Oregon Alcohol: Demand, Employment and Privatization
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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.
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Oregon Alcohol: Demand, Employment and Privatization
- 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
- 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
- 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
- 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
- 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: 155 Cottage Street NE Salem, OR 97301 (503) 378-3405 oea.info@state.or.us www.oregon.gov/das/oea Social Media: oregoneconomicanalysis.wordpress.com @OR_EconAnalysis