OregonEconomic and Demographic

Determinants of the Demand for

Alcohol

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

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

Exposure to Consumer Spending

4

0%

2%

4%

6%

8%

10%

12%

Mo

rro

w

Wh

eele

r

Polk

Co

lum

bia

Lake

Jeff

erso

n

Gra

nt

Cro

ok

Lin

n

Har

ney

Do

ugl

as

Yam

hill

Um

atill

a

Jose

ph

ine

Wal

low

a

Un

ion

Mar

ion

Mal

heu

r

Kla

mat

h

Bak

er

Cla

ckam

as

Co

os

Was

hin

gto

n

Lan

e

Ben

ton

Cu

rry

Ave

rage

Was

co

Jack

son

Gill

iam

/Sh

erm

an

Tilla

mo

ok

Des

chu

tes

Mu

ltn

om

ah

Ho

od

Riv

er

Lin

coln

Cla

tso

p

Leisure & Hospitality Employment, % share of population

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

Allconsumer

units

Lessthan

$5,000

$5,000to

$9,999

$10,000to

$14,999

$15,000to

$19,999

$20,000to

$29,999

$30,000to

$39,999

$40,000to

$49,999

$50,000to

$69,999

$70,000to

$79,999

$80,000to

$99,999

$100,000to

$119,999

$120,000to

$149,999

$150,000and

more

Spending on Alcohol Increases With Household Income

Average annual spending on alcoholic beverages (Dollars, Left)

Share of total spending (right)

Rural Areas Have Not

Improved Until Recently

6

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

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 2010-2012Total: 2.6%

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

OregonDemographics

Deaths Now Outnumber Births

In Many CountiesW

ashin

gto

n

Bento

n

Jeff

ers

on

Morr

ow

Malh

eur

Deschute

s

Lane

Lake

Um

atilla

Dougla

s

Yam

hill

Lin

n

Kla

math

Marion

Cla

ckam

as

Cro

ok

Colu

mbia

Ore

go

n

Harn

ey

Polk

Jackson

Wasco

Unio

n

Coos

Till

am

ook

Baker

Wallo

wa

Gra

nt

Josephin

e

Multnom

ah

Cla

tsop

Curr

y

Hood R

iver

Lin

coln

Gill

iam

Sherm

an

Wheele

r

0%

50%

100%

150%

200%

250%

300%

350%

1980 2010

Ratio of Births to Deaths: Oregon Counties

Migration Matters

12

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

Allconsumer

units

Under25

years

25-34years

35-44years

45-54years

55-64years

65-74years

75 yearsand older

Average Annual Spending on Alcohol (Left)

Share of total spending

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

OregonOregon’s Alcohol Cluster

Local Employment Trends Buck

the RecessionIncluded

• 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 EmploymentBreweries, Wineries, Distilleries, Beer/Wine/Alcohol

Wholesalers, Beer/Wine/Liquor Stores, Drinking Places

United States Oregon

+4,000 Jobs

+51,500 Jobs

OregonPrivatization: Washington’s

Experience

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, likely due to the novelty of being able to purchase anywhere. Flat sales since novelty bump.

Source: Washington State Economic and Revenue Forecast Council

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

Increased Border Sales Post

Privatization

June-October 2012 Sales Relative to June-October 2011

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