COVID-19 Impacts on Oregon’s Breweries and Pubs
by Damon Runberg Regional Economist Crook, Deschutes, Jefferson, Klamath, and Lake counties firstname.lastname@example.org
Last year was difficult for many types of businesses. The COVID-19 pandemic dramatically altered the way we engage the economy. Breweries and brewpubs had been posting slower rates of growth before the onset of the pandemic, but the closure of in-person dining dealt a blow to demand for kegs and employment within the pubs themselves.
In the summer of 2019 there were roughly 9,090 jobs in brewing establishments across the state of Oregon. A brewing establishment is any location that brews beer. A portion of these are manufacturing facilities that produce their beer to be distributed to retailers or restaurants. However, many of the state’s brewing establishments are brewpubs that both brew beer and serve that beer onsite in a more typical restaurant environment.
The dramatic impacts of the pandemic were first seen in second quarter 2020 when covered employment dropped by a staggering 3,500 jobs (-43%) from levels in the first quarter. The drop is even more shocking when you consider the highly seasonal nature of the industry. Typically the spring (second quarter) is a time of hiring for breweries and pubs, which means the loss of 43% of total employment from the first quarter undercounts the true impact to the industry.
As with the economy more broadly, there was an initial V-shaped recovery to employment last summer in Oregon’s brewing industry with these pubs and breweries adding back around 1,950 of the 3,500 jobs lost in the spring of 2020. Even with this sharp rebound in the third quarter, employment in breweries still remained down by around 29% from levels in 2019. As you might expect, the COVID impacts to the brewing industry were much more significant than to the overall economy, but job losses were even more significant than food services and drinking places, where employment was down by 23% from last year.
Behind these higher level numbers we see some interesting trends. There were 217 brewing establishments that reported payroll employment at some point between third quarter 2019 and third quarter 2020. The vast majority of these brewing establishments, 157 (about 72%), posted job losses over that period of time. Perhaps more impressive were the 36 establishments (17%) that posted job gains during such a tumultuous year.
We don’t have a good measure on business closures and openings, but we do know if an establishment stopped reporting employment or began reporting employment for the first time. Fifteen establishments stopped reporting any covered employment by summer 2020. These were not necessarily permanent closures. A few of these may be temporary closures as firms try to ride out the pandemic. However, a few of these were documented permanent closures, including Bridgeport, Lompoc, and The Ram. Interestingly, most of the businesses that announced permanent closures did so before the onset of the pandemic. Perhaps most impressive are the nine brewing establishments that began reporting employment for the first time during the past year. These weren’t necessarily new breweries, but they began paying covered workers for the first time in 2020. Hats off to these entrepreneurs for getting a brewery up and running in such a challenging environment.
Despite the challenges faced in 2020, there is reason for optimism as we move further into 2021. The worst of the pandemic is already behind us with case counts dropping dramatically, hospitalization rates down, and vaccine rollout accelerating. Vaccines are expected to be widely available to the general public by late spring, which should lead to fewer public health restrictions and consumers feeling more comfortable going out to public places such as brewpubs. Combine the “opening” of the economy with the large savings rate and we will likely see a dramatic increase in spending at restaurants. More people in restaurants means more people drinking Oregon beer.