New Ale Plans Heady Hop onto Local Brewery Scene
by Julie Tripp of the Oregonian staff
Monday, November 12, 1984

The U.S. beer industry generally has been in the doldrums for two years, faced with overcapacity to produce more of what fewer are buying.

Of the "Big Six" brewers in the country, only Anhueser Busch, the market share leader, has posted any gains in shipments through August 1984, according to beer industry analysts at First Boston Research.

Reasons for the declines are several, including demographics - fewer Americans are in their prime beer-drinking years; price hikes last year that reduced demand for premium beers; and a shift away from consumption of alcohol and stricter enforcement of drinking and driving laws along with the health boom.

As one Wall Street Journal writer noted, it's hard to jog with a hangover.

The First Boston analysts said in their Oct. 12 report that "With all of these cross currents working against the industry and the perception by investors that the beer business is a 'no growth' business in the future, the investment environment for beer stocks continues to be hostile."

The research team at Goldman Sachs says much the same thing: Sentiment against alcohol abuse is on the rise while beer drinkers in their 20s are on the wane, as the Baby Boom generation begins to turn 40. With an outlook like that for Big Six brewers who sell 90 percent of the beer in the country, why would anyone want to sink his last bean into building a microbrewery in Portland, Ore.?

Work to the advantage

Because demographics, pricing, health and fitness and even stricter law enforcement will work to the advantage, not the detriment, of small local brewers. At least in the opinion of one small, local about-to-be-brewer, Kurt R. Widmer, 32.

Widmer and his brother and father are assembling the equipment now at their Widmer Brewing Co. facility at 1405 N.W. Lovejoy St. They anticipate production of the German Alt ale, "Widmer Alt," by the end of the year. It will be marketed through Portland pubs and taverns on tap, such as is being done this week with the English-style Bridgeport Ale made by Columbia River Brewery in Portland.

Widmer has studied the potential market in Portland as well as beer-making techniques in Germany. He has visited eight microbreweries in Washington and California and has found a market niche he hopes his traditional German brew will fill.

Widmer has watched one of the few growth areas in the U.S. beer market in the last two years - imports - with great interest.

"While the rest of the market has been stagnant or slipping, imports have undergone growth of 10 percent or more for the last seven to 10 years," Widmer said.

"That," he said, "is our market. While American lager beer may account for 90 percent of the total market, there is 10 percent out there willing to say 'I'll try something different.' "They're also willing to pay $1.75 a pint for a local product using local ingredients.

"Beer is where wine was 10 years ago," Widmer said, "It's no longer only a blue-collar drink. There is a lot of variety available. It's really interesting to drink beer now - not to get drunk, but because it's an interesting taste."

"I think the drunken driving law will affect beer sales in this state," Widmer continued. "And I think it will be to our advantage. If you're going to limit yourself to two beers, you want the best beers you can find," Widmer said.

As for the calorie content, Widmer suspects weight-watchers will go for one glass of full-flavored ale rather than opting for "two less tasteful beers."

His choice of German-style Alt, a copper-colored ale that has been brewed in Germany for hundreds of years, was made because first, "I really enjoyed it when I lived in Germany," and second, it is a distinctive product in this market. There are lots of ales, but the German Alt will be unique in Oregon.

Widmer and his family are capitalized for start-up costs of $50,000. The company is raising capital through a private offering.

As for the recipe, "I have the basic balance down now from five years of home brewing," Widmer said. "We're using local malt, local hops, because that's how beers distinguish themselves."

Widmer is leaving for Germany in a week to fine-tune his brew with the brewmaster at a small brewery there.

The first test brewing, meanwhile, will start while he's gone. His brother Robert and father Raymond will get the kinks out of the equipment, some of which was manufactured in Portland especially for the purpose.

Research studies done by Lehman Brothers Kuhn Loeb Research in New York have profiled the import-beer drinker that microbrewers are going after.

Import sales have quadrupled since 1975, Lehman Brothers reported, and strong growth should continue throughout the 1980s. The growth will come because of the change in the image of beer as the working class man's drink and its social acceptance by the white collar class. Imported beer is consumed mainly by people with college degrees and reasonably high incomes in the major metropolitan areas. They are more likely to be single than are regular domestic consumers, said the researchers.