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Friday, November 3, 2017

OBF Grapples with Attendance Drop, Uncertainty

One of the bigger surprises on last week's beer news radar screen was news that attendance at the Oregon Brewers Festival declined dramatically in 2017. I guess a lot of us probably assumed attendance was declining for the last few years. But the actual number shocked me.

For many years, OBF organizers have been saying the event attracts 80,000 fans to Waterfront Park. That claim was repeated in the promotional materials for this year's event. Then we learned that 2017 attendance was 49,000, an astonishing number.

That information came to light at a Tuesday night briefing at Cascade Barrel House. Jeff Dense, professor of political science and craft beer studies at Eastern Oregon University, gave his annual talk on the OBF's economic impact and other findings.

In case you're wondering and unaware, Dense has been studying the economic impact of OBF since 2011. He and a team of students completed more than 900 on-site interviews this year. As in past years, he used that information, along with data provided by event organizers, to build conclusions.

Some of the findings are intriguing. Nearly half of attendees were from out-of-town this year. Almost the same percentage were attending for the first time. Women accounted for 44 percent of festival attendance. But the drop in attendance is a sore spot, in part because it contributed to an 18 percent decline in economic impact, according to Dense.

Art Larrance, co-founder and director of OBF, stepped forward and said hot weather may have hurt attendance. He also said the sheer number of summer festivals is creating serious competition for the event that launched the festival concept in Oregon 30 years ago. When it started, OBF was the only show in town. Now, beer festivals are an everyday thing, he said.

In response to declining attendance, Larrance said they will eliminate the Wednesday session and reduce the total number of beers to about 80. They also expect to fold up the Specialty Tent, occasionally known as the Buzz Tent or International Tent, and go to a smaller 12 oz mug (four tokens) and 3 oz taster (one token). Oh, and they'll offer cider and wine for the first time ever.

There's a lot going on here, so let me dive into the detail. I spoke to Larrance by phone to get additional perspective on some of these issues.

Attendance is a complicated issue, Larrance said. Even he doesn't fully understand the 49,000 estimate. It's a bit of a mess, actually. The 80,000 attendees organizers have been touting was based on wristbands. But one wristband isn't the same as one attendee because some people visit the festival multiple times. They handed out 70,000 wristbands this year. The 49,000 is an estimate of "unique visitors" based on information collected in the surveys and an equation.

In fact, the attendance numbers aren't as shocking as they first appear. Look at the graphic below, provided by OBF. Of the three years shown, only 2016 exceeded the standard estimate. This year was definitely the low ebb, but it isn't as if they're in multi-year freefall if we go by wristbands. And that's what we have to look at if we want to make a fair comparison.

Hot weather and beer event saturation. Sure it was hot. But we've had heat at this event many times and never heard about draconian attendance declines. Event saturation is certainly an issue. There are beer events happening year-round in this city. The pace intensifies during the summer. I suspect the combination of heat and event fatigue probably kept some locals away. Still, the dropoff isn't a disaster if you look at year-to-year wristbands.

It's something no one wants to talk about in detail, but declining revenue, not attendance, is the true reason behind the panic and push for change. They're selling fewer tokens and less beer, while expenses are staying the same or rising. Larrance talked about the need to cut expenses, which are substantial when you factor in park rental, security, police, etc.

Some of the revenue loss is their own fault. The 2017 glass had a 4 oz taste line, reportedly a mistake. It had been a 3 oz line in recent years. A 2017 taste, for one token, was a great deal for attendees and probably discouraged folks from laying out five tokens on a full mug, 14 ounces this year. In recent years, when tastes were smaller, there was more incentive for folks to fill their 12 oz mugs for four tokens, a boon for organizers. As noted, they'll go back to the smaller glass and taster size next year, thus encouraging more people to pony up four tokens for full glasses of beer. Shazam!

Kicking Wednesday to the curb is an odd idea. Look at the graphic again. Wednesday attendance, which funnels out of the brunch, has been pretty steady. Sunday, on the other hand, is a consistent loser. It looks like Sunday is the day that needs to go. There must be more at work. Perhaps Wednesday, which is heavy on industry and media attendance, is a money pit. Of course.

The Specialty Tent is an easy out. It's mainly an attraction for geeks and it occupied a shady area that might be better-used for seating in hot weather. Since it was comfortable, Larrance said traffic was static and people who hung out there didn't buy all that much beer. Which means it was part of the revenue hit. Losing it isn't a huge deal, except to the geek crowd.

They've offered more than 90 beers under the big tents in recent years. Cutting it to 80 sounds worse than it likely is. Contrary to some claims, OBF organizers actually spend considerable time curating the list of what pours. They actually turn a lot of applications down. If there's a flaw in that process, it may be that they're too loyal to longstanding friends and supporters.

Larrance told me they get frequent requests for gluten-free items. Since there's a lot of good cider and wine in Oregon, he thinks it's reasonable to provide some options outside beer. Bringing in wine and cider will make a few people happy. Will those folks outnumber those who are unhappy about losing the Specialty Tent and Wednesday session? Seems unlikely.

As we talked, Larrance offered up that maybe the OBF has seen its best days. "All events run their course," he said. "With so many choices out there, we can't blame folks who choose to attend other events around town. We're trying to come up with ways to evolve with the times to make this a viable event going forward. It isn't easy."

Indeed, it isn't. The entire face of craft beer has changed since the first OBF in 1988. As I've discussed here before, events and event marketing are driving a lot of what happens in today's industry. I believe an increasing number of modern craft beer fans are looking for a more intimate and personal experience than the OBF provides.

This is much less about the beer than the experience. People enjoy going to smaller events where they can mingle with brewers, brewery owners and others connected to the industry. Check your social media feed for upcoming release parties and tap takeovers. Look how many of those events feature the opportunity to talk with folks who have something to do with the beer.

By comparison, the OBF is impersonal and not at all intimate. The volunteers pouring beer typically know nothing about it and there's rarely anyone around who does. The OBF can and should commit to offering the best possible beer list. But that won't remove the stigma of it being a huge, impersonal drunkfest at a time when more and more folks are looking for something more.

Larrance is thinking outside the box in response to the challenges. He's toying with the idea of bringing in a group of brewers from outside the US and essentially building a mini-fest around them. That's something he tried with brewers from the Netherlands and Japan in recent years, but it sounds like this will be a more serious effort, if it happens. Give him credit for creativity.

I honestly wonder if we're not entering a difficult period for larger, older beer festivals. When I was at GABF in early October, it became clear to me that some of the best action was outside the Convention Center at smaller events. Maybe that's going to happen with OBF. Maybe it will morph into a cluster of smaller events at parks, breweries and pubs around the city.

Craft beer's future is full of intriguing possibilities.

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