The craft beer industry experienced another year of declining sales with more breweries, taprooms and brew pubs closing than opening, according to the Oregon Brewers Guild.

In Central Oregon, three breweries and brew pubs closed in 2024: Cascade Lakes closed its brewpub on Century Drive, Three Creeks Brewing closed its production facility in Sisters and the Brown Owl, a tap house in the Box Factory closed.

Bend-based brewers adapt to consumer trends

Bend-based brewers adapt to consumer trends

Nationwide there were 399 closures in 2024, of which 35 were in Oregon, according to the guild. In 2023, the number of closures and openings was a wash, according to the association.

Craft brewing is an important element in Central Oregon’s economy. It’s also important to Oregon as there are more than 300 breweries, brew pubs and taprooms that generate more than $8.7 billion in economic output and employ more than 50,000 people, according to Beer Institute and National Beer Wholesalers Association.

“We are experiencing a perfect storm with a number of factors contributing to the decline,” said Sonia Marie Leikam, co-founder of Leikam Brewing and a member of the Oregon Brewers Guild. “Between the uptick in consumption of cannabis and the trend toward non-alcoholic beers, alongside the increases in operational costs, we are seeing less net revenue.”

Overall beer sales were down in the United States in 2023, and craft beer sales represented about 13% of the market, according to the trade group The Brewers Association.

Just like other brewers, James Watts, owner of Silver Moon Brewing, experienced flat growth last year. But Watts said the brew pub and all its activities from bingo to trivia to fundraising help keep the business moving in a positive direction.

And while Silver Moon has not explored the non-alcoholic category, it is planning to launch a home-brewed non-alcoholic hard cider for an “F-cancer” promotion that launches Feb. 3.

“With beer sales being flat or down, we’ve launched a craft hard cider line that’s still a hot commodity,” Watts said. “The process is similar with beer. Making beer is true manufacturing and it’s enormously expensive to brew.”

At Bend’s Deschutes Brewery those factors have added to the challenges in the craft brewing industry, but have been offset by the brewery’s diversification.

Last year saw the brewery expand its non-alcoholic line with a partnership with Patagonia Provisions, a partnership with Costco to sell beer under the Kirkland label said Peer Skrbek, Deschutes Brewery CEO.

Deschutes Brewery sells beer under Kirkland label at Costco

Deschutes Brewery sells beer under Kirkland label at Costco

“It was a wild year,” Skrbek said. “Our partnerships with Costco and Patagonia certainly helped things. If we looked at our core portfolio we’d be flat had it not been for those partnerships. Our non-alcoholic beer exceeded our expectations.”

Deschutes Brewery invests in non-alcoholic craft beer trend with IPA Fresh Squeezed

Deschutes Brewery invests in non-alcoholic craft beer trend with IPA Fresh Squeezed 

In order to stay relevant in this ever-changing environment, brewers have to constantly adapt to consumer and industry tastes. The non-alcoholic sector grew in 2023, Skrbek said.

In its 36th year, Deschutes knows a thing or two about adaptability and soaring costs, Skrbek said. Armed with the progress made by the partnerships, Deschutes is back at the drawing board for innovation and testing new brews including a citrus fruit forward product that could be a beer or a cocktail. Skrbek did not know when that new product would be ready for market.

Consumers often are asking for more cocktails and seltzer, Leikam said.

“We’re seeing that younger consumers are more likely to order cocktails or seltzer at the bar, if they’re going to order alcohol. But even more so, we’re seeing them buy the kombucha and sparkling water.”