Brewery Growth Since 2009 Needs an Explanation

You look at the Portland beer market and you wonder. There's plenty of crap beer being consumed out there. You know it. PBR is popular, and not just with hipsters. I see lots of people drinking Miller High Life, Hamm's, Rainier, Bud Light and Coors Light.

And then you have craft beer. And all those breweries. Beervana, as it were.

According to the Oregon Brewers Guild, there were 51 breweries operating in Portland at the end of 2012. Add another 17 for a total of 68 in the greater metro area. I'm quite sure we've wedged a few more into the mix since the end of the year, but never mind. These are serious numbers as is.

I've been toying with the question of why we have so many breweries as part of the book project I've alluded to. Yes, we have more breweries than any city in the world. Yes, we consume a ton of draft beer. Yes, we have a lot of pubs. Yes, the shitty climate contributes to the strong pub culture. Indeed, there are probably a number of reasons for the popularity of good beer here.

But the brewery numbers are a bit deceptive. Our path to 51 breweries has not been at all gradual. More than 40 percent of the breweries we have (22 of 51) have launched since 2009. In that year, we started with just 29. After adding only two in 2009, growth went berserk: Seven in 2010; five in 2011; eight in 2012. I hesitate to guess where the number will be at the end of 2013.

The question is this: What is so special about the years since 2009? Things were relatively stable prior to that time. Since then, we've been in the midst of a severe economic downturn that has caused all kinds of displacement here and everywhere. Yet brewery growth has gone crazy. How can we possibly explain it? I'm tossing that out there. Chime in with your thoughts.

Portland's Original Craft Beer? Maybe

There's not been much happening on this blog, the consequence of a book project that is nearing completion, but still consuming most of my time of late. That project will soon be put to bed and I'll be providing additional details.

Bottling #13 was sold very briefly in 1978 

Meanwhile, a trip back to 1976 is in order. At the time, Blitz-Weinhard had been struggling to exist in a market increasingly dominated by big beer. Bill and Henry Wessinger, great grandsons of Henry Weinhard, were running the company and decided on a bold move.

They noticed that the big brands had largely ignored certain parts of the market. Instead of fighting a losing battle for a shrinking share of the industrial lager segment, the Wessingers opted to go after a different market. The result was Henry Weinhard's Private Reserve.

Private Reserve was marketed as a super premium beer based on a nineteenth century recipe and brewed with malted barley, hops and water. This was clearly a shot at the adjunct-heavy lagers of the day. Private Reserve was a huge success and revived Blitz-Weinhard.

Make no mistake. The original Private Reserve was a good beer, certainly a lot better than Bud, Coors, Miller and any of the other crap lagers. Some have even argued Private Reserve was Portland's original craft beer. And maybe it was. Each bottling was numbered and they blew well past 100 before they eventually stopped using numbers.

The concept of a premium product that would go after the big brands at their weakest point would be used by future craft brewers. When Kurt Widmer was researching the idea of starting a brewery, he saw the growing import segment as his niche. It made sense and it worked. But Blitz had already tested the formula.

For Blitz-Weinhard, Private Reserve turned out to be a shining moment in a sea of despair. The Wessingers saw an increasingly difficult financial road ahead and eventually sold the company, which they continued to manage, to Pabst in 1979. As most people around these parts know, the brewery went through several more buyouts before the lights went out for good in 1999.

After the old brewery was closed, the brands went their separate ways. Most of the middling brands were sold to Pabst. The premium brands, which by then included Private Reserve, Blue Boar Light Irish Style Ale and Private Reserve Dark, went to Miller. Stroh, which owned the property at the end, sold it to a developer for a king's ransom.

In my mind, Weinhard's premium beers were a shadow their former selves long before production moved, first to the old Olympia plant in Tumwater, then to Full Sail in Hood River and more recently to a plant in some unknown location. Miller is apparently intent on distributing the beers to a wider audience...what's left of them, anyway. Oh well.

Atomic Pizza and Hollywood Theater Team Up

The recently opened Atomic Pizza in the Hollywood District is a nice addition to an area that is bustling with growth and activity. They've got great pizza and a rotating selection a craft beers pouring from five taps. They made add more.

Welcome

I stopped in not long after they opened a while back. This was based mostly on info from social media. They were pouring beers by Occidental, Breakside, Burnside, Ninkasi and Oakshire. They also have a small selection of bottles. Good stuff.

What goes good with great beer? Great pizza, of course. For me, great crust is the most important element of good pizza. Atomic has it. They make their own dough and the sauces are handmade, as well. When baked, the crust is crisp and crunchy without being too hard. I think it could use a bit more salt, but that's a personal preference easily addressed with a salt shaker after the fact.

Main ingredients

Another cool aspect of this place is its connection to the nearby Hollywood Theater. Folks who attend movies and other events at the theater can purchase Atomic Pizza via a pie hole in the main lobby. If you look at the sidewalk space between the two entities, you wouldn't think a connection possible. But this is an old building with catacomb-like passages. 

Atomic can't serve you a beer from the pie hole. No worries, though, because Hollywood Theater has a decent tap selection of its own. When I stopped in to watch The Wrath of Khan for the millionth time back in mid-April, the theater was pouring Occidental Kolsch and beers from Deschutes, Laurelwood, Ninkasi and Lagunitas. And Miller High Life by the (16 oz) can. It doesn't get much better.

The pie hole defined

This area is undergoing a rejuvenation process. A long-empty space next to the theater is now filled with a new building. I believe these are apartments or condos with shops below. New businesses have opened along this strip and the amount of foot and bike traffic is amazing. I live close-by as the crow flies, so I'm happy to see this happening.

By the way, Atomic Pizza has another shop in the Overlook neighborhood on North Killingsworth St. That's actually their original store. I haven't been there, but I understand they offer the same selection of great pies and beers there. No theater, though, unfortunately.

A view from Atomic Pizza to the Theater

Speaking of the theater, this place has some history. It opened in 1926, smack dab in the middle of Prohibition and silent films. No beer or wine served then, folks. It was an odd setting for a theater, remote from downtown. In those days, Sandy Blvd. had streetcar and automobile access. It was considered a luxury theater.

After difficult times in the 1970s, the theater was listed in the National Register of Historic Places in 1983. The non-profit group, Film Action Oregon, bought the place in 1997 and has worked to refurbish it ever since. Today, they screen films from all over the world and support Oregon-based independent film projects. Cool stuff.

New marquee coming soon

Part of the renewal project involved a fundraising campaign to purchase a new marquee for the old girl. That campaign exceeded its goal in late 2011 and the new marquee has been under construction. They hope to get it on the building by summer. More improvements are also planned and you can donate to the cause on their website here if you wish.

Good times in the Hollywood District.

Ecliptic it is for John Harris

John Harris' new brewing endeavor here in Portland will be called Ecliptic Brewing. He announced the name at a media gathering Sunday afternoon, after which the public got the same news. More on why he chose the name shortly.

The sizable cavern

The building that will house Ecliptic Brewing is a former auto body repair shop. No residual solvents or stinky smells, thanks very much. The place is huge...14,175 square feet. When he was looking for a building, John figured he needed 10,000 square feet. Then he got to thinking about the need to expand and do barrel aging. "More space," he said to himself. Then he found this place, a perfect fit.

Harris expects to use about 3,000 square feet for the pub and restaurant part of the operation, which will also have an outdoor patio. The brewery will consume some portion of the remaining space, but he'll have plenty of room for expansion and other activities. Architect Julia Wood is working with John to design a space that integrates sustainable principles and functional efficiency.

The blueprint

The name is a play on John's interest in astronomy. He apparently enjoys gazing at celestial bodies when he isn't occupied with thoughts of beer or drinking beer. You wonder where he finds the time. Ecliptic represents the earth's journey around the sun, which plays into brewing in a variety of ways. Look it up.

About the beer, the brewing system here will be a 15 bbl system. In an interesting twist, Harris acquired the original Bridgeport Brewing system from Dogfish Head. No word on when the old system washed up on the east coast, but it will be used in Portland again soon.

Harris talks with Channel 8

You may recall my earlier post, where I talked about John's background at McMenamin's, Deschutes and Full Sail. He intends to make Ecliptic unique. "I definitely plan to do some things differently than everyone else. I can't really talk about the specifics or those things wouldn't be unique anymore," he said. "You'll see soon enough."

When will this place open? That's an interesting question. They are apparently waiting on permits and hope to start construction in 6-8 weeks. Some of the demo may start sooner. Harris hopes to be brewing by mid-summer, which seems fairly optimistic to me, and hopes to open the pub in the fall. Obviously, everything depends on how well things go...there's a lot to be done.

The on-the-floor schematic

Located in what Julia Wood described as "the gateway to Mississippi," Ecliptic has landed on a terrific spot. I suspect its arrival will simply extend the carnival that is Mississippi north of Fremont. It's only a block to the south, so not much further to walk, ride or drive (yes, Santa, there is a parking lot).

For a lot of reasons, this looks like a great venture.

Logsdon Tapping Seques to Biergarten Grand Opening

I had the same idea as a lot of people Saturday afternoon. Seeing that Logsdon had pulled out of the Cheers to Belgian Beers festival, I headed over to Belmont Station to partake of some Logsdon beers. There was a good crowd of people hanging out there. And some good beers.

Peche 'n Brett

If you don't know the details of why Logsdon pulled out of the Cheers fest, the story is covered well here. The short version is the festival, which was taken over by the Oregon Brewers Guild this year, altered several of the prior guidelines. Logsdon didn't like it, so they chose to take their beer elsewhere. Follow the link if you need more detail.

Many people were going for tasting flights when I arrived. The Flight of the Day included four Logsdon beers, but not the one I wanted...the Peche 'n Brett. So I ordered a glass of it and started sipping. Good stuff. Mildly tart with a great flavor.

A number of people seated around the bar and at tables had bottles of Peche 'n Brett in front of them. In some cases, the bottles were cradled. The supply was limited and I have no idea how many they sold. However, I do know they sold out early on.

Spacious new patio/biergarten

The trip to Belmont Station gave me a chance to look over their new biergarten patio, which has been in the works for over a year, I believe. They had to deal with a lot of city red tape as part of the process. Oh well, the area is opening just in time for the coming summer months. 

You'll see the passageway to the patio as you walk toward the back of the Bier Cafe and past the restroom. From the top of the stairs you can look down on the area. Skylights help keep it bright by day. It was just cool enough on Saturday that the ceiling-mounted space heaters were pumping out some light heat. The glass garage doors along the south wall were closed, but they'll be open when warm weather arrives. This is basically an open patio by summer, an enclosed extension of the bar by winter. Good combo.

Food cart = more food choices

Food has always been kind of sparse in the Bier Cafe. To rectify that situation, there's now a food cart next to the biergarten. The Italian Market cart has a selection of sandwiches with an Italian flavor, as well as other snacks and quick bites.

The folks at Belmont Station will christen the Rich Bobkin Memorial Biergarten on Monday night (yep, that's tonight). Bob was a longtime friend and patron who passed away two years ago. They will then have some special tappings during grand opening week. Check their website for details.

For me, the new patio puts the Bier Cafe on my hit list. The tap list is always good here. Now they have a very cool outdoor area to sit and enjoy. And more food choices is a smart idea.

John Harris? Who the Hell is He?

You've probably heard John Harris is getting ready to open a brewery and pub over on Mississippi and Cook. If not, you heard it here first. John's holding a sneak preview of what he's up to on Sunday, April 28, from 2-4 p.m. He'll reveal what he plans to call the place, among other things. But wait. Who the hell is John Harris?

The collaboration with ex-employee Tony Lawrence was a hit

Even if you don't recognize John's photo or known him, you almost certainly know some of his beers if you've been around Oregon beer for any length of time. See, John has been part of the beer scene around these parts for 26 years...and counting. He's what you call an icon, even if you don't know him.

John began his professional brewing career with McMenamin's at the Hillsdale Pub. After the Brewpub Bill passed in 1985, Hillsdale was the first pub to take advantage of the law and start brewing. When they advertised for a brewer, John applied. He had some homebrewing experience, nothing more. As he joked when I spoke to him a while back, "I had no experience, but they hired me anyway." That's kind of the way it was in those days.

He got off to a rough start. "When I was hired, they told me to bring rubber boots my first day. But I forgot to buy them and showed up in hiking boots. That didn't work out too well when it came time to shovel the hops out of the brew kettle. But they didn't fire me, thankfully."

Unknown to many, they were using malt extract to brew at Hillsdale in the early days. They didn't have the ability to mash, so they bought 50-gallon drums of extract and used that. The beers were okay, never great. Other brewers made fun of them. About a year later, they started mashing and the Hillsdale beers eventually got better. Harris was there.

"The cool thing about McMenamin's is you had your own brewery. They gave you a lot of freedom to create stuff. We brewed with fruit, which was not common at the time…rhubarb, strawberries, raspberries. Some recipes worked better than others. There were times when they would say, 'Don’t make that again.'”

After two years (1986-88), Harris took a job at a little place called Deschutes Brewing in Bend. Deschutes was just getting started and he had a major role in developing recipes that were and are infamous in Oregon and beyond.

"I developed the recipes for Mirror Pond, Bachelor Bitter, Black Butte Porter and Obsidian Stout…all the good stuff," he said. "That’s where I made my name." Later in his four-year tenure at Deschutes, John hired Tony Lawrence to clean up the place after brewing day. Lawrence eventually left for Arizona, but subsequently returned and launched...Boneyard Brewing. 

John left Deschutes in 1992 and returned to Portland to work for Full Sail. Full Sail had opened in 1987 in Hood River and was well-known...in large part because they were the first craft brewery to start bottling. But they wanted a pub presence in Portland. The Pilsner Room on the South Waterfront seemed the perfect spot.

"I moved to the Pilsner Room in 1992," Harris recalled. "The place was still run by McCormick and Schmick. Pretty soon we made all Full Sail's draft beer for Portland in that brewery. We made the first IPA here…in 1994. Later, I started the Brewmaster Reserve Program, which was small batches, special beers. The brewery here was good because it gave locals a chance to taste Full Sail's specialty beers without going to Hood River."

Harris left Full Sail after 20 years in 2012. His plan all along was to start his own brewery and pub, but it took longer than he had hoped to find the right location with the right combination of attributes. Now that he has things moving along, it will interesting to see what he comes up with. Should be good stuff.

If you plan to stop by on the 28th, keep in mind there won't be any beer. Not yet. But there are lots of places in the area to get a beer once you've taken a gander at John's plans.

Washington Beer Tax? I Got an Uncle Lives in Taxes

The current flap over beer taxes in Washington state reminds me of the old Marx Brothers quip having to do with taxes...or something. "Hey, I got an uncle lives in Taxes...Dollars, Taxes." That's funny. What's happening in Washington isn't.

Nah, I'm talking about taxes, money, dollars

This mess has been discussed at length in the beer community. In 2010, the Washington Leg implemented a sort of sin tax. It affected candy, pop, bottled water, beer and even some professional occupations. The idea was to close a $2.8 billion budget hole. The excise tax on beer jumped from 26 to 76 cents per gallon. This was supposed to be a temporary tax, set to expire on June 30, 2013. Naturally.

To insulate the state's craft brewers, the Leg exempted them from the tax. Brewers selling more than 60,000 barrels a year were stuck paying it; little guys weren't. Since that time, the big guys have been shelling out $23.58 per 31-gallon barrel. Small brewers have been paying $4.78.

A couple of weeks back, Gov. Jay Inslee announced that he wants to make the beer tax permanent. Worse, he wants to remove the exemption for craft brewers. The folks in Olympia evidently see this as an easy way out of the state's continued financial problems in a woeful economy.

Part of the issue here is that the tax on beer is about all that's left of the 2010 tax package. The soft drink companies spent $16 million to pass an initiative that wiped out the tax on soda and water. The beer industry likely would have done the same thing, but they were busy trying to scuttle the liquor privatization initiative...which passed with disastrous results for Washington consumers. But never mind. That's another messy story.

A couple more things about the beer tax:

1. First, it will apply to all beer sold in Washington. It will certainly cut into the profit margins of in-state craft brewers. Beer from states like Oregon, where the per barrel tax is low (8 cents per gallon, $2.48 per barrel) will be taxed at the higher rate when sold in Washington. Distributors will pay the tax, which will be passed on to consumers in the form of higher prices.
   
   
2. Second, big guys won't feel the impact of this tax. That's because they spread their tax burden around. Since tax rates vary around the country, the big guys simply suck it up and subsidize sales in states with high taxes with the extra money they make in low tax states. That's why Washingtonians haven't seen a spike in macro prices since 2010...and likely won't see one if Inslee gets his way.

Make no mistake, this proposal is bad news. It will cripple the craft beer industry in Washington if it happens. Most small breweries are nothing more than small businesses that cannot absorb this kind of financial hit. Jobs will be lost. Breweries will close. It's no wonder people connected to the industry in Washington are hysterical. Any Oregon governor who tried to pull something like this would be run out of the state on a rail.

Stick around...it's early

Washington craft beer brings $4.3 billion into the state annually. New breweries have been popping up all over the place at a time when there aren't a lot of bright spots in the economy. It's almost unfathomable that state leaders would consider wounding this industry. At least one publication thinks Washington state has the most regressive tax system in the country. Yikes!

Washington craft brewers are wondering how this happened. They're thinking they've never been so insulted. Hey, stick around...it's early.

State excise tax rates on beer are here.