Thursday, July 14, 2016

Distilling in Oregon: A Small, Yet Growing Component of the State’s Craft Beverage Industry

When talking about Oregon’s craft beverage industry the conversation typically turns to the myriad of breweries and wineries dispersed across the state. This is for good reason as Oregon is a leader in the craft brewing industry and home to world-class wines. However, distilled beverages are often overlooked. These businesses specializing in the production of spirits or liquor are not particularly large contributors to Oregon’s economy as they are dwarfed by their brewing and winery cousins. Nonetheless, distilled beverages are growing in popularity, which sparked rapid growth in the industry over the past five years.

According to the OLCC, there are over 80 distilling licenses in Oregon. However, a more realistic count of distillers who are actively producing and selling their spirits is closer to 25. In 2015, 22 distilleries employed 219 workers across the state. According to the OLCC, the tax revenue from the sale of distilled spirits was $1.06 billion for the 2013-2015 biennium, which represented a staggering 96 percent of the revenue OLCC collects.

Only about 12 percent of liquor sales in the state were from Oregon distillers. The vast majority of liquor and spirits consumed in Oregon is imported from outside the state. Around 1.1 million gallons of Oregon-made liquor were sold inside the state last year. By far the most purchased Oregon liquor was vodka (40%), followed by whiskey (24%) then rum (15%).

A top 10 list for sales of local distillers in Oregon is a bit deceiving, as the list is completely dominated by Hood River Distillers. The Hood River based distiller sold over 910,000 gallons of liquor in Oregon last year. They produce a variety of brands including HRD, Monarch, Pendleton, and Sinfire, to name a few. The second highest selling local distiller in Oregon was Bendistillery (Crater Lake Spirits), which sold around 47,700 gallons here in Oregon, roughly 5 percent of Hood River Distillers volume sold.

Although Oregon distilleries may not compete with the brewing industry or wineries when looking at jobs or sales, it is growing at a much faster pace than those more well-known craft beverage industries. Expect to see new distilleries arriving soon as the industry is still young and Oregonian’s taste for craft spirits and liquor is on the rise.

To learn more about distilling in Oregon, read Regional Economist Damon Runberg's article "Distilling in Oregon: A Small, Yet Growing Component of the State’s Craft Beverage Industry."

No comments: