One of the Reasons I Brew

Brewers,

Saw this article and thought you would be interested.

http://www.dailyfinance.com/2011/05...orces-behind-a-sudsy-economic-i/?ncid=webmail

NRS

Nice read. Only problem is that all of those cost-increases are also affecting us homebrewers. I cant afford a 22 cent beer when I was making them for 20 cents last year!

That dude's missing some critical points...the same greed that might keep prices up is the same greed that gets the next guy to drop his prices against his competitors so as to lure customers his way. More than that, hops and barley are agricultural crops, producers have to contract with farmers and when things get tight those futures contracts get more expensive so years after a shortage such as the hop shortage producers still feel the pinch...just ask ol' Vinnie at RR about his hop contracts. Finally, is that the value of the dollar has gone down significantly while pay has not increased to fill the difference, meaning we are paying more for stuff relative to our income. Unless the dollar increases in value (not going to happen any time soon) prices are going to stay high.

For me the real kicker to brewing more was my wonderful states solution to the increasing budget gap, taxes on sin beverages (among other things)...paying 8 bucks for a 6 pack is a killer.

I always thought that the bottle, label, cap and advertising cost more than the ingredients in a BMC brew.

Bensiff said:

That dude's missing some critical points...the same greed that might keep prices up is the same greed that gets the next guy to drop his prices against his competitors so as to lure customers his way.

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^^^ Exactly this. So long as there are multiple stores there will be a move back to pre-shortage prices since there's always a retailer willing to price drop. Then the others have to be competitive and usually match, or come close to, the prices.


Rev.

Rev2010 said:

^^^ Exactly this. So long as there are multiple stores there will be a move back to pre-shortage prices since there's always a retailer willing to price drop. Then the others have to be competitive and usually match, or come close to, the prices.


Rev.

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Except when 98% of the market is controlled by 2 or 3 companies! DOWN WITH BMC!

Bensiff said:

For me the real kicker to brewing more was my wonderful states solution to the increasing budget gap, taxes on sin beverages (among other things)...paying 8 bucks for a 6 pack is a killer.

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8 bucks...I'd love to pay just 8 for a 6 pack of craft beer.

kpr121 said:

Except when 98% of the market is controlled by 2 or 3 companies! DOWN WITH BMC!

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True, though I was looking at it more along our homebrewing scale - meaning supplies since they mention hop shortages and such. But even gasoline goes up and down. It doesn't just go up then stay there. Though I do wholeheartedly agree that in a good amount of situations some of these bastard companies just keep things stuck at the "supposedly temporary" price point. And of course why wouldn't they. So long as the amount of purchasing hasn't plummeted they figure, "Hell... we're making even more money than before so let's keep these prices".

But, being there's the beauty of "the law of averages" eventually a Walmart in their field comes along and offers good products/services for rock bottom prices. Being that so many other facets of our consumer purchases have gone dramatically down in price I don't see such a huge issue here.

When I was a kid TV's, Microwaves, and VCR's costs a TON of money! Today we can buy computers, cell phones, HDTV's, microwaves, even cars on the dirt cheap. So if some items go up a little in price maybe it isn't all that huge a deal.


Rev.

Beer prices.

I remember when beer got to be a novelty. Before that I could go down to the beer warehouse and get a case of 24-something oz bottles of Coopers Stout, bottle conditioned for like 12 bucks. Stegmeyer licorice stout - 10 bucks. Bunch of other odd beers that were decent, all fairly inexpensive.

Then yuppies turned the market to trendy and all that vanished. Now you need a mortgage for a case of something solid.

Sweetchuck said:

Then yuppies turned the market to trendy and all that vanished. Now you need a mortgage for a case of something solid.

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Come on, it ain't that bad. I hate the trendy yupsters as much as the next guy but you gotta realize if it weren't for beer becoming trendy and more widely accepted we wouldn't have anywhere near the variety we have today. 20 years ago for example you couldn't even find a hefeweizen in your local stores. At least not in Brooklyn.

Rev.

Cpt_Kirks said:

I always thought that the bottle, label, cap and advertising cost more than the ingredients in a BMC brew.

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the advertising alone is prolly more than the ingredients for the whole batch. BMC spends more on advertising than any other entire industry combined. How the hell else would they be able to sell a drop?

Malintent said:

the advertising alone is prolly more than the ingredients for the whole batch. BMC spends more on advertising than any other entire industry combined. How the hell else would they be able to sell a drop?

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Any other industry combined what? What is combined? Or did you mean bmc combined?

More than the telecoms? I'm surprised, you have a link?

doctorRobert said:

Any other industry combined what? What is combined? Or did you mean bmc combined?

More than the telecoms? I'm surprised, you have a link?

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I wouldn't be surprised if he's mostly right. Think about all the sports advertising and all the sports events BMC sponsors. They go insane with sticking their logos anywhere and everywhere. Hell, even my local liquor stores are draped in their logos. The closest place to me recently had their counter plastered with Budlight advertising.


Rev.

Rev2010 said:

^^^ Exactly this. So long as there are multiple stores there will be a move back to pre-shortage prices since there's always a retailer willing to price drop. Then the others have to be competitive and usually match, or come close to, the prices.

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To an extent, but this would also assume that prices remain stable which they cannot do when there is built in inflation in our monetary system, if you look at price stability before we began removing the dollar from gold backing in the 1930's a loaf of bread pretty much remained constant. However, its a good point about multiple stores, we seem to be killing competitive markets in this country by allowing businesses to consume their sectors into monopolistic beasts. I'm pretty sure lobbyists should be outlawed...think of all the protective beverage laws created to protect BMC (granted BMC does do some pretty good stuff with their money, I'll give them that, but I don't like when folks throw their weight around to keep quality competition down).

sjjn said:

8 bucks...I'd love to pay just 8 for a 6 pack of craft beer.

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I would say get out of that overtaxed hell hole, but Washington is headed in the same direction so the taxes are only going to keep going up here. You should see the prices on hard-a, far worse than beer/wine...I know a good number of people who load up out of state whenever they take a road trip.

Malintent said:

the advertising alone is prolly more than the ingredients for the whole batch. BMC spends more on advertising than any other entire industry combined. How the hell else would they be able to sell a drop?

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Don't be silly. Advertising does not really cost anything to the company or they wouldn't do it. The intent of advertising is to sell more product.

I'm going to simplify a bit here:

In commodity based markets like beer, selling more product drives the unit cost to produce down due to economies of scale. The volume of cash flow is incresed due to supply/demand curves, resulting in increased total profit for the company. Additionally, unit price to consumers dosen't always go down quite as much as production cost, so %profit per unit of investment can also go up. Thus, increased profits for the company. They wouldn't spend any money on advertising if this weren't the case. It wouldn't make sense to do so otherwise.

As a bonus, you get cheaper beer (if you can drink it) because BMC spent money on advertising.

I'm sorry if I'm laying it on a bit thick here but complaints "advertising costs" being a burden on us "little people" is one of my pet-peeves.

Americans need to stop crying about their beer/alcohol prices. Think $20 for a case is some huge number? I have 6-packs in my fridge that cost about that much (couple dollars less but still). I've personally long since accepted that with $20 I'll be lucky to buy a 6 pack and a bomber of craftbrewed beer. No sympathy from this side of the border.

Crustovsky said:

Americans need to stop crying about their beer/alcohol prices. Think $20 for a case is some huge number? I have 6-packs in my fridge that cost about that much (couple dollars less but still). I've personally long since accepted that with $20 I'll be lucky to buy a 6 pack and a bomber of craftbrewed beer. No sympathy from this side of the border.

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Chains are a funny thing...if you wear them long enough you get used to them and accept the burden.

I walk by a lot of craft beers I like in the grocery store....and I just keep walking. Seven bucks a six is pretty much my cutoff, and more and more beers can't meet that. Some dip down there on the occasional sale, and then I'll grab some. But in general, it's a great time to be a homebrewer.

rico567 said:

I walk by a lot of craft beers I like in the grocery store....and I just keep walking. Seven bucks a six is pretty much my cutoff, and more and more beers can't meet that. Some dip down there on the occasional sale, and then I'll grab some. But in general, it's a great time to be a homebrewer.

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I'll be lucky if I can find 7 a 6 after taxes, hell even 10 a six. I find some 4 packs at 10.

unionrdr said:

Fer real,man. A 6'r of dead guy is $10.99 here.

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About the same here...and I'm close to the source.

unionrdr said:

Fer real,man. A 6'r of dead guy is $10.99 here.

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Try Yooper's Undead Guy clone in the recipes section. I was very, very pleasantly surprised, and it's one of my next batches up for a repeat.

Cpt_Kirks said:

I always thought that the bottle, label, cap and advertising cost more than the ingredients in a BMC brew.

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I've often thought the same.

Sweetchuck said:

Beer prices.

I remember when beer got to be a novelty. Before that I could go down to the beer warehouse and get a case of 24-something oz bottles of Coopers Stout, bottle conditioned for like 12 bucks. Stegmeyer licorice stout - 10 bucks. Bunch of other odd beers that were decent, all fairly inexpensive.

Then yuppies turned the market to trendy and all that vanished. Now you need a mortgage for a case of something solid.

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Whats up guy? I don't remember those days. What I do remember is nothing but BMC being available. Now I can get craft beer everywhere. Even the lowley dive bar has to keep at least one craft tap if they want to have customers. So thank you yupsters. I am a cheap broke bastard but good beer is one thing I don't mind paying for. Even 10 bucks a six, thats still less than 2 bucks a beer. 6/7 dollars a draft at the bar is a bit crazy but I am not complaining. And here we are on a brewing site so we are cutting our alc bill somewhat.

Hey Beez - just noticed your reply.

Yeah, good stuff was available back then, you just had to know where to get it. Large breweries like Lion were brewing some pretty good stuff. If you've never had a Stegy licorice, you're missing out. I don't think they make it anymore though I'm not sure.

Chiodos in Homestead always had a respectable selection of anything you could ever dream of back then also, but sadly - just like the changing times, Chiodos is now a parking lot for a Walgreen.

Yeah but in those days I didn't live in the city. Honestly though I am not even sure you can get good stuff in the sticks still tbh. I have never been to chiados. I remember it being there that is about it. I was reading where the first Pittsburgh homebrew club started out of that joint. Which is still around today and I need to join!

It was a great place. My heart was broken when they closed, I was practically a regular there.

They had all this junk hanging from the ceiling rafters. Snakes in bottles, guns, manikins. My wife had one of her bras hanging from those rafters, she still doesn't realize that to this day.

Had everything, all the Sam Smiths, Old Nick, Coopers, Chimays. I'll never forget their 'mystery sandwich', a burger with hot peppers, kraut, spaghetti sauce and a couple other things.

Had my first served beer there when I was 16,

doctorRobert said:

Any other industry combined what? What is combined? Or did you mean bmc combined?

More than the telecoms? I'm surprised, you have a link?

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I meant that the amount of money that BMC (99.9% of all commercial breweries in the US) spends on advertising is more than the money spent by every other industry in advertising, combined.

Ever watch the super bowl?

Last article I read was about how AB cut 1.5 billion dollars out of their advertising budget last year... notice a change? me either.

Malintent said:

I meant that the amount of money that BMC (99.9% of all commercial breweries in the US) spends on advertising is more than the money spent by every other industry in advertising, combined.

Ever watch the super bowl?

Last article I read was about how AB cut 1.5 billion dollars out of their advertising budget last year... notice a change? me either.

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I did watch the superbowl, and noticed a lot of other advertisements.

And I think your number is BS. 51/100 commercials is not beer related, which it would have to be to support your hypothesis. Please provide where you got that number from, or if you just guesstimated.


According to in-bev annual report, inbev spent 4.7 billion on advertising.
http://www.ab-inbev.com/go/investors/reports_and_publications/annual_and_hy_reports.cfm

According to my research, the amount spent globally on advertising is 474 billion.

So you have what? 1%? That make all the other industries combined 99% (less miller coors') Unless you think miller and coors spend 50 times more than inbev, your numbers dont work. And even assume inbev only advertises in the US, the US spends $173b on advertising. You still don't get to your numbers.
http://www.plunkettresearch.com/advertising branding market research/industry statistics


But its the internet, so make up whatever statistics you wish.

you are aware, of course, that 84.6% of all statistics are completely made up, don't you?

You are closer to correct than I.. I must have misunderstood. Have you found a source that breaks down those stats by industry? I couldn't find one.