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Washington beer production decreases for first time in 7 years

 

Washington breweries produced less beer in 2017 than they did in 2016, marking the first time in seven years that the state’s beer production has decreased. A report from JJL shows that from 2016 to 2017 beer production slipped by 44,895 barrels, a 7.7 percent loss.

This does not mean the sky is falling or that the mythical Washington beer bubble has burst. There is a logical explanation. Still, the fact that beer production in Washington decreased is noteworthy. The report just tells us something we all should have figured out on our own, but with one interesting twist.

The JJL report points out that regardless of this decline in production, the Washington beer industry is still quite healthy. The bulk of the decrease is isolated among a few regional brands. Most notably, Redhook Brewing and Elysian Brewing.

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It’s no surprise to hear that Redhook’s numbers were way down: they stopped brewing in Woodinville halfway through the year. Redhook decreased production by 61,553 barrels after decommissioning and selling their production facility in Woodinville, moving production the CBA facility in Portland.

It’s more interesting to hear that Elysian Brewing’s numbers were down. Last year, production dropped by 24,093 barrels. I think most beer enthusiasts around Washington will find that surprising.

According to the report, Washington State appears to be bucking the trend of consolidation, with regional producers like Redhook and Elysian decreasing production, while 54 new licensed breweries produced beer in 2017.

Crisis, What Crisis?

Washington “craft” breweries have never produced more than 630K barrels in a year. I am ignoring the Oly and Rainier beer days. In 2013, Redhook produced 150K of Washington’s 500K total — a very significant portion of the overall. In 2016, Redhook produced 81K of Washington’s 630K total. During the period that the state’s largest producer was winding down to zero, we still experienced growth, for the most part.

I expect to have complete details about Washington’s 2017 beer production within the next month, including a breakdown of which breweries produced the most beer.

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About JJL

JJL is a respected professional services firm that specializes in real estate and investment management, and there is no reason to doubt their numbers.