The Thirsty Beagle: Study: Oklahoma craft beer industry has $415M economic impact

Tuesday, January 26, 2016

Study: Oklahoma craft beer industry has $415M economic impact

A recently released study from the University of Central Oklahoma paints an encouraging picture for the economic impact of the Oklahoma craft beer industry, and points to even loftier numbers if craft-brewer friendly alcohol law reforms are passed.

The study, commissioned by the Oklahoma Craft Brewers Guild, states that in 2014, the Oklahoma craft beer industry had a $415.7 million economic impact in the state. A chunk of that impact -- $128.3 million, or 30.8 percent -- is tied directly to income of workers in the craft beer industry.

The remainder is made up of so-called indirect effects, like tax revenue and employment and purchasing in other sectors along the supply and consumption chain, according to the study.

Numbers that are perhaps even more interesting are those derived when you analyze economic impact on a per-barrel or per-glass level.

The study shows that each barrel (approximately 31 gallons) of beer produced by Oklahoma craft brewers had a $16,353 impact in 2014. Each 12-ounce pour of beer had an impact of $65.94.

Some other interesting facts and figures:

-The average pay per employee in the Oklahoma craft beer industry was $49,870. This compensation ranked Oklahoma sixth in the nation in for craft beer employees -- higher than even Texas or California, for example.

-The Oklahoma craft beer industry had the 33rd highest economic impact in the U.S., despite being 47th in total craft beer production.

-The median reported production growth for Oklahoma craft brewers in 2015 was 51 percent.

-Based on that rate of production growth, the Oklahoma craft beer industry's expected economic impact for 2015 would be just shy of $470 million.

While the study naturally could not calculate the exact economic impact in Oklahoma if craft brewers received favorable alcohol law reform, it did presume such a development would help the industry grow tremendously.

"The full potential of this industry remains untapped" in Oklahoma, the study reads.

"Given the existing laws that restrict craft beer production and consumption, there is a large amount of growth potential that could result in a substantial economic benefit to the state."

The study states that in 2014, the industry was responsible for approximately $5.6 million in tax revenues contributed to the state. With a production growth in the industry of only 10 percent, that tax revenue would grow to approximately $7.7 million, the author estimates. That doesn't seem like a big deal -- roughly a $2 million difference -- but in a state looking to diversify its tax base, surely every extra million doesn't hurt.

The study goes into significant details comparing Oklahoma to other like-sized states in terms of production and economic impact.

In production, Oklahoma checked in with 25,425 barrels in 2014. Compare that to Oregon, which produced more than 1 million barrels.

Even subtracting Oregon from the average of like-sized states, Oklahoma still lagged in production, failing to keep pace with an average of more than 66,000 barrels.

It seems pretty clear from everything we know anecdotally that several new brewers would pop up on the market given more forgiving and business-friendly alcohol laws. That leads to one dynamic the study simply cannot predict -- how many barrels would be pumped into the pipeline by brewers who aren't in business right now?

That's just one of many interesting questions we may get answers to as we move through 2016.

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