McMenamins Pubs and Breweries

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McMenamins Pubs and Breweries

1624 NW Glisan Street
Portland, Oregon 97209
U.S.A.
Telephone: (503) 223-0109
Fax: (503) 294-0837
Web site: http://www.mcmenamins.com

Private Company
Incorporated: 1983
Employees: 1,500
Sales: $60 million (2003 est.)
NAIC: 722110 Full-Service Restaurants; 312120 Breweries; 721110 Hotels (Except Casino Hotels)

McMenamins Pubs and Breweries owns and operates more than 50 establishments in Oregon and the state of Washington and is the sixth largest producer of microbrewed beer in the Pacific Northwest. Unlike other breweries, McMenamins sells its ales only in its own pubs, restaurants, hotels, and movie theaters. A conscious anti-branding ideology permeates McMenamins: each business bears its own name and distinctive decorations, often reminiscent of the history of the building in which it is located. Several of the McMenamins businesses are in renovated buildings included in the National Historic Register of Places.

1974 to Mid-1980s: Evolving a New Kind of Pub

In 1974, after graduation from Oregon State University with a degree in political science, Mike McMenamin thought it would be fun to run a business. His past experience as a sandwich maker turned his thoughts to the food industry; so, along with two college friends-turned-business-partners, he bought the Produce Row Café, a pub famous for its all-night, high-stakes poker games, in Portland, Oregon's warehouse and wholesale district. The following year, Mike and brother Brian, an Oregon State graduate with a degree in business, bought Bogart's Joint, another Portland-area pub with backing from their father.

By 1980, the McMenamins had bought and sold a total of seven pubs. Looking back on these early ventures from the perspective of a 2004 Chicago Tribune article, Brian McMenamin would say, "Our kind of thing is learn by doing, and there's a lot of expense in that." Along the way, the brothers developed a prototype for a new kind of pub—one that departed from the dark, smoky, male-dominated, local tavern—and drew inspiration from the all-ages community hubs that characterized the urban and rural landscapes of England, France, and Italy.

"Our initial idea was to make our pubs into community centers, places for people in the neighborhood to gather and have a good time," said company President Mike McMenamin in a 2002 Nation's Restaurant News article. In 1983, the McMenamins decided to try out their prototype at The Barley Mill Pub, a pub famous in Portland for its annual Grateful Dead anniversary party. At The Barley Mill, music became an essential ingredient in the McMenamin mix. "It's kind of like we are recreating the wheel all the time," according to Mike McMenamin. "Part of the fun here is that things are always changing, and we do lots of experimentation. Energy is a large part of this company, energy combined with imagination."

1984 to Late 1990s: Ongoing Experimentation on a Theme

In 1984, Oregon passed a law that allowed small breweries to sell their product onsite and at a second location. The law also permitted minors in pubs during the hours when food was served. The McMenamins, taking advantage of the law, for which they had lobbied, opened the first brewpub in Oregon since Prohibition, the Hillsdale Brewery and Public House. "[H]aving beer on tap inspired us to make our own. We'd been offering a lot of imported and specialty beers, which sometimes seemed to have lost flavor because they'd been sitting on a boat too long. Making our own beers seemed like a natural move since we had some home brewers already working in the company," explained Mike McMenamin in a 2002 Nation's Restaurant News article. McMenamins establishments began offering their own Terminator Stout, a dark, heavy, English-style brew, and Ruby Tuesday, a light, raspberry-flavored beer. They later added their own Hammerhead Ale.

The brothers also began to allow their love of historic structures to direct their business growth. In 1986, they purchased a 125-year-old farmhouse in Hillsboro, Oregon, and turned it into the Cornelius Pass Roadhouse. Then in 1987, they converted the 1890s-vintage Swedish Tabernacle, a church-turned-union hall in northwestern Portland, into the state's first theater pub, which they called the Mission Theater and Pub. The Mission began showing classic movies and selling beer and snacks, but to limited success; so, in search of greater profits, the newest McMenamins venture began to serve burgers and pizza along with beer and to charge $1 admission to second-run movies. The new formula worked, and shortly thereafter, the McMenamins turned an old art deco theater slated for the wrecking ball into a second pub and movie house. The newly remodeled Baghdad Theatre had alternating rows of seats and long tables facing the movie screen.

By 1990, McMenamins had sales of about $10 million. In 1991, at a time when there were only 130 brewpubs nationwide, McMenamins, with ten, had twice as many brewpubs as any other company. The company owned a total of 24 taverns throughout the state of Oregon and sold close to 600,000 gallons of its own brew annually in addition to beer from other Oregon microbreweries, domestic beers such as Henry Weinhard, Budweiser, and Miller, and a sprinkling of foreign brews. By 1995, there were 30 McMenamins pubs throughout Oregon and Washington, the two leading states in terms of draft beer consumption. Twenty-seven percent of beer sold in these two states was on tap as compared with only 3 percent in nearby California.

Despite this growth, the company still relied solely on its existing network of pubs and theaters to cross-promote its properties. There were advertisements on everything from beer mats to movie screens. "[McMenamins exists] in the crease between neighborhood business and more formal businesses," according to Brian McMenamin in a 1995 American Demographics article. "Almost all of our advertising is word of mouth." The McMenamins prided themselves on their laid-back air and the company's open atmosphere where everyone did a little of everything. "We look for people as much as we do for properties," Mike McMenamin observed in a 2002 Nation's Restaurant News article. The company limited itself to promoting employees from within rather than recruiting from without to fill management positions.

In the late 1980s and early 1990s, the McMenamins put their profits back into the business, according to Brian McMenamin in a 1991 Los Angeles Times article. Much of that money went into the renovation and opening of the 25-acre Edgefield Manor in Troutdale, Oregon. Edgefield had once been the self-sufficient Multnomah County Poor Farm, complete with meat-packing plant, power station, large rooming house, and infirmary. The brothers purchased Edgefield, which was listed on the National Register of Historic Places, in 1987 for $560,000 and invested another $2.5 million over four years to transform the farm's 80-year-old buildings into a multi-utility complex. When the Edgefield Manor opened in 1991, the meatpacking plant had become a brewery; the power station a pub with a movie theater; the infirmary a winery; and the rooming house a 100-room lodge. There was also a meeting space, catering operation, a fine dining restaurant called the Black Rabbit, herb and flower gardens, four small liquor and cigar bars, a distillery, golf course, and an amphitheater.

One of the more outstanding things about Edgefield—and a feature that was to become the McMenamins' signature—was the art by 14 local artists that showed up in surprising places throughout the complex: on ceilings, exposed heating pipes, eaves, and fuse boxes. This art depicted local themes, images of former poorhouse residents, Northwest Indians, 19th-century brewers, and the Columbia River Gorge. A few years later, the company had a stable of 12 freelance artists that it kept employed working on its various new acquisitions. Another outstanding feature of McMenamins was its emphasis on recycling. "There was a lot of impetus within the company to recycle," said Brian McMenamin in a 1993 Oregon Business article. In 1991, the company set up a recycling program headed by a designated employee in each pub.

Throughout the mid-1990s McMenamins continued to evolve, as did the company's clientele. Portland's pubs were attracting fewer hard-core drinkers and more families than they had in the mid-1980s, in part in testimony to McMenamins' success. "There are more families now, and more people coming by to talk. . . ." Patrons were bringing their young children. "A lot of our pubs have toys and things for kids to do," said Brian McMenamin in the May 1995 American Demographics. There was also a growing demand in the pubs for local and regional foods. As a result, as much as 60 percent of the company's revenues began to come from food sales. By 1998, 70 percent of revenues came from food. McMenamins responded by developing menus that were eclectic and diverse enough to reflect the atmosphere of its various establishments with signature dishes at each of the pubs.

Late 1990s to Early 2000s: A Focus on Larger-Scale Operations

The company also began to focus on larger operations. It continued its practice of buying up old abandoned buildings with the 1997 purchase of the Crystal Ballroom in Portland. Built in the 'teens, the building—famous for its swaying dance floor on ball bearings—had stood vacant for 30 years. The newly rehabbed Crystal became a dance hall and concert facility that hosted national music acts and was filled with murals depicting the building's history; it had, of course, a brewpub and bar in its lower level.

Company Perspectives:

McMenamins continues to create imaginative and comfortable gathering spots for friends and family, throwing in unexpected turns of fun whenever possible. From staying overnight in a former Kennedy Elementary School classroom to taking in the majestic 360-degree view from the Hotel Oregon's Rooftop Bar, to dancing on the Crystal's marvelous floating floor, to making new friends through all-inclusive conversations at Edgefield's Little Red Shed—it all happens in a good pub.

Also in the late 1990s, McMenamins partnered with the Portland Development Commission and invested $4.5 million in remodeling the Kennedy Elementary School in Portland. The once boarded-up neighborhood eyesore became a 35-room multi-use hotel with one pub, four bars, a movie theater, a jazz hall, cigar bar and soaking pool, and its own onsite brewery.

By 1998, McMenamins had 40 distinct units, or "destination places," as the company liked to call its establishments, half of which were brewpubs. Its business was increasingly successful at a time when experts were decrying the end of the brewpub craze. McMenamins employed 900 workers, 12 free-lance artists, and brought in $30 million in annual sales, close to double what it had brought in just five years earlier. Although many thought the company should expand geographically, the McMenamin brothers were still interested only in focusing on the Northwest. "We're hands-on folks, and we're committed to the Northwest," they announced in a 1998 Restaurant Business article.

More growth came in 1999 when McMenamins opened the doors of McMenamins Hotel Oregon. The building in downtown McMinnville, Oregon, listed in the National Register of Historic Places, had been in operation as a hotel since its first two stories were erected in 1905. Five years later, two more floors were stacked onto the hotel, which was renamed Hotel Oregon in 1932. The McMenamins renovation included completing the fourth floor, refurbishing guest rooms, and adding two bars—one on the rooftop, the other in the cellar. The company also added an art gallery that blended old photographs and paintings to depict the lore and history of the hotel and McMinnville. The next year, McMenamins took over the Grand Lodge in Forest Grove, Oregon.

Key Dates:

1974:: Mike McMenamin opens his first tavern.
1983:: The McMenamin brothers open their first pub, the Barley Mill Pub.
1985:: The McMenamin brothers open their first micro-brewery at the Hillsdale Brewery and Public House.
1986:: The Cornelius Pass Roadhouse opens in Hillsboro, Oregon.
1987:: The Mission Theater and Pub opens in Portland, Oregon.
1991:: The Baghdad Theatre opens in Portland, Oregon; Edgefield Manor opens in Troutdale, Oregon.
1992:: McMenamins earns the "Recycler of the Year" award from the Association of Oregon Recyclers.
1995:: McMenamins purchases the Rock Creek Tavern in Hillsboro, Oregon.
1997:: McMenamins purchases and rehabs the Crystal Ballroom in Portland, Oregon.
1999:: McMenamins Hotel Oregon in McMinnville, Oregon, opens.
2000:: The Grand Lodge in Forest Grove, Oregon, opens.
2001:: McMenamins opens Centralia's Olympic Club Hotel in Centralia, Oregon.
2003:: McMenamins reopens the Rock Creek Tavern in Hillsboro, Oregon.

Mike McMenamin was still saying, in 2001 in a Portland Journal article, "We never had a plan in our lives. This business is always evolving, and we do what makes sense and what fits us," when the company, with a workforce of 1,500, was ranked 132nd among Oregon's largest private companies. That year, McMenamins opened Centralia's Olympic Club Hotel and Theater, expanding upon its Olympic Club Pub in downtown Centralia, Washington. Overnight stays in the hotel's 27 restored rooms included admission to the movies and breakfast in the first floor café. By 2002, the company had 52 properties and annual sales of about $60 million and was targeting central Oregon for its next area of growth. In 2003, it reopened the Rock Creek Tavern in Hillsboro, Oregon, which it had purchased in 1995, when the old tavern there burned down. McMenamins also began branching out into other products for sale in its taverns, such as stout mustard in the early years of the new century. All signs were that the company would keep on growing.