All Group Buy Participants - NCM Price Change

[Jayhem]

LHBS's aside what about craft BREWERIES? I think they have influenced wholesalers to stop selling to end users as much or more-so than LHBS's have. Craft breweries undoubtedly account for the majority of malt sold. A small local micro-brew near me brews over 100,000 gallons a year and only sells locally.

When end users realize how cheaply they can brew for they are less likely to spend $20 on a 12-pack of local craft brew or have their growlers filled at the brewery!

For me if I had to pay $50 for ingredients to brew 5 gallons of my IPA I would probably brew less and visit my micro-brewery more.

 

[crazyirishman34]

I don't think that is an issue.

 

[Varmintman]

I'm a homebrewer, club member (club officer in fact), and homebrewing related retailer so I see all sides of the argument. If you're just the end consumer in this deal, I can see why you're upset. Base grain represents the highest percentage of batch cost which you previously had an amazing discount on. You had NOT had direct access to hop union or bulk sale from Wyeast or Whitelabs and you couldn't buy direct from the factory in China where Boilermakers are built. Let's be clear, NCM was helping the end user game a system that you already recognize as standard procedure everywhere else.

I'm not in the grain business, but I'll show you how direct manufacturer retail can hurt the industry. The makers of Concord pots approached me about retailing their kettles through BrewHardware and since I was toying with the idea of bringing in stock to have pre-modified with my typical accessories, we started talking about multiple pallet pricing. I was just about to pull the trigger on 4 pallets when I realized they were selling direct on Ebay for about 5% over my cost after freight. No business should be stupid enough to run a 5% margin on anything, nevermind something of that bulk. I know, big deal, one example doesn't matter but if everyone has access to the manufacturers at near wholesale pricing, you lose any value add that a retailer brings to the table.

Now that NCM's rock bottom pricing is inaccessible, clubs and motivated individuals should be able to work out deals with LHBS for much better than retail by-the-pound pricing. Free market says that the shops that discount sacks aggressively will reap the benefits of volume sales. This isn't rocket science, it's just business.

This right here will help. And if a LHBS will not help the end user then another LHBS will pop up and take up the slack.

Elsewhere in the thread I have read about folks going full on buying on the internet. I suspect I am in the minority here but I enjoy going to a business and knowing the people I work with. I believe that there will be a business model for those of us who do not shop online for a very long time to come.

 

[Jayhem]

I don't think that is an issue.

I was wondering about it and looking for feedback. I personally drink almost no store bought beer since I've started homebrewing but I know that the demand for Micro-brew has gone up almost exponentially in recent years. Heck my small town is even hosting its first annual "beer fest" on main street this year welcoming local craft breweries and homebrewers alike.

 

[HBCBrewmaster]

you sir are a gentleman and a scholar

Allow me to repeat myself...LORDURA FOR PRESIDENT!!!

 

[xjncoguyx]

so are hops next?

are the LHBS going to complain to the hop growers that selling by the pound deprives them of by-the-ounce walk-in customers, and therefore HopsDirect and the like should stop selling to us?

It's funny you say this, i have been meaning to pick up a few more pounds of hops and just haven't gotten around to it yet. Ran out of columbus and needed 4 ounces yesterday. So i mosey on over to the homebrew store and buy 4 ounces. Cost me 10$, i died a little inside. :cross:

10.99$ for a pound on farmhouse and 11.xx on hopsdirect

ahh well. convenience charge.

 

[xjncoguyx]

allow me to repeat myself...lordura for president!!!

of earth

 

[HBCBrewmaster]

Varmintman, I would respectfully disagree on this point. When you sell a pot to an end user that is not a repeatable sale. I think you were smart to decline the business in this case. But a smart HBS should recognize that allgrainers need to resupply often on base grains. A smart HBS should compete with the group buyers on grain pricing to keep traffic high in the store. Then while they have you in there they should take the opportunity to learn about their customers needs and sell them other stuff at higher margin. Its called a loss leader in retail. And it really only works if you have welltrained sales people who care. JUST like the guys and gals at MY HBS. They are awesome. They are friendly. They are helpful. But, unfortunately, they have not had cause to see me much lately because their grain prices are just way too high.

 

[Varmintman]

Varmintman, I would respectfully disagree on this point. When you sell a pot to an end user that is not a repeatable sale. I think you were smart to decline the business in this case. But a smart HBS should recognize that allgrainers need to resupply often on base grains. A smart HBS should compete with the group buyers on grain pricing to keep traffic high in the store. Then while they have you in there they should take the opportunity to learn about their customers needs and sell them other stuff at higher margin. Its called a loss leader in retail. And it really only works if you have welltrained sales people who care. JUST like the guys and gals at MY HBS. They are awesome. They are friendly. They are helpful. But, unfortunately, they have not had cause to see me much lately because their grain prices are just way too high.

Yup I guess I phrased it wrong because we do agree. I think the shops that do not price compete are going to lose enough business that another shop can come in and get all of their business.

My big worry is that a store like costco or something will come in and undercut the LHBS. I worry about that because I am opening a LHBS and I know I cannot compete with something like that.

 

[crazyirishman34]

I brew a ton of beer threw out the year. I pretty much bump up against my allowed limit every year. But I still buy beer it is good to taste new beers to expand your palate. Also I like the social aspect of going out.

 

[HBCBrewmaster]

I think you are slightly off there too. If your prices are competitive and you genuinly take care of your customers, your customers will love you and will go out of their way to shop your store. Costco will never be a home brew shop. Even if they did sell brewing malt. I hope to visit your shop some day.

 

[xjncoguyx]

Yup I guess I phrased it wrong because we do agree. I think the shops that do not price compete are going to lose enough business that another shop can come in and get all of their business.

My big worry is that a store like costco or something will come in and undercut the LHBS. I worry about that because I am opening a LHBS and I know I cannot compete with something like that.

I still don't understand how all homebrew stores aren't selling things online. It seems crazy to me as big as keystone is, that they don't do online sales. Austin homebrew, northern brewer, farmhouse, etc. all probably do a good portion of business through people who would likely never set foot inside their store because they're across the country. It's like evolution, pretty much if you're not online you're losing business.

 

[lordura]

Allow me to repeat myself...LORDURA FOR PRESIDENT!!!

Haha Thanks

 

[HBCBrewmaster]

I still don't understand how all homebrew stores aren't selling things online. It seems crazy to me as big as keystone is, that they don't do online sales. Austin homebrew, northern brewer, farmhouse, etc. all probably do a good portion of business through people who would likely never set foot inside their store because they're across the country. It's like evolution, pretty much if you're not online you're losing business.

must be too busy opening their second megastore.

 

[HBCBrewmaster]

I brew a ton of beer threw out the year. I pretty much bump up against my allowed limit every year. But I still buy beer it is good to taste new beers to expand your palate. Also I like the social aspect of going out.

Craft breweries are a great source of inspiration for me. Like Round Guys in Lansdale and Prisim in North Wales and Free Will in Perkasie.

 

[cracker]

I still don't understand how all homebrew stores aren't selling things online. It seems crazy to me as big as keystone is, that they don't do online sales. Austin homebrew, northern brewer, farmhouse, etc. all probably do a good portion of business through people who would likely never set foot inside their store because they're across the country. It's like evolution, pretty much if you're not online you're losing business.

As far as I know Keystone does online sells. At least their homepage would lead you to think so.

 

[Jayhem]

I still don't understand how all homebrew stores aren't selling things online. It seems crazy to me as big as keystone is, that they don't do online sales. Austin homebrew, northern brewer, farmhouse, etc. all probably do a good portion of business through people who would likely never set foot inside their store because they're across the country. It's like evolution, pretty much if you're not online you're losing business.

I highly agree with this.

We are in the smart phone age. Today 12 year olds are more computer/online literate than most baby-boomers. Most new homebrewers are younger generation and are used to purchasing almost everything online. If you don't have an online sales portion with competitive shipping and a GOOD website to attract customers you are going to fall behind along with other stone aged businesses.

I don't usually go to small restaurants or shops in my local area if they don't have a good website because that is how I found out about them and GPS to their location!

 

[CidahMastah]

Just got off the phone with the GM from North Country Malt. I'll post full details tonight on what their plans are.

It's going to be easier for everyone to get grain at group buy pricing!

Excellent work. Very interested in the details.

Since I am a free market believer I will continue to see what other options are out there. But I am happy that this has reached the ears up the totem pole.

 

[jeffb418]

Excellent work. Very interested in the details.

Since I am a free market believer I will continue to see what other options are out there. But I am happy that this has reached the ears up the totem pole.

O rly?

 

[Varmintman]

I highly agree with this.

We are in the smart phone age. Today 12 year olds are more computer/online literate than most baby-boomers. Most new homebrewers are younger generation and are used to purchasing almost everything online. If you don't have an online sales portion with competitive shipping and a GOOD website to attract customers you are going to fall behind along with other stone aged businesses.

I don't usually go to small restaurants or shops in my local area if they don't have a good website because that is how I found out about them and GPS to their location!

I am not disputing you Jayhem but using your post since it happens to be the general consensus.

My wife and I have talked it over at great length and have pretty much decided not to ship orders at least for now. We will have a online presence to have people place orders with us to be ready for pickup but I am thinking I do not want the hassle of shipping stuff.

I am not doing this for the money. I am doing it to get out of the house and meet new people. As a baby boomer I know many of my age group will shop online but I also know that a larger portion will go to a brew shop just to get out of the house and have a beer. That is my target market not online sales.

Will I lose market share...Heck yes but I do not care. I would rather spend time talking and drinking with a few solid customers than working filling orders any day.

Just my 2 pennies

 

[Beerbrew112358]

If you are ready to take the big step to open a LHBS: Congratulations. For those who want some advice please feel free to contact me. I’ll be glad to assist. I was a small business consultant and have 16 years experience with our LHBS. Send me a message and we’ll talk. I might suggest that a great place to learn and meet other LHBS owners would be the LD Carlson annual homebrewer’s conference in June. The AHA also has something at their conferences, although I am not familiar with what is available with them. The next one is in June 26th I think in Philadelphia.

 

[bkl63]

Kind of funny how Keystone has removed my posts and banned me from posting on their Facebook book page. A simple post that said "Buying a pallet of grain is not an illegal act" due a posting trying to quote the 200 gallon/year.

 

[crazyirishman34]

I thought it was 200 gallons per adult in the household?

 

[Varmintman]

If you are ready to take the big step to open a LHBS: Congratulations. For those who want some advice please feel free to contact me. I’ll be glad to assist. I was a small business consultant and have 16 years experience with our LHBS. Send me a message and we’ll talk. I might suggest that a great place to learn and meet other LHBS owners would be the LD Carlson annual homebrewer’s conference in June. The AHA also has something at their conferences, although I am not familiar with what is available with them. The next one is in June 26th I think in Philadelphia.

What would you say was the biggest issue facing a start up excluding the money. Reason I ask is I have owned and ran a small business and my wife has owned and run a large international business.

I have checked all the local laws and am aware of the taxes involved so I am thinking it is going to be at least similar to about any other business once you get a handle on inventory.

 

[bkl63]

As Keystone is in PA here is the PA info...


Pennsylvania Title 47, Chapter 1, Article IV, § 4-492
Malt or brewed beverages may be produced by any person without a license if such malt or brewed beverages are produced not for sale and total production does not exceed two hundred gallons per calendar year. Malt or brewed beverages produced in accordance with this paragraph may be used at organized affairs, exhibitions, competitions, contests, tastings or judging provided it is not sold or offered for sale.

I thought it was 200 gallons per adult in the household?

 

[bkl63]

Also as an FYI... I have been in contact with the American Homebrewers Association and an working through them as this is an issue for all home brewers.

 

[crazyirishman34]

Ah Mass they just make it legal and put no limits on amount.

 

[HBCBrewmaster]

Kind of funny how Keystone has removed my posts and banned me from posting on their Facebook book page. A simple post that said "Buying a pallet of grain is not an illegal act" due a posting trying to quote the 200 gallon/year.

I guess you shouldn't take it personal. The whole thing is gone now. These are not the droids you are looking for. carry on.

 

[bkl63]

It's still there and my three post are gone and I'm not allowed to post on the page.

I guess you shouldn't take it personal. The whole thing is gone now. These are not the droids you are looking for. carry on.

 

[Chrisl77]

Maybe he is a trying his jedi mind tricks on you.