Oregon State Economist's presentation to the Oregon Liquor Control Commission on demand for alcohol, employment in the broader industry and Washington's experience post-privatization. Examining trends by age, income, occupation, and city size.

1. OregonEconomic and Demographic
Determinants of the Demand for
Alcohol

2. Spending on Alcohol Is Influenced
by the Business Cycle
-10%
-5%
0%
5%
10%
15%
20%
1970 1975 1980 1985 1990 1995 2000 2005 2010
Spending on spirits for off-premise consumption
GDP
-10%
-5%
0%
5%
10%
15%
20%
1970 1975 1980 1985 1990 1995 2000 2005 2010
Spending on alcohol at eating/drinking establishments GDP

3. 3
Consumer Spending Will No
Longer Drive Growth
25%
30%
35%
40%
45%
50%
1950's 1960's 1970's 1980's 1990's 2000's 2010 to 2020
Gross Domestic Product
Consumer Spending
Real spending and output, % change by decade

4. Exposure to Consumer Spending
4
0%
2%
4%
6%
8%
10%
12%
Morrow
Wheeler
Polk
Columbia
Lake
Jefferson
Grant
Crook
Linn
Harney
Douglas
Yamhill
Umatilla
Josephine
Wallowa
Union
Marion
Malheur
Klamath
Baker
Clackamas
Coos
Washington
Lane
Benton
Curry
Average
Wasco
Jackson
Gilliam/Sherman
Tillamook
Deschutes
Multnomah
HoodRiver
Lincoln
Clatsop
Leisure & Hospitality Employment, % share of population

5. Drinking is Discretionary
5
0.5%
0.6%
0.7%
0.8%
0.9%
1.0%
1.1%
0
200
400
600
800
1000
1200
All
consumer
units
Less
than
$5,000
$5,000
to
$9,999
$10,000
to
$14,999
$15,000
to
$19,999
$20,000
to
$29,999
$30,000
to
$39,999
$40,000
to
$49,999
$50,000
to
$69,999
$70,000
to
$79,999
$80,000
to
$99,999
$100,000
to
$119,999
$120,000
to
$149,999
$150,000
and
more
Spending on Alcohol Increases With Household Income
Average annual spending on alcoholic beverages (Dollars, Left)
Share of total spending (right)

6. Rural Areas Have Not
Improved Until Recently
6

7. Mid-Sized Cities Drink the
Most
7
0.6%
0.7%
0.8%
0.9%
1.0%
1.1%
0
100
200
300
400
500
600
All Consumer
Units
Outside urban
area
Less than
100,000
100,000 to
249,999
250,000 to
999,999
1,000,000 to
2,499,999
2,500,000 to
4,999,999
5,000,000 and
more
Average annual spending on alcohol (left)
Share of total spending

8. Missing Rungs on the Income Ladder
Recent Oregon Job Gains By Occupation
8
$0 $20,000 $40,000 $60,000 $80,000
Management
Healthcare Practitioners
Legal
Arch/Eng
Comp/Math
Biz/Finance
Scientists (including Social)
Construction
Teachers
Protective Service
Install, Maint, & Repair
Arts, Design, Ent
Community Service
Admin Support
Production
Transp & Material Moving
Healthcare Support
Sales
Bldg Cleaning & Maint
Agriculture
Personal Care
Food Prep
Median Wage by Occupational Group, 2012
-10% 0% 10% 20%
Job Growth 2010-2012
Total: 2.6%

9. Alcohol Spending Across
Occupations
9
0.6%
0.7%
0.8%
0.9%
1.0%
1.1%
0
100
200
300
400
500
600
700
800
All otherConstruction workers & mechanicsService workers RetiredOperators, fabricators and laborersManagers & professionalsTechnical, sales and clerical workersSelf-employed
Average annual spending on alcohol (left)
Share of total spending

10. Oregon
Demographics

11. Deaths Now Outnumber Births
In Many Counties
Washington
Benton
Jefferson
Morrow
Malheur
Deschutes
Lane
Lake
Umatilla
Douglas
Yamhill
Linn
Klamath
Marion
Clackamas
Crook
Columbia
Oregon
Harney
Polk
Jackson
Wasco
Union
Coos
Tillamook
Baker
Wallowa
Grant
Josephine
Multnomah
Clatsop
Curry
HoodRiver
Lincoln
Gilliam
Sherman
Wheeler
0%
50%
100%
150%
200%
250%
300%
350%
1980 2010
Ratio of Births to Deaths: Oregon Counties

12. Migration Matters
12

13. Alcohol Spending and Age
0.50%
0.60%
0.70%
0.80%
0.90%
1.00%
1.10%
1.20%
0
100
200
300
400
500
600
All
consumer
units
Under
25
years
25-34
years
35-44
years
45-54
years
55-64
years
65-74
years
75 years
and older
Average Annual Spending on Alcohol (Left)
Share of total spending

14. Age-Based Alcohol Sales
Forecast
0.82%
0.84%
0.86%
0.88%
0.90%
0.92%
0.94%
345
350
355
360
365
370
375
380
385
390
395
1980 1985 1990 1995 2000 2005 2010 2015 2020 2025
Estimated Average Annual Volume of Alcohol Sales
Based on Oregon Age Mix
Estimated Share of Spending on Alcohol Based on
Age Mix

15. Oregon
Oregon’s Alcohol Cluster

16. Local Employment Trends Buck
the Recession
Included
• Breweries (NAICS 31212)
• Wineries (NAICS 31213)
• Distilleries (NAIS 31214)
• Beer & Ale Wholesalers
(NAICS 42481)
• Wine & Alcohol Wholesalers
(NAICS 42482)
• Beer/Wine/Liquor Stores
(NAICS 44531)
• Drinking Places (NAICS 7224)
Missing
• Brewpubs that are classified
as Restaurants
• Grocery stores, other places to
purchase beer/wine
• Likely do not impact the trend
much, but certainly the total
employment count.
16
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Alcohol Cluster Employment
Breweries, Wineries, Distilleries, Beer/Wine/Alcohol
Wholesalers, Beer/Wine/Liquor Stores, Drinking Places
United States Oregon
+4,000 Jobs
+51,500 Jobs

17. OregonPrivatization: Washington’s
Experience

18. Customers Feel the Squeeze
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
-5%
0%
5%
10%
15%
20%
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Washington Liquor Sales, Retail
Year-over-Year Growth (lhs) Average Price per Liter (rhs)
Privatization 
Retail customers
have faced a
10% to 15%
price increase.
Consumers
purchased more
post-
privatization, likel
y due to the
novelty of being
able to purchase
anywhere. Flat
sales since
novelty bump.
Source: Washington State Economic and Revenue Forecast Council

19. Restaurants and Their
Distributors, Less So
Restaurants
have faced less
of a price jump.
Restaurants
stocked up
considerably
prior to
privatization.
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
-30%
-20%
-10%
0%
10%
20%
30%
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
Washington Liquor Sales, Restaurant
Year-over-Year Growth (lhs) Average Price per Liter (rhs)
Privatization 
Source: Washington State Economic and Revenue Forecast Council

20. Increased Border Sales Post
Privatization
June-October 2012 Sales Relative to June-October 2011

21. 21
For More Information
Standard Contact:
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Salem, OR 97301
(503) 378-3405
oea.info@state.or.us
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