Business Has Been Tough for the Traditional Beer Bar, Which Faces Stiff Competition and Lasting Effects From the Pandemic. Can It Survive?

“Americans have generally turned to more ‘experiential’ drinking. So you can get a beer at the zoo, but beer bars are struggling.”

When Alex Kurnellas opened Imperial Bottle Shop & Taproom on Southeast Division Street in 2013, he fulfilled two dreams.

The bar was a path to self-employment, allowing Kurnellas to walk away from his corporate career as a technical writer. But the immediate payoff was becoming fully immersed in the craft beer industry, a passion that prompted him to make pilgrimages to breweries to sample what were, at the time, rare offerings and ferry them back to Portland.

“I used to drive out to Double Mountain [in Hood River] when they released Killer Red and Killer Green,” Kurnellas says. “It was like the only fresh hop beers you could get.”

Thanks to its carefully curated tap list and well-stocked cooler, Imperial gained a loyal, engaged customer base. Four years into operations, Kurnellas and his then-partner, now-wife Shawn Stackpoole were ready to expand. The couple opened a second Imperial on another busy stretch, Northeast Alberta Street, and hoped to see growth similar to that at the Division shop.

They didn’t. Back-to-back blows put the business in a precarious position: Stackpoole was diagnosed with cancer and sales began to slump.

“Shawn was really sick,” Kurnellas says. “We went from running one beer bar with the two of us to just me running two, so I didn’t have time to really grow business there. Then we had COVID, and at a certain time, I think you’re past the point of no return with a business.”

He considered giving up the Alberta location in 2019. Two years of pandemic restrictions later, Kurnellas finally pulled the plug in March. Now he and Stackpoole, who has no evidence of disease anymore, can focus solely on the original site.

“The beer bar was on the downturn before the pandemic,” Kurnellas says.

He rattles off the similar businesses that folded in the year leading up to the outbreak, which included 15th Avenue Hophouse, the Abbey Bar & Bottle Shop and Growlers Taproom Hawthorne.

Since COVID, that list has grown—and not just in Portland: small but beloved operations, like Lincoln City’s Black Squid Beer House, which poured its last pints in mid-March, as well as iconic names that drew tourists and prompted “end of an era” declarations when they went dark, such as Bailey’s in downtown Portland and Denver’s Falling Rock Tap House.

What all of these places have in common is a commitment to serving a wide variety of constantly rotating craft beers made by independent producers. With dozens of taps—larger beer bars boast upward of 100—owners pride themselves on educating customers about what they’re pouring, whether that’s explaining the difference between a lager and an ale or getting into the complex details of making a cold IPA. Some serve food, but most stick to beer and allow customers to bring in their own snacks or takeout from a neighboring restaurant.

This is part of a larger trend. The number of establishments that the U.S. Bureau of Labor Statistics classifies as drinking places (bars, taverns, nightclubs) have steadily declined over the past two decades—from 54,296 in 2001 to 41,942 in 2021.

On a statewide level, the Oregon Liquor and Cannabis Commission reports a reduction over the past two years in the number of limited on-premises sales license holders, which include beer, wine and cider bars. As of April 1, there were 2,447 licensees compared to 2,828 on Jan. 1, 2020.

The pandemic undoubtedly sped along the closure of those nearly 400 watering holes, but overall lower demand for beer could have been a contributing factor. In 2020, sales by independent breweries declined for the first time in the modern craft era by 9.3%. The year before, craft was still growing, but at a crawl—4%, and the overall beer market actually fell by 2%. Figures were more optimistic for 2021. According to the Brewers Association trade group, which released last year’s numbers April 5, production rebounded and grew by 8%, largely due to the return of on-premises drinking.

While taprooms may not be as abundant as they were a decade ago, quality craft beer is easier to find now more than ever.

In Oregon, you can get an IPA fresh from the tap while completing your list of errands at the grocery store, laundromat and bike repair shop. On top of that, pretty much every entertainment venue, from Saturday Market to Oaks Amusement Park to the Woodburn Wooden Shoe Tulip Festival, serves cans, draft or both.

“If I were to describe the trend, it’s twofold,” says Bart Watson, chief economist for the Brewers Association. “The number of places to drink alcohol have increased in recent decades, but the number of places specifically focused on drinking have declined. Americans have generally turned to more ‘experiential’ drinking. So you can get a beer at the zoo, but beer bars are struggling.”

A walk through almost any Portland neighborhood reveals who’s vying for drinkers along with beer bars.

Take, for instance, food cart pods. A growing number of them have a resident bartender on wheels or a clubhouse with someone overseeing the taps. It’s the type of place that would appeal to families with kids who aren’t allowed in many traditional beer bars.

Then there are pop-up event spaces like Function PDX in Northwest, which hosts week- or monthlong tap takeovers that highlight a single brewery. It’s the type of promotion commonly used by beer bars to get customers in the door for exclusive tastings and meet-the-brewer sessions.

Perhaps one of the most formidable rivals to emerge more recently in the Portland area, though, is the brewery-owned satellite taproom. Familiar names such as Breakside, Great Notion, Gigantic, Level and Ex Novo have all spun off one or more locations where the brand’s beer isn’t brewed but simply served, a model that cuts out the need for a third-party distributor. Beer bars, however, are required to buy from either a distributor or a brewery that has a brewery public house license.

“You really have lots of other novel businesses chipping away at ours,” says Kurnellas. “If you opened up a beer bar anywhere in 2010, you were going to be guaranteed successful. Craft beer was something special and cool and new and hard to get. It became ubiquitous, and so you lost that.”

Despite stiff competition, along with the beer bar’s version of long-haul COVID (happy-hour crowds and bar hopping have never really recovered), dozens of taprooms have opened across the state since 2020. Most founders, however, appear to have gone into business with an understanding that beer alone won’t keep barstools filled.

When Tia Williamson and Kris Corey went from employees at Natian Brewery’s bar to owners of the Buckman space they renamed Neighbors Taproom, they felt fortunate to have a built-in clientele. The taphouse is nestled in the first story of an apartment complex and surrounded by at least a half-dozen more. Yet they still thought it was best to remodel the bar—which now has more of a coffee shop vibe, with ballet slipper-pink walls, subway tile and a jungle’s worth of potted plants—and diversify their offerings.

“We knew that just being a taproom might not be enough, even with our location. So we’re like, let’s add coffee,” Williamson says. “We also become a little unique for being a plant-based bar. In all of our coffee we use oat milk, and none of our beers will ever have any milk sugars.”

Where cafe aesthetics and a vegan menu may be keys to success for one beer bar, sporting events and rare kegs have sustained another.

Nebulous Taproom opened in December 2019 in a Beaverton strip mall anchored by Fred Meyer. At nearly 3,500 square feet, the place is practically an arena compared to Portland’s many closet-sized, walk-in taprooms. It’s exactly what the trio of owners were looking for since they knew they wanted to focus on holding large functions.

“That’s kind of our big differentiator,” says co-founder Dayton Rodegerdts, who adds that Nebulous hosts everything from Timbers Sunset Division watch parties to concerts.

The owners also spend up to 20 hours a week calling breweries and poring over distributor lists to hunt down rare kegs. In late March, that was a vanilla-cardamom version of Fort George’s Matryoshka, a popular Russian imperial stout released annually in multiple small batches with different ingredients.

“We focus on high-end, hard-to-get beer,” Rodegerdts says. “We want people to come in here and look at the board of 48 beers and be like, ‘Oh, I’ve never even heard of 24 of those. Tell me about that.’”

As new beer bars open, Kurnellas of Imperial hopes drinkers will remember his place.

“I think the beer bar will always be around,” says Kurnellas. “There are beer bars that are hundreds of years old in Europe. I can’t imagine Belmont Station or BeerMongers not being there. But I think with a saturated market, beer bars need to find a niche. If you’re a new beer bar, you need to do something to appeal to bring people in.”

See more of Willamette Week’s 2022 Beer Issue Here!