food services and drinking places had 122,800 jobs in 2011, so brew pubs and brewery employment accounted for 3 percent of that industry's jobs.

There were 750 brewing jobs in beverage manufacturing in 2011. They made up just 16 percent of the brewing employment, but they paid higher wages. Brewing jobs accounted for 22 percent of the beverage manufacturing employment in the state. The majority of the state's beverage manufacturing employment is at the state's 198 wineries.

At the 10 businesses that were found on the OLCC license list but not classified in food services and drinking places or in beverage manufacturing, there were 216 employees. These employees are among the highest paid in the brewing industry. The industries range from wholesale and retail trade to professional services.

Just as the employment details were available by industry, so are wages. The annual average wage was $27,110 in the brewing industry. The wage is noticeably lower than Oregon's private-sector annual average wage of $42,421. In beverage manufacturing, it was $33,120; the annual average wage of breweries in this industry was $36,400. In food services and drinking places, it was $19,640; the annual average wage of breweries in this industry was $22,200. As mentioned above, the highest wages in Oregon's brewing industry were found in the "other" category. The annual average wage for brewing jobs in that industry was $75,390.

An analysis of Oregon wage records tell a little more about who works in Oregon's brewing industry. Nearly 50 percent of the workers employed by Oregon breweries and brew pubs in the summer of 2011 were also employed in breweries or in leisure and hospitality in the summer of 2007. Another 40 percent were not in Oregon wage records four years ago. Oregon's brewery and brew pub employers are not only holding on to long-time employees, they are attracting new workers as well.

Two-thirds of Oregon counties (that's 24 counties) have a brew pub or a brewery. The majority of establishments were in the Portland Metro area (Clackamas, Multnomah, and Washington counties) - the area accounted for 100 establishments (Graph 2). The other 84 units (most are employers, some are not) are dispersed across the state. Eastern Oregon is represented well when the total population is considered. With seven brew pubs in Eastern Oregon, there are 15,000 people for every unit (Table 1). Compare that with the Portland metro area where there are 16,600 people for each brewery or brew pub unit. Oregonians with the shortest walk to the local brew pub are the north coast where there are 9,890 people for each establishment. In Central Oregon, the region with the highest number of brewing or brew pub jobs per capita, there are 11,857 people for each brewery or brew pub.

In 2010, Oregon was ranked second by the Brewers Association for states' brewery per capita with 31,660 people for each brew pub. At that time, they counted 110 breweries. Using the 184 brewery and brew pub units from this analysis (units with or without employment) and the Population Research Center's 2011 Oregon population estimate, in 2011 there were just 20,965 Oregonians per brewery. That puts Oregon well above Vermont, the 2010 number one ranked state. In 2010, Vermont had 27,800 people per brewery. The Brewers Association has not published a 2011 ranking.

When it comes to jobs per region, it is Central Oregon that takes the gold medal. Central Oregon breweries and brew pubs employed 513 people in 2011. The three-county region has one brewing industry job for every 390 people. In Portland the ratio is 620 people per brewing job. And although the north coast counties have a lot of brew pubs, there was one brewing job for every 460 residents.

The job growth from region to region since 2007 not only defies overall employment trends, in some cases the number of jobs has more than doubled. Between 2007 and 2011, the number of brewing industry jobs in Eastern Oregon increased by 140 percent. Portland metro area breweries and brew pubs added the greatest number of jobs in the last four years (+561).

So does all this employment in Oregon's brewing industry create jobs elsewhere? The answer: Probably. It is difficult to measure the total number, from silicone pint glasses to cycle pub and brew tour reservations. It suffices to say a considerable amount of economic activity is generated by the state's brewing reputation.

One of the newer offshoots is growler filling stations. Modeled after the beer-to-go stores in Europe, these shops allow you to purchase a growler (a half-gallon glass or ceramic jug), fill it with your favorite local beer, and take it home. Thus, in the comfort of home one can enjoy a local brew that may never be bottled or canned. For one local convenience store and gas station in Bend, the concept has been so well received that they are planning to expand their selection. It is hard to say if the growler filling station at the filling station is bringing in a more diverse clientele, but there is no question about the concept's popularity.

A handful of brewery and brew pub openings that have been announced were not in the 2011 employment records. Thus Oregon's brewing industry is teed up to continue defying trends and add more employment this year. With so much activity, 2012 is sure to be another banner year for Oregon's breweries and brew pubs.

The state's brewing employment is concentrated in a couple of regions, but the awards won by Oregon Brewers at the 2012 Brewers Association World Beer Cup were for brews created all around the state. As announced on the Oregon Brewers' Guild website, Oregon brewers competed against brewers from 54 counties and 44 states, 799 breweries in all. Oregon came away with 12 medals, and the World Beer Cup Champion award went to Pelican Pub in Pacific City. It was the second time that the Pelican Pub was awarded this distinction. For more information on Oregon Brewers' Awards, check out the Oregon Brewers Guild website at www.oregonbeer.org.