Why is commercial beer getting more expensive?

Yakima 728
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Gavin C said:
Again, more individuls exerting their influence on the market by factoring in cost and freely choosing to buy other products.

If the beers at that price are not selling it does not make sense to any retailer to have them sitting on the shelf and they may decide to lower the price.

If, on the other hand the beers are selling fast, it would make sense to me to put the price up or leave it unchanged.

I fear it's really not more complicated than that.

I feel the beer market in the states is great. The choices are unparalleled, the market is huge and as a result the prices are IMO extremely competitive. If something is too pricey for me, I too will play my role in dictating market pressure and look for something closer to my price point.
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This...100%

They are a business (distributors and retail stores) and if people buy it, why should they lower it? Most breweries these days are moving the price point by shifting the packaging:

6-packs become 4-packs: Same price or maybe a dollar cheaper
22 oz bomber becomes 16.9 oz bottles (this is one you need to watch for, hard to catch)
And now smaller cans/bottles like 11 oz, etc.
 
I saw a few places asking 17.99 for a Sam Adams 12. No thanks. I'm sure it will be on sale for 11.99 in a few weeks when none of them sell for that amount.
 
This is one of the main reasons that I brew. $10 for 2 cases of Centennial Blonde? Yes please.
 
I would say our prices have increased as well. For a while, I was buying racks of PBR at $5.99 and it was for that reason alone. Now I buy, what I previously assumed was garbage, our local BMC (Genesee Light) at $4.99 because the PBR went up to nearly $8. This is just an example. I don't care about these two beers at all, I just get them as cheap side beer.

What does get me, is what has already been mentioned. Bomber prices are ignorantly high. I'd love to try some of these special, seasonal beers that our breweries offer but around $8-$10 a bottle? I would just be splitting the bottle with friends to give them the opportunity to enjoy something new anyway. So. No thanks.

The biggest one for me, are the hyped companies that we have. Ballast Point for example. We've had their stuff here for a long while and it was always pricey. Now their beer is $14 a six pack. Laughable. You're not that good, sorry.
 
TheCADJockey said:
The biggest one for me, are the hyped companies that we have. Ballast Point for example. We've had their stuff here for a long while and it was always pricey. Now their beer is $14 a six pack. Laughable. You're not that good, sorry.
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I've never tried a Ballast Point beer, and it's not for lack of availability here. I'd rather drink Coors Light than pay that much for a sixer.
 
Ballast Point and Rogue are some of the worst offenders I've seen of ridiculous 6-pack pricing. BP I might buy once in a while if I'm craving a Grapefruit Sculpin. $16 for Rogue? Lawl.

As for bombers, I think I'd be better off brewing a batch of RIS and lighting a $20 on fire.
 
hunter_la5 said:
I've never tried a Ballast Point beer, and it's not for lack of availability here. I'd rather drink Coors Light than pay that much for a sixer.
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The only Ballast I've had was the grapefruit sculpin and it was due completely to the hype I see here. I'll never buy their stuff again, at that price at least. It could and most likely is just me, but grapefruit sculpin tasted straight up like Ocean Spray Grapefruit juice. The disappointment was overwhelming. I didn't even care to drink the entire six pack; I instead just gave it to my friends. It wasn't that it was bad, it just.. was boring.

drainbamage said:
$16 for Rogue? Lawl.

As for bombers, I think I'd be better off brewing a batch of RIS and lighting a $20 on fire.
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Needed that laugh, thanks.. and I agree.
 
Im going to take a different position: I generally dont mind. Yes, I would always rather pay less, however I am purchasing a premium product, and Im not surprised when it demands a premium price. If bomber is $20 and it has the reviews and clout to back it up, and I want to try it, Im going to buy it. If its good, I might even buy it again!

If I want to "drink something" I will drink water. If I want to drink to get intoxicated, I will do shots. I drink beer because I enjoy it, and Im going to drink whatever damn beer Im going to enjoy the most, at whatever the price it costs!
 
Bought a 4 pack of Tank 7 for $10 other day and it was well worth it. I never bought the bomber of Tank 7 because of the alcohol content. I think Boulevard prices their beer well. As for Sculpin, it seems they set it on the shelf at $14 and people said oooo expensive must mean good. Now it's $15 .
 
All 12-packs are up about a buck and my local brewery, 3F, is up a $1 a sixer at their location and in stores.

I don't begrudge it. If I want "cheap", tasty beer I just need to stop wasting time on other things and get my pipeline full again.
 
Craft beer is much more expensive to make because they use more ingredients and they don’t buy them by the trainload. There are other economies of scale.

I can buy a lot of 8+% beers for $11.99. The ingredients are at least twice as much as Bud. No adjuncts, way more hops. Is Bud $6/six pack? It is not. The truth is, BMC has been charging premium prices for thin boring lagers for years. Craft beer is a bargain.

I think in general their strategy has shifted from marketing share to increased margin, as people become more used to the product.
 
Don't forget the pending merger of the two brewing giants. The significant reduction in competition will lead to increased prices to the consumer.

In addition, the craft movement and the sudden increase in the number of commercial breweries is leading to greater demand for the raw ingredients which will also increase the cost of limited supplies of those ingredients.
 
bucfan1234 said:
Don't forget the pending merger of the two brewing giants. The significant reduction in competition will lead to increased prices to the consumer.

In addition, the craft movement and the sudden increase in the number of commercial breweries is leading to greater demand for the raw ingredients which will also increase the cost of limited supplies of those ingredients.
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The increase in price of current quantity of grains could lead to new suppliers driving the price back down.
 
That 31% retailer margin doesn't surprise me at all. Check prices in your local mom & pop, then see what it is in one of the warehouse places like Total Wine. I can usually save a couple bucks on a sixer at Total. The margins for spirits can be even worse. I picked up a 1.75L of Maker's Mark at Total Wine for not much more than what the little places get for a 750ml.

If it's a quick trip for a 6 or 12-pack, I'll go to the neighborhood place. But if I'm stocking up, I'll go to the big box liquor store.
 
Gavin C said:
Probably a case of fundamental economics at work.



Supply -v-demand



  • Demand is increasing to outstrip growth in supply.


  • Inflationary pressures.


  • Rising costs of brewing that get passed down the chain to the consumer.



Those 3 possibilities leap to mind.



A healthy free market is self correcting so I wouldn't be concerned.
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Silly Gavin...assuming our market is healthy. My addiction to brewing is ANYTHING but healthy...in more ways than one!!! LOL
 
Phunhog said:
What we need is craft beer that is along the lines of a "Two Buck Chuck" wine. Not fantastic but very drinkable and the price can't be beat!!:D
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Newcastle? Not micro but fits that mould. Greenflash seems to be aiming for this spot too.
 
Calichusetts said:
The price of beer is mainly on the distributor/retail end. They set the price and make up about 60% of the cost. Breweries have very little say in the cost other than a suggested price point.



Prices are going up because people are still buying them. I call it the "Apple" effect. How can Apple charge $2,200 for a laptop when there are great ones out there for $700? Because people buy it.



I have two Craft Beer Cellar stores on my commute home from work. One near the city and one in my hometown. SAME beer, 25 miles apart is sometimes $5 more a 6-pack. I literally don't buy beer from the one in my town unless I have to. I've seen price swing of up to $10 on a bomber from store to store.



This has nothing to do with the brewery.
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Breweries cannot dictate retail prices but there is WAY more they can do than what you imply. I'm a pricing manager for a huge wine company, so I'm very familiar with three tier pricing strategy.

Wholesalers and retailers generally work on known margins (negotiated and in some cases State mandated like OH) and freight and tax rates are known (freight is negotiated and tax is dictated by the State).

If you want a bomber to hit the shelf at 4.99 and you know the tax and freight agreement with the distributor you can price accordingly:

4.99x.7 (retail assumed at 30%) = retail purchase price ($3.493). $3.493x.75 (distributor at 25%) = distributor landed cost ($2.619). If tax and freight total to 00.38 then $2.619-.38=manufacturer FOB = 2.24.

There you go. If retail is at 30%, three tier is at 25% and freight and tax make 38 cents then you need to sell it at 2.24 to hit a $4.99 retail shelf price.

What's weird is how it changes as FOB goes up.

Say they raise the FOB by .50 cents...doesn't seem like much but the resulting shelf price with all else held equal is 5.95. If they raised it a whole dollar up to 3.24 FOB then the shelf price goes up to 6.89 each!!!!

Much more to pricing than simply letting the chips fall where they may.
 
Forget expensive six packs my liquor store now has row after row of $10 12 ounce bottles. Paradox made in Denver here aged in oak barrel it's definitely worth the $11 a bomber in my opinion
 
iijakii said:
It's the bomber prices that get me. There's some decent $4 and $5 bombers, but the majority are $7-10 for any standard beer, then $15 for big imperial stuff. It's insane.
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Yep. This has always bothered me as well. The prices really are insane, and to boot, I'd rather have two 12 ounce bottles than a bomber anyhow. My glasses are 12 ounces, so the only thing that buying a bomber accomplishes over two 12 ouncers is that the second half gets flat while I drink the first half.

Needless to say, I rarely buy bombers.
 
Most of the grocery stores near me let you grab singles for $2. It's funny doing it for a $7 bomber and getting it for $4 instead. That said, most beers I want to try are bomber-only unfortunately.
 
IMO, the best stores let you buy 6-packs or singles of that beer, often for the correct fraction or slightly more ($6.00 six pack or $1.25 single is often the equivalent.) If that is not offered in your neck of the woods, then that is a great business opportunity right there.
 
I noticed an increase in prices for sure. I used to brew about 95% of all the beer i consumed. Now, i've gotten bad and its probably close to 50/50... buying beer is much more expensive than just brewing but I'll go back to making my own once celebration ale goes away :)
I can't do the expensive bombers anymore. I could brew a half batch for almost the same price as 1 or 2 bottles of commercial stuff. I allow myself 1 750 ml a year to put in my cellar but that's it!
 
Yeah. I've seen a lot of 6 packs at $10 now. All the more reason to brew your own and justify spending all that money at the brew store to the wife.
 
$10 for a six-pack? ****, here we get happy shouts buzzing around Facebook when they get below $30 for a six-pack worth of good stuff. Best deal I EVER find is four tall boys of the more expensive mass market stuff (Pilsner Urquell, Japanese light lager, sometimes Bass or Boddingtons etc. etc.) for about $9 and that's so incredibly cheap that the local breweries that screaming and trying to goad the government into legal action against such unfairly low prices.
 
Bosh said:
$10 for a six-pack? ****, here we get happy shouts buzzing around Facebook when they get below $30 for a six-pack worth of good stuff. Best deal I EVER find is four tall boys of the more expensive mass market stuff (Pilsner Urquell, Japanese light lager, sometimes Bass or Boddingtons etc. etc.) for about $9 and that's so incredibly cheap that the local breweries that screaming and trying to goad the government into legal action against such unfairly low prices.
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Last year all the craft beer in Milwaukee seemed to be 7.99/6pk. I would never pay 30. You can make 2 cases of the same beer for 30 at home.
 
When I heard how much BCBS is going to be this year, I decided I would sleep in this Black Friday. Can I afford a couple of bottles? Sure, I suppose. I just don't want to encourage that nonsense. Maybe I would buy a couple of bottles if it was easier to get. But there's no way I'm standing on line in the dark at that price.

I paid $36. for a 4 pack of Higher Math, but all I had to do was drop it into my cart. (And @ 17% it's really two servings per 12 oz bottle) But, I wouldn't have gotten up at 4 am at that price.
 
I stopped buying commercial beer 4 years ago when the price went above $6/6 pack for an average craft brew and started making my own.

I speak with my wallet and my wallet agrees most of these beers aren't worth $1 each, let alone now closer to $1.50 each.
 
I don't know about BMC prices, but craft beers are using way way more raw j gradients than ever before. Even a basic session IPA can have insane amounts of whirlpool hops to add aroma/flavor without bitterness. This drives up the cost to make that beer exponentially.

Imperial beers cost more because their grain bill and typically hop bill in the case of dipas and similar are way higher.

Same with all the habanero and fruit infused flavored beers, it's more than just hops barley and malt.

As consumers demand more flavor and more variety I think that is driving raw costs and experimental costs to satisfy that demand.
 
mtausch11 said:
Last year all the craft beer in Milwaukee seemed to be 7.99/6pk. I would never pay 30. You can make 2 cases of the same beer for 30 at home.
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Exactly. Hence homebrewing, a lot easier to justify it when you're saving that much money.

Of course the ingredients cost more too, for some reason malt is pretty reasonably-priced (about $2/pound for base malt if I buy it in a two kilo bag, more for specialty malt) but yeast and hops are pretty damn expensive. But if you get bulk hops from the states and harvest/stick to dry yeast it isn't that much more expensive, especially for a place where even the local piss beer is taxed heavily enough to be as expensive as a lot of craft beer back home (about $1.73 for a half liter can of weak-ass lager, a bit cheaper for the pitcher bottle or a six-pack, but then it's almost never sold in six packs).
 
I buy commercial and brew my own. For my light beer I drink I get Genesee Light for $3.99 a 6 pack of 16 oz cans. I can get commercial/local 6 packs for $7-12 which I don't mind. I occasionally splurge on a few bombers. I don't mind spending the money.
 
Ingredient cost in your typical bottle of beer is a small component of the overall cost. Reasonable size brewers only pay about 50 cents per lb for grain (your LHBS isn't paying much more) and a few bucks a pound for hops. Buying volume on contract makes all the difference here. Even for an Imperial Something this is only slightly more expensive than your average beer in terms of raw ingredient cost.
 
rawlus said:
I don't know about BMC prices, but craft beers are using way way more raw j gradients than ever before. Even a basic session IPA can have insane amounts of whirlpool hops to add aroma/flavor without bitterness. This drives up the cost to make that beer exponentially.

Imperial beers cost more because their grain bill and typically hop bill in the case of dipas and similar are way higher.

Same with all the habanero and fruit infused flavored beers, it's more than just hops barley and malt.

As consumers demand more flavor and more variety I think that is driving raw costs and experimental costs to satisfy that demand.
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I reached past a Sculpin to get a cheaper Enjoy By today but what do I know.
 
Craft beer here is running $8.50 - $10.50 a 6 pack .
Too much although i will buy some if the pipeline runs dry, the $8-9 dollar stuff.
Need to keep the pipeline flowing better .
 

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