Wine

Sector spending increase: 16.6%

The COVID-19 pandemic has flattened growth for Oregon brewers. Sales volumes reported to the Oregon Liquor Control Commission by breweries are down about 28% from last year, and the number of breweries reporting has dipped by 25, a nearly 10% decline.

One of the state's oldest brewers, however, Hood River-based Full Sail, has shifted its business model to meet the moment.

The OLCC's monthly report released Nov. 20 shows that Full Sail is far and away the largest producer of alcoholic beverages taxed as "wine" in Oregon. (Oregon law defines any fermented alcoholic beverage not made from grain and containing less than 21% alcohol as wine.) Through September, Full Sail has produced more than 1.5 million gallons of alcoholic product taxed as wine this year.

That's more than the five largest Oregon wineries combined. And it's about twice the amount Oregon's largest wine producer moved in 2019.

Although best known for its beer, Full Sail also produces a hard ginger ale and a hard kombucha.

Full Sail marketing director Sandra Evans says the explosive increase in the company's sales is attributable to its KYLA Hard Kombucha, which contains up to 6.5% alcohol—about the same as an IPA. It comes in eight flavors and is distributed in 18 states.

"Of Full Sail's volume taxed as wine," Evans says, "the bulk is fermented alcohol products."

Full Sail, whose brewery overlooks the Columbia in downtown Hood River and helped put that city on the map, started making beer in 1987. But its rank among 250 Oregon craft brewers has drifted from fifth in 2017 to 15th today. For most brewers, the most lucrative part of the business, the on-premises pub, has been closed or limited in service since March. And few have the bottling capacity to sell big volume on grocery shelves.

That makes products that companies can sell in grocery stores, such as kombucha, all the more attractive. Wine volumes are up 17% statewide.

OLCC figures show that Full Sail began canning products classified as wine in a big way in 2018, but its production has exploded this year. It produced 403,000 gallons in 2018 and 513,000 gallons last year, and has already tripled that volume through September of this year, according to the most recent data available.