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Wednesday, March 19, 2014

Does Low Pay Help Drive Craft Brewery Growth?

It's hard to argue with success. And the craft beer industry is creating a lot of waves with its success. The Brewers Association's (unofficial) numbers for 2013 were released a short while ago and they show about what you'd expect. Growth across the board.

You can read the details here, but a few things really pop. Craft beer dollar share of the overall beer market hit $14.3 billion, up from $11.9 billion last year. Volume was up, too. We now have more than 2,700 craft breweries, including 413 that opened last year. There are many more on the way.

All of this gets some folks thinking about where this might be headed. Could we be getting close to some kind of saturation point? At what point are there too many craft breweries? I don't have any answers, if you're wondering. I tend to take the position that there's still plenty of room for small output brewpubs. I'm not so sure about production breweries, but I'll leave it at that.

I'm not the only one wondering about the state of the craft beer industry. The Oregon Employment Department recently released a report in which the author, Damon Rundberg, a regional economist who works out of the Bend office, rhetorically asks if the state might be "over-beered." The ongoing expansion, he says, suggests the answer is "no."

Beer fans need to read this report. It's full of all kinds of interesting factoids. For instance, there were 188 breweries operating in the state last summer. Portland and Bend have the most breweries. However, Hood River County, with a brewery for every 3,226 residents, has the most per capita. As Spock might say, "fascinating."

There are some rather enlightening employment stats in the report. More than 5,000 folks earned a living in craft beer as of last summer. That's less than 1 percent of the total private sector jobs in the state, but the brewing industry is growing rapidly and was up 10 percent from 2012. That's far better than the 2.7 percent in the private sector as a whole.

One of the things I had been wondering about recently was compensation. My sense for some time has been that craft beer is not a very lucrative venture for most who work in it. This isn't a new concept to me. I worked in the fitness and music industries for many years. Neither paid very well. I could talk about the publishing business, but never mind.

The Employment Department report is revealing. The majority of jobs in Oregon craft beer are in brewpubs, where the median pay was $12.61 an hour last year. Brewery workers make a little more...$16.24 an hour. Not surprisingly, average industry pay for 2013 was just over $28,000. That compares to $44,000 in the private sector at large, according to the report.

These are obviously some fairly shoddy numbers. To some extent, they are driven by the restaurant aspect of brewpubs, which employ a lot of part-time, often younger workers. Production breweries offer slightly better pay because jobs there are officially considered manufacturing. Still, not very good.

What does this mean? It means that craft beer is typical of a lot of industries in that most of the financial benefits go to the people who own or run the businesses. Average workers aren't in on the success, aren't making a decent living and never will as long as they stay in these jobs.

Of course, there is a proven way out. Once you've paid your dues and learned your way around, you open your own brewery or brewpub. This has happened countless times in Portland, in Oregon and around the country. It's old hat. People see opportunity and they jump. Part of the reason is it doesn't cost a zillion bucks to get started.

So if you want to fully account for the rampant growth in craft beer, it may be worthwhile to factor in the industry's shoddy pay scale as a force that encourages employees to go out on their own. At some point, that option may dry up. For now, it appears to be as good as gold.


  1. Cover story in Oregonian today on Craft Brew industry in Oregon.

  2. A lot if it has to do with minimum wage paid servers, which is a LOT of compensation in comparison to most states. It also varies from brewery to brewery. Those that are interested in having long term employees pay them more and offer benefits- they share the love. Others see workers as replaceable and pay them less since everyone wants a job in a brewery and they have a list of people that would love to take over those jobs. The people that work for little use it as an opportunity to learn and maybe one day will go and do it on their own. There may not be room for all those breweries in Portland, but hopefully they can spread the growth of craft beer to other cities that need it! I also think that a lot of these owners are still most likely paying off huge debts for the business- and it was a risk that they took to get there. BUT I do know how bad it sucks for those who are average workers in the industry, and underpaid. Lots of sides to the story.

  3. Dude, the median wage is shit. This is the issue. You know because you've lived it...and you can't. Even if some brewpubs pay more, others pay less. They take comfort knowing there will always be another wannabe waiting if someone decides to seek greener pastures. It isn't that much different than industries I've worked in and that I mentioned. The good thing on the craft beer side is people can still go out and start their own gig. This won't last forever, but it is an option for now.


Keep it civil, please.