The Fate of Hedge House and More

Yesterday's news that Lompoc's Hedge House in Southeast Portland is closing comes on the heels of last week's featured stories regarding the overnight closure of Widmer's Gasthaus and the final day of operation at The Commons. The last day at the Hedge House will be Nov. 28.

The announcement was met with shock. Maybe it shouldn't have been. We've been cruising along in unlimited craft beer growth mode, watching countless places open and assuming there was room for everyone. Market saturation is today's reality. And there is a price.

During last week's media preview of Lompoc's holiday beers, with the Widmer news fresh, I asked owner Jerry Fechter about the challenges presented by growing competition and saturation in the restaurant and pub business.

The reality, he said, is that all the Lompoc pubs have been affected by the seemingly endless number of similar businesses that have opened around the city. There's no longer any limit on how many places can open in a given area. He made no mention of impending closures, but confided that the situation had him frustrated and worried about the future.

As we were reminded in the press release announcing its closure, the Hedge House resided in a quaint and underdeveloped location for many years after it opened in 2003. It wasn't fancy and it was beloved by many precisely because it was a simple place where you could relax with your friends, your family or your dog.

In fact, the Hedge House surely benefited by being in a sort of rundown area where rents were cheap. That was a common theme in Portland craft beer for several decades. Southeast Portland and what is now the Pearl District were once littered with vacant warehouses and busted up storefronts perfect for breweries and related businesses. It's flipped now, of course.

As the area around the Hedge House was flooded by a virtual tsunami of trendy bars, restaurants and related establishments, sales slowed and its prospects dimmed. Even if it had been idyllic in terms of service, food and beer, the Hedge House was an old school place ill-prepared to compete with the barrage of fresh new choices.

The situation we face is odd. After several years of double-digit growth, craft beer will likely see low single digit growth for 2017. Yet new breweries, pubs and taprooms continue to open. There isn't room for everyone. Established places like the Hedge House appear to be at greater risk than shiny new joints that are more marketable to the young crowd that spins craft beer's disco ball.

There's no way to change course. The market will sort out which places will survive and which ones won't. I think older, established spots are most vulnerable, though poorly run newbies aren't immune to market forces by any means.