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Monday, May 7, 2018

Long Odds at Portland Brewing

Bringing a brewery back from the edge of oblivion is a tough assignment. But that's exactly what's been going on at Portland Brewing, where management has been diligently working to return the once respected brand to relevance. The odds are stacked against them.

The situation at Portland Brewing is not good. OLCC stats, which are woefully unreliable in a lot of ways, show the brewery dropped 3,700 barrels in volume last year. That translates to a 13 percent decline. Those are Oregon only, if you're wondering. Of course, Portland Brewing isn't the only loser. Bridgeport, Oregon's oldest existing brewery, suffered a 30 percent decline in volume. Yikes!

When you're trying to revive a collapsing brand, the simplest thing you can do is refresh its visuals. So you put some time and effort into redesigning the packaging and graphics. Portland Brewing has done just that, says a recent press release. It's a different look, for sure.

Part of that strategy includes applying "Portland Originals" status to MacTarnahan's, the brewery's flagship amber ale, and Portland IPA, which has been renamed Ink & Roses IPA. The idea is to connect with the brewery's ancient past, when those beers were well-regarded around the city and region. I think applying Originals status to a beer that has been renamed and redesigned (see below) is curious, but never mind.

Yesterday, I picked up bottles of MacTarnahan's and Ink & Roses. Mac's was one of my go-to beers back in the day. We once consumed a pony keg of it at a dog birthday party. The modern rendition seems fine to me. No complaints. Even the IPA, which was altered from its original form to accentuate hops flavors and aromas, was decent, if not spectacular.

The big picture strategy driving the rebranding project is to create a link between Portland Brewing and the city's iconic brewing history. They're doing that by emphasizing the brewery's place in local craft beer history and, hopefully, the industry's future.

Setting aside the packaging and the beer, the strategy is slightly disingenuous. In actual fact, Portland Brewing, like 10 Barrel, Bridgeport and others that have been absorbed by big beer, no longer exists as an independent entity. That's been Portland Brewing's fate since 2004.

A little history. Portland Brewing was founded in 1986 by buddies, Art Larrance, Fred Bowman and Jim Goodwin. It was the last of Portland's four founding breweries to open. The pub on Northwest Flanders was too small virtually from the outset and the brewery eventually moved to its current location in industrial Northwest in 1993.

To finance the move and expansion, founders sold common stock. Soon after they arrived in the industrial area, the company was in financial distress. Local legend and mega investor Mac MacTarnahan soon gained control of the company. But it wasn't a picnic. By the early 2000s, Mac's health was failing and so was the company.

The MacTarnahan family, weary of financing a losing proposition, sold to Pyramid in 2004. Portland Brewing was soon rebranded as MacTarnahan's Brewing. In 2008, Pyramid was acquired by Magic Hat, which was itself acquired by North American Breweries in 2010. Then Costa Rica-based Florida Ice and Farm bought North American Breweries in 2012. Soon thereafter, someone had the good sense to change the name back to Portland Brewing.

Layers of ownership stifled creativity and Portland Brewing drifted aimlessly. The pub stayed busy, but the beers collapsed into irrelevance. It wasn't long before bombers and six-packs of Portland Brewing beer were showing up heavily discounted in grocery and c-stores. You rarely sniffed the stuff in self-respecting bottleshops and beer bars.

That was the situation Robert Rentsch walked into in 2015. Rentsch, a successful brand builder at the Craft Brew Alliance, was hired as general manager of Portland Brewing. His task was and is to rebuild and reinvigorate the brand. When I talked to him shortly after he was hired, he didn't have a full picture of what he would do, but admitted it would be a challenge.

Frankly, I think the attempt to wrap Portland Brewing up with the city's brewing history is a mistake. It might work with drinkers who don't understand why the connection is a fraud, but it won't be enough even if it does get traction. In fact, I believe the chances of returning Portland Brewing to any kind of relevance are sketchy, at best.

The problem is the industry has changed dramatically in recent years. We're seeing craft beer become hyper local. With more than 6,000 breweries, consumers across the country have access to local beer. As a result, they're buying local and turning away from beer made in distant places. That's why regional craft breweries are struggling (see Deschutes, Green Flash, etc.)

Portland Brewing is desperately trying to recapture its local identity because it believes that identity will buy it a piece of the action. But that's largely a mirage. The people who happily stand in line to buy Great Notion beers are never going to buy or order a Portland Brewing beer. They want something local, trendy and preferably one-off...something that carries cool brand status.

For established breweries like Portland Brewing, that kind of product simply isn't very attainable. The places most able to make those kinds of beers are independent, nimble and comfortable making rotating small batches of innovative beers.

Long odds, for sure. But good luck to them.

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