Spotlight On: Oregon

Once again, Oregon is at the forefront of a craft movement. This time it’s not beer, but spirits that are enjoying a diversity of offerings from local entrepreneurs. There are currently more than 30 craft distillers located in Oregon (and not just in Portland). They produce everything from absinthe to whiskey to brandy, taking advantage of the state’s culture and agriculture to develop a growing industry.

Why Oregon? It’s more a question of why not, says Jim Dodge, purchasing manager at the Oregon Liquor Control Commission. Dodge says that Clear Creek Distillery (the state’s first) was allowed to open in the mid-80s because the state simply didn’t have any regulations against it. The owner was an Oregon native whose family owned pear orchards, so he had access to fruit for his products. Soon after, the state allowed the distillery to hold in-store tastings at the distillery, the OLCC distributed the product to retail outlets, and today the company distributes its products nationwide. The industry began with one distillery in Portland, but it didn’t take off until recently.

“There was a significant change in the law a few years ago to allow craft distillers to become a retail liquor agent so they could sell their products at the distillery,” Dodge says. “That was very well-received because it meant that visitors to the distillery didn’t have to go to a local liquor store to buy the product they’d just sampled.”

Since the law changed in 2008, more than two dozen new distilleries have opened in Oregon. One of those was Immortal Spirits in Medford, which was started by two home-brewing friends who fabricate their own gear and credit the Oregon culture with their success.

“The sub-culture in this state really supports local products, even outside of the liquor industry,” says Jesse Gallagher, co-owner of Immortal. “Restaurants and individuals go out of their way to support local food and other products in general, so you have companies that may not be ready for global distribution, but can be successful locally because the people of Oregon are so supportive.”

That spirit of supporting local businesses also extends to the OLCC, which has dedicated part of its website to helping craft distillers and publishes a guide called “Manufacturing and Wholesaling Distilled Spirits in Oregon.” It walks would-be distillers through the process of getting federal and state approvals, as well as marketing and promotional strategies.

“Part of the commission’s obligation to the state is to help Oregon industry, and we have influence over what happens in the spirits industry in our state,” Dodge says. “We do a lot of education these days.”

When Immortal applied for its permit in 2009, Gallagher was able to go to an OLCC satellite office and speak to someone face-to-face about getting licensed. “The representative was very supportive and excited because I was the first distillery in Medford,” he says. “We have a great, constructive relationship with the commission. As I’m getting further into the distribution phase, they’re readily available and it’s clear they want to see the locals succeed.”

A few years ago, Oregon’s warehouse was expanded so the commission could carry 1800 distilled spirits (versus 850 previously). Of those SKU’s, 240 are currently from craft distillers. Dodge says that it’s a large portion of their product mix, but not a large volume. However, since most craft spirits tend to be premium or super-premium, most retail locations can carry fewer bottles and give them more time to develop a customer base.

The retail sales agents try to allow local products entry into the markets, but the distillers still have to convince them their product will sell over time. Dodge says the commission’s goal is to operate a free market that allows products to gain access to stores, but have to prove themselves to remain in the market.

“Ultimately these products bring in a higher profit margin to the state, and they’re satisfying consumers who are looking for something different, not just the same old product,” he says. “We see it as a win-win for the state, consumers and for the distillers.”


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