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Thursday, January 14, 2021

End of the Road for Portland Brewing

In the olden days of craft beer, one of the first beers that interested me was Bert Grant's Scottish Ale. It was available in Pullman, where I was in graduate school and also one of the few craft beers you could get in a bottle at the time. There weren't that many around and most were draft only.

Of course, that Scottish Ale was one of the beers Portland Brewing began producing for the Portland market when it opened in March 1986. Contract brewing the Bert Grant beers helped get Portland Brewing off the ground. It gave them a reliable cash flow and, just as important, allowed them to tap into Grant's brewing expertise. 

When Grant increased the size of his brewery in Yakima, Portland Brewing lost the contract to brew his beers for this market. But the Grant beers lived on under different names with slightly tweaked recipes (note that Grant wasn't so sure about the tweaking). The Scottish Ale later morphed into McTarnahan's (the original spelling) Amber Ale, the brewery's most popular beer. 

If you're keeping track, Portland Brewing was the last of Portland's founding breweries to open. It was preceded by the short-lived Cartwright, Bridgeport, McMenamins and Widmer. Of those, only McMenamin's survives in more or less its original form. Cartwright lasted two years, Bridgeport closed in 2019 and Widmer (part of the Craft Brew Alliance) recently sold to Anheuser-Busch. 

We learned last week that Portland Brewing will cease operations in early February. The reasons apparently have nothing to do with the raging pandemic, which has caused widespread disaster in craft beer. That makes sense. Portland Brewing closed its pub two years ago and they were strictly production brewing here since. So its demise has more to do with the state of the industry than the pandemic.

High school buddies Art Larrance, Fred Bowman and Jim Goodwin founded Portland Brewing  The original pub on Northwest Flanders (most recently occupied by the now defunct Rogue) instantly became a popular watering hole and night spot. The space was too small virtually from the start and the brewery eventually moved to industrial Northwest in 1993. The problems began there. 

To finance the significantly larger pub and brewery, the founders sold common stock, They had done that since virtually the beginning and there were many smalltime investors who enjoyed owning part of something exciting. Benefits included a free daily pint. But not all investors were small. Local legend Mac MacTarnahan was a major investor. He gained majority ownership soon after the brewery opened in the new place. By 1998, the MacTarnahan name was used on all branding. 

A few years later, Mac was in failing health and so was the company. The MacTarnahan family, tired of pumping cash into a sinking proposition, sold Portland Brewing to Seattle-based Pyramid in 2004. Minority shareholders, including the founders, were shocked and disgruntled when they received pennies on the dollar for their shares while the MacTarnahan family sucked up the bulk of the proceeds. All's fair in war and business.

The real fun started in 2008, when Pyramid was acquired by Magic Hat. Magic Hat itself was acquired by North American Breweries in 2010. Then Costa Rica-based Florida Ice and Farm (FIFCO) bought North American Breweries in 2012. Sensing the error of the MacTarnahan's branding, the parent company changed the name back to Portland Brewing in 2013.

I always assumed the ownership changes and remoteness led to a muddled strategic vision. That judgment may have been incorrect. It's apparent looking at Oregon numbers (graph courtesy of Jeff Alworth) that Portland/Pyramid was growing its business in the immediate aftermath of the ownership turmoil. During a time when the craft brewery count was escalating rapidly and smaller breweries were beginning to lead the industry, Portland/Pyramid was apparently doing just fine.

The size of the brewery likely made that possible. When the founders moved to industrial Northwest, they installed a 130-barrel brewery. It was a costly leap of faith. They thought they would be brewing large batches of standards like MacTarnahan's for the pub and for distribution. The brewery could efficiently produce a variety of different beers in large quantities. Indeed, the size of the brewery is likely what attracted Pyramid and the other buyers. 

As the brewery count exploded and small batch, experimental beers captured the hearts and minds of craft drinkers in more recent times, Portland Brewing's large brewery became an anchor, not an asset. If they wanted to brew something, they had to make a lot of it. I'm guessing that's why they never really competed for drinkers looking for small batch beers. Instead, they relied on beers that sold well in grocery and c-stores, often at sub premium prices.   

Even though things were going relatively well in 2015, North American Breweries wanted more...or possibly realized what was coming. They hired Robert Rentsch as general manager of Portland Brewing/Pyramid. It was a newly created role and Rentsch seemed like a good fit. He had a solid brand building background at the Craft Brew Alliance, where he worked on the national expansion of Kona and helped launch Omission. 

I talked to Rentsch at the pub one afternoon over a beer. He hadn't been on the job long and wasn't sure or wouldn't say how he was going to attack it. The press release announcing his hiring was vague. It talked about creating a localized, community-based approach and building on the heritage of Portland Brewing and Pyramid. But that kind of approach wasn't really in Rentsch's wheelhouse. He had been successful expanding the reach of brands regionally and nationally. 

But I figured he was a smart guy and he'd find a way to make things work. Things clearly didn't go as he hoped. The brewery saw a decline in barrelage each year after 2014, until it finally hit the skids completely in 2020. When I visited the pub for a corporate event in the summer of 2017, I could tell that things were not going well. It was no surprise when the pub closed in late 2018. 

The impending closure of the brewery evidently means Portland Brewing's brands will soon be history. Production of FIFCO brands will move to New York and shipping beers from there to Oregon probably isn't in the cards. I suspect only MacTarnahan's would have any commercial value and perhaps someone here will gobble it up if and when the trademark lapses. That's what happened when Portland Brewing let the Portland Ale trademark lapse. Art Larrance snapped it up and started brewing it at Cascade. Could that happen with MacTarnahan's? Time will tell.

The demise of Portland Brewing effectively closes the book on the early craft brewing days here. For sure, McMenamin's carries on. But McMenamin's is known more for its grandiose properties and the events it hosts than it is for its beer. It's somehow fascinating to me that the big three will all have vanished on about the same 35-year timeline. Bridgeport, 1984-2019; Widmer, 1985-2019; Portland Brewing, 1986-2021. 

My memories of Portland Brewing, outside MacTarnahan's, are vague. I visited the original pub on Flanders only a handful of times after I arrived here in 1989. I spent far more time at Bridgeport during that era. My fondest memories of Portland Brewing include an Octoberfest celebration held in the area around the pub circa 1995-96 and also of going there for lunches and dinners in the 2000s. 

Besides being on the ground floor of the craft beer movement in Portland and Oregon, the most significant contribution of Portland Brewing and the other founding breweries is that they were a learning and proving ground for brewers and others who subsequently contributed to the industry's development in a variety of ways. 

So long, Portland Brewing. Thanks for the memories.

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