Oregon craft beer business keeps growing

Oregon craft beer business keeps growing

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An expansion of the Deschutes Brewery restaurant will include additional seating, a new kitchen, bakery and private party rooms. // Image courtesy Deschutes Brewery
Oregon craft beer, despite fear of falling sales and a hesitation to expand throughout the recession, is doing better than ever. “Everybody seems to be growing right now, it’s a good time,” says Gary Fish, founder of Bend-based Deschutes Brewery.

Craft beer is about 5% of the national beer market. And while consumption of beer overall fell by about 1% last year, craft beer consumption was up 11%. Oregon beer production has increased 15.2% since 2008.

Eugene-based Ninkasi Brewing wrapped up a $4 million expansion last year, and is on track to sell 50,000 barrels this year, up from 30,000 last year. Ashland-based Caldera Brewing grew by 38% in 2010 and has tentative plans to build a new brewery this summer. Standing Stone Brewing, also in Ashland, reports steady growth over the last four years, with projections of 15% growth this year. Portland-based Lompoc Brewing installed a new silo in January of this year that will double its capacity.

Deschutes is currently constructing an $8 million expansion that will add 6,750 square feet to its production facility and will include five new fermentation tanks, a new two-story building to house future processing equipment, an electrical control room, and new restrooms and showers for the staff. The expansion will increase Deschutes’ brewing capacity by about 100,000 barrels per year. The company sold 205,000 barrels in 2010 and is expecting to sell 225,000 this year. Construction is expected to be finished by mid-2012.

The plan has been in the pipeline for years, says Fish, but he waited to see how the recovery would pan out. “Now we can no longer wait, we need the production,” he says.

Kurt Widmer of Widmer Brothers Brewers, which merged with Red Hook in 2008 to create the Craft Brewers Alliance and has since purchased two breweries, points to the relatively small market share that craft beer commands over non-craft competitors. There’s room to grow, he says, and thinks the explosion of craft breweries across the state is a good sign.

“It’s made more and more people interested in beer,” he says. “Clearly, we’ve all benefited from that.”

ILIE MITARU