Expansion Options

Deschutes Brewing looks at options to expand capacity

While expanding in Bend is the preferred and most likely option, Deschutes Brewing Company is looking at a variety of options including expanding beer-making out of state, said Deschutes president Gary Fish in an article in the Bend Bulletin, a local newspaper.

The brewery produced about 180,000 barrels of beer in 2008, and is nearing full capacity.

“We’re getting to the point where we have to make the decision — because if we continue to grow at our current pace, we will be out of capacity within two years,” he said.

Deschutes Brewery’s beer production increased from 162,000 barrels in 2007 to 180,000 barrels in 2008, with eak capacity at the Bend facility is about 220,000 barrels per year. Fish projects about 185,000 barrels will be brewed in 2009.

But the nature of the economy, and the rising costs of beer production and distribution, could mean the brewery expands its production facilities closer to markets outside of Bend, Fish said.

Fish said that while a Bend expansion is preferred, other options under consideration include: acquiring another facility on the West Coast, building a new facility somewhere else, or contracting with another company to make beer outside Bend.

“We would be foolish if we didn’t keep our eyes and ears open to other options if things don’t go as we expect,” he said.

Deschutes Brewery currently sells its beer in 13 states, including Oregon, Washington, Arizona, Alaska, California and Texas.

The company plans expansion this year into Utah and possibly British Columbia. Ultimately, the company plans to sell its beer in all 50 states.

“Does it make sense to make beer here in Bend and ship it off to Florida?” he asked, adding that expansion to the East Coast is not in the company’s immediate plans. “We want to be the best-selling craft brewery in the country. Currently, that is a goal that is still far off.” Deschutes Brewery currently ranks No. 7 in terms of total volume of beer sold among the nation’s craft brewers.

Top 10 craft brewing companies by beer sales volume
1. Boston Beer Co., Boston
2. Sierra Nevada Brewing Co., Chico, Calif.
3. New Belgium Brewing Co., Fort Collins, Colo.
4. Spoetzl Brewery, Shiner, Texas
5. Pyramid Breweries, Seattle
6. Matt Brewing Co., Utica, N.Y.
7. Deschutes Brewery, Bend
8. Boulevard Brewing Co., Kansas City, Mo.
9. Full Sail Brewing Co., Hood River
10. Harpoon Brewery, Boston
(Based on 2007 sales. Revised numbers are due out in April)
Source: Brewers Association, Boulder, Colo