Coffee shop

Coffee shops throughout Oregon provide customers with their daily coffee, lattes, cappuccinos, and other drinks that help wake them up in the morning and keep them awake throughout the day.

According to the National Coffee Association of the USA (NCA), which has tracked coffee consumption through annual surveys since 1950, 83% of Americans 18 years and older say they drink coffee and 64% drink it daily.

With such a large majority of Americans drinking coffee, it’s no surprise to find several coffee establishments in cities throughout the state, and sometimes multiple shops on the same block.

Coffee shops, however, provide customers with more than a latte or mocha. Coffee shops are places where people typically meet with a business partner or old friend, access public WiFi, listen to an open-mic session, study for an exam, or read a book.

Thus, coffee establishments provide a gathering place and potential economic benefits greater than the price of a vanilla latte.

Growth through 2019, uncertainty ahead

Employment and wage data are classified according to the North American Industry Classification System, or NAICS, and coffee shops and stands are classified in the snack and nonalcoholic beverage bars industry. This industry includes other establishments serving items such as donuts, pretzels, ice cream, and frozen yogurt.

In 2019, there were 1,575 establishments in this category with an annual average employment of 16,131.

About half of these establishments were located in the Portland metro area (i.e., Clackamas, Columbia, Multnomah, Washington, and Yamhill counties). While 2020 annual employment data is not yet available, the number of establishments dropped to an average 1,465 and employment dropped to 12,300 over of the months of April, May, and June 2020 as businesses struggled due to COVID-19 related business restrictions.

Though snack and nonalcoholic beverage bars is a small industry, comprising less than 1% of total statewide employment, it has seen consistent growth from 2010 through 2019. Growth in both the number of establishments and employment in the industry has outpaced the average rate of growth for all industries. From 2001 to 2019, the industry’s employment more than doubled in Oregon, whereas total employment for all industries increased by 22%. Similarly, the number of establishments increased by 118% compared with 56% for all industries. Growth at snack and nonalcoholic beverage bars has also outpaced the larger food services and drinking places industry. However, the COVID-19 pandemic has halted industry growth in this sector, with second quarter 2020 employment levels 24% below levels during the same period in 2019 at 12,300.

Despite social distancing-related limitations on where we can drink coffee, our appetite for the drink has not been curbed by the pandemic. According to the National Coffee Association of the USA, six out of 10 Americans are still drinking coffee daily. Where we are drinking, however, has changed slightly, with 20% fewer Americans drinking coffee away from home.

Oregonians not only love drinking coffee; we love roasting it too. According to the Bureau of Labor Statistics, Oregon has the second highest number of coffee and tea manufacturing establishments in the nation after California and the second highest location quotient for average annual employment in the sector after Hawaii. Though some coffeehouses roast their own beans, there are several coffee roasters throughout the state from Portland down to Ashland, and east in Sisters, Bend, and Pendleton.

The coffee and tea manufacturing industry in the state steadily increased from nine business units employing 440 individuals in 2001 to 82 units employing 1,159 in 2019. During the COVID-19 pandemic, the number of coffee and tea manufacturing establishments dropped slightly to 80 in second quarter 2020. Employment in the sector dropped by 13% compared with second quarter 2019 to 1,002 jobs.

Workers and wages

The average annual wage for employees in the snack and nonalcoholic beverage bars industry in 2019 was $19,463, which was significantly lower than the statewide all-industry average of $55,019. It’s probably no surprise that workers in the industry earn lower wages as the pay scale for many jobs, such as baristas, often begins at minimum wage and many employees work part-time schedules. However, workers in the industry, especially younger workers, can obtain other benefits, specifically work experience. Compared with other industries, coffee shops tend to employ a larger share of younger workers.

Workforce age data for just the snack and nonalcoholic beverage bars industry is not available, but it is for the larger food services and drinking places sub-sector. In 2019, 14 to 24 year olds comprised approximately 30% of the food services and drinking places workforce compared with 11% for the total workforce. These younger workers in the industry can learn skills and gain valuable work experience that will allow them to be successful in other occupations. For instance, they can learn how to work in a fast-paced environment, receive payments, provide customer service, and acquire “soft” skills such as showing up to work on time, working in a team, and communicating with customers.

Working in the manufacturing side of the coffee industry may provide a much higher wage than working at a coffee shop. The average annual pay in the coffee and tea manufacturing industry in 2019 was $45,205, which is more than twice than the average for coffee shops, but lower than the all-industry average of $55,019.

Summary

Coffee shops, as well as coffee roasters, are small but have grown steadily through 2019. Despite COVID-19-related losses in 2020, employment in these sectors is likely to bounce back once social-distancing-related measures are lifted and coffee shops once again offer an atmosphere conducive to meeting with co-workers, business partners, or friends.

Sarah Cunningham is an economist with the Oregon Employment Department. She may be reached at 503-871-0046.

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