Breweries selling 4% beer at regular craft prices

[HarborTownBrewing]

With that same logic, Lagers should be 2x+++ in price for the extra time and the temp requirements to produce them. A place like Wolverine Brewing in Ann Arbor exclusively brews Lagers (good ones) but their prices are similar to other craft brewers making ales.

Breweries will charge what you'll pay. Just like any other business.

Just like growlers: it makes absolutely no sense to me that anyone would pay $16-$20 for a growler fill, which is the equivalent of 5 bottles.

 

[Ski12568]

Maybe they use better quality malts to get the flavor a they need from it being low ABV? There was a basic brewing podcast from September 2013 talking to a brewer about making a beer a session beer and he mentions this.

 

[elkshadow]

Good discussion and I appreciate all the feedback and I understand a lot of what is being said. I guess in my mind it just doesn't "seem right." I know that essentially means nothing but that's how I feel about it.

For me, it's not about getting more drunk or whatever and I'm really not that outraged about it. I'm just using ABV as a gauge of how much physical material goes into making it. I realize everything else costs the same after it's brewed but, again, it just doesn't "seem right" that a 4% beer with 25 IBUs cost the same or more as a 8.5% IIPA with 70 IBUs.

 

[dpatrickv]

When I go to buy beer, I dont look at price. I look at what style it is, and if I havent had it before. If its a style I like, and I havent had it, chances are I'll pick it up.

If I have to sit and be picky about price and only have so much to spend, then I would be better off using that money for something else.

 

[ktblunden]

Good discussion and I appreciate all the feedback and I understand a lot of what is being said. I guess in my mind it just doesn't "seem right." I know that essentially means nothing but that's how I feel about it.

For me, it's not about getting more drunk or whatever and I'm really not that outraged about it. I'm just using ABV as a gauge of how much physical material goes into making it. I realize everything else costs the same after it's brewed but, again, it just doesn't "seem right" that a 4% beer with 25 IBUs cost the same or more as a 8.5% IIPA with 70 IBUs.

You're still comparing two different breweries at two different retailers. Again, if the same brewery is selling a 4% blonde for more than their DIPA then it would be odd indeed. Until then you're comparing apples sold at a fruit stand to oranges sold at a grocery store.

 

[Calichusetts]

This conversation pops up here every few months. You really have to understand that breweries have virtually no say in pricing, the infographic early in this post really sums it up. 60% or more of the price is determined by distributors and retailers. I've seen the same 4-pack of beer range from $9.99 to $16 in the same town. I saw Bourbon County this year at one retailer for $26 a 4-pack. I got it for $18 in another town.

Bars are often upping the price 5 times or more. Some breweries go to great lengths to work with distributors, retailers and bars to get a price they all agree on, whether its higher or lower, but at the end of the day, they really don't have a big say in the price.

If you really think about it, we determine the price. If no one buys 6-packs that go for $10 or more, the stores will drop the price. Some people don't mind dropping $10-15 on a bomber of beer, even more in some cases. If there is enough of those people out there, there is no reason for a distributor or retail to not charge that price and make a profit.

 

[muels]

How can Deschutes River Ale at 4% cost more than Pyramid Outburst IIPA at 8.5%? I can buy Outburst at WM for 7.47 a sixer and DRA is 8.99 at safeway. ?!?!?!?!?!



"So wait, we can use half the ingredients but call it 'session IPA' or 'Long Haul Pale Ale' or whatever and still charge 9 bucks a six pack?"



Thoughts?

Same way a Dodge Viper cost more than a Dodge Van. Quality has nothing to do with size. Ahem


Sent from my iPad using Home Brew

 

[A2HB]

I personally only brew and buy beers that are >6% ABV. Yes taste is primarily my #1 concern when purchasing a beer, but I also want a good buzz from the beer as well. That was the primary reason I stopped drinking All Day. There are only a few circumstances when I'll prefer to drink a low abv beer, most other times I'm having something on the stronger side either purchased or personally brewed

 

[wonderbread23]

Remove

 

[Evan_L]

The session beers take up fermentor space, why would they use that space on a beer they will sell for less? I'm sure many other factors are involved, however the limiting factor is tank space.

 

[hunter_le five]

Bars are often upping the price 5 times or more. Some breweries go to great lengths to work with distributors, retailers and bars to get a price they all agree on, whether its higher or lower, but at the end of the day, they really don't have a big say in the price.

The beers in our restaurant bars are sold at a 3-4X markup - that is, from the distributor's price to us (which in turn is about 33% less than retail from the store). I don't know how that compares to the price from the brewery, but that's a lot of margin that's definitely NOT going to the brewer.

And the beer prices at our establishments are some of the cheapest in town

 

[midfielder5]

Move to the UK? Kidding but their session beers are cheaper because the govt taxes are by ABV.

 

[Misplaced_Canuck]

The session beers take up fermentor space, why would they use that space on a beer they will sell for less? I'm sure many other factors are involved, however the limiting factor is tank space.

Tank space is what limit production, yes, of course. However, there are plenty of breweries out there with OVER-capacity. At that point, the limiting factor is sales, not capacity.

We have a 20bbl brewery here in Columbia SC that is running at only about 25% capacity because their beers aren't quite popular yet. Yet another brewery (which shall remain nameless) is running at nearly 100% capacity while producing very average beers and they sell all they make.

As for prices, I have to pay MORE for local craft beers at a bar than I have to pay for North Carolina beers.

Sometimes... there's just no rhyme or reason.

MC

 

[CUrchin]

Why should ABV be the measure of the value of beer? I want GOOD beer, whether its strong or not. Also, these folks are trying to run businesses, and with all the costs/regulation/taxes I bet you the margins are tighter than you think.

 

[EJay]

Actually, at least in SC.... The LAW forces the brewery's tap room to charge "market price" for their growler fills. They can't undercut the retailer.

OY

Even if it isn't law... if you're a brewer big enough to have distributors and retailers carrying your product... if your tap room sells at a much lower price, the retailers will drop you fast. They obviously don't want you competing with them on price. Thats probably WHY its law in some places.

I deal with this all the time in commercial wine.

 

[zmanzorro]

Why should ABV be the measure of the value of beer? I want GOOD beer, whether its strong or not. Also, these folks are trying to run businesses, and with all the costs/regulation/taxes I bet you the margins are tighter than you think.

You know what's really funny? Breweries charge more money for higher abv. It's all about PERCEIVED value by the customer.

 

[slym2none]

When I go to buy beer, I dont look at price. I look at what style it is, and if I havent had it before. If its a style I like, and I havent had it, chances are I'll pick it up.

If I have to sit and be picky about price and only have so much to spend, then I would be better off using that money for something else.

It must be nice to be rich.

 

[eulipion2]

Speaking of perceived value, I know a brewery that makes a damn fine cream ale, but the various retailers want $15 for a 6-pack. While I enjoy drinking the beer, there's no way I'm paying $15 for a 6-pack of cream ale. I could get a case of Genessee Cream Ale for about the same price, or brew a 5-gallon batch for about $20. Fortunately we as homebrewers have options...

 

[Talgrath]

How can Deschutes River Ale at 4% cost more than Pyramid Outburst IIPA at 8.5%? I can buy Outburst at WM for 7.47 a sixer and DRA is 8.99 at safeway. ?!?!?!?!?!

"So wait, we can use half the ingredients but call it 'session IPA' or 'Long Haul Pale Ale' or whatever and still charge 9 bucks a six pack?"

Thoughts?

Because most of the cost of beer has nothing to do with the ingredients. Handy graphic from HuffPost below:

The vast, vast majority of the costs of getting beer into a bottle or can and onto a shelf have nothing to do with what's in the bottle. The decrease in malt, hops and yeast isn't going to be significant towards the per bottle/can cost, at best $0.05. The difference in costs for a beer almost exclusively come down to two things: the retailer's margin and the distributor's margin, that's more more than half of the cost of your six pack. That's why I can go to two different grocers and look at the same beer, and in grocer #1 six pack #1 is $9 and six pack #2 is $7, but if I go to grocer #2 six pack #1 is $8 and six pack #2 is also $8; each store has a different distributor and/or different retail charge for their beer selections. There's a reason why most breweries start with a tasting room instead of a bottling line, and it's because distributors and retailers take most of the money from the sales.

 

[dpatrickv]

It must be nice to be rich.

Not even close. I just don't need to drink. If I have to sit and be mindful of what Im spending on beer, then I shouldn't probably be buying beer.

If another 3 bucks a six pack is going to hurt me then I REALLY shouldn't be out spending money.

 

[azazel1024]

This conversation pops up here every few months. You really have to understand that breweries have virtually no say in pricing, the infographic early in this post really sums it up. 60% or more of the price is determined by distributors and retailers. I've seen the same 4-pack of beer range from $9.99 to $16 in the same town. I saw Bourbon County this year at one retailer for $26 a 4-pack. I got it for $18 in another town.

Bars are often upping the price 5 times or more. Some breweries go to great lengths to work with distributors, retailers and bars to get a price they all agree on, whether its higher or lower, but at the end of the day, they really don't have a big say in the price.

If you really think about it, we determine the price. If no one buys 6-packs that go for $10 or more, the stores will drop the price. Some people don't mind dropping $10-15 on a bomber of beer, even more in some cases. If there is enough of those people out there, there is no reason for a distributor or retail to not charge that price and make a profit.

Very much. That said, within a breweries line-up, at the SAME store, rarely do I see something like a 5% blonde ale go for more than a 9% DIPA. Granted, the price may not reflect the difference in base costs to produce, the Blonde might be $8.99 for a 6-pack and the DPIA might only be $10.99.

These days, I really only buy beer for 4 reasons.

1) I am on vacation
2) I need to find a specific beer for a tasting and my family/friends have told me I am not allowed to bring HB (family and friends probably have 4-5 tastings a year)
3) I am out at a restaraunt and feel like having a brew
4) I am looking for something very specific and generally "off kilter", which to me tends to mean something "big", or sour or maybe I want to get a few sixers of a variety I haven't had in awhile because I want inspiration for a new brew. Like I might get 2-3 sixers of Dortmunder Export before I whip up a batch of my own.

I just brewed a Mild, 5 gallons worth and it cost me about $15. That was only because I was trying to compare S04 and Notty, so the yeast was a big part of the cost. If I was reusing, it wouldn't have cost me $10 for 5 gallons of good beer. Sure, a RIS would have been 3x the price, but that still would be a lot cheaper than anything I can get at the store. And often (though not always) better.

 

[andrewmaixner]

Because most of the cost of beer has nothing to do with the ingredients. Handy graphic from HuffPost below:

The vast, vast majority of the costs of getting beer into a bottle or can and onto a shelf have nothing to do with what's in the bottle. The decrease in malt, hops and yeast isn't going to be significant towards the per bottle/can cost, at best $0.05. The difference in costs for a beer almost exclusively come down to two things: the retailer's margin and the distributor's margin, that's more more than half of the cost of your six pack. That's why I can go to two different grocers and look at the same beer, and in grocer #1 six pack #1 is $9 and six pack #2 is $7, but if I go to grocer #2 six pack #1 is $8 and six pack #2 is also $8; each store has a different distributor and/or different retail charge for their beer selections. There's a reason why most breweries start with a tasting room instead of a bottling line, and it's because distributors and retailers take most of the money from the sales.

Must have missed that post back on page 2

 

[andrewmaixner]

2) I need to find a specific beer for a tasting and my family/friends have told me I am not allowed to bring HB (family and friends probably have 4-5 tastings a year)

Them sounds like fightin' words!

 

[azazel1024]

Them sounds like fightin' words!

They got tired of their picks always losing in the blind tastings.

Or at least that is what I tell myself (I did often win).

 

[agrazela]

Exactly. like this:

Article: http://www.huffingtonpost.com/2014/09/12/craft-beer-expensive-cost_n_5670015.html

So if this is true, then all those poor schlubs schlepping around bags and barrels at the brewery could be given double pay, and it would only add like 12 cents to a six-pack of craft beer?

 

[Talgrath]

So if this is true, then all those poor schlubs schlepping around bags and barrels at the brewery could be given double pay, and it would only add like 12 cents to a six-pack of craft beer?

The only wiggle room is "brewer's margin", at least contractually. Brewer's margin is all of the money the brewery gets for the beer after the listed costs are taken out, about $0.64 on an $8 six pack, that's not necessarily profit that's just what the brewery gets. The brewery still needs to pay rent, electricity, gas (if necessary), equipment, etc. etc. Also keep in mind that bottling likely isn't their only source of revenue, most of their revenue probably comes from keg sales and pints served at the tasting room. So...long story short, not really.

 

[azazel1024]

The only wiggle room is "brewer's margin", at least contractually. Brewer's margin is all of the money the brewery gets for the beer after the listed costs are taken out, about $0.64 on an $8 six pack, that's not necessarily profit that's just what the brewery gets. The brewery still needs to pay rent, electricity, gas (if necessary), equipment, etc. etc. Also keep in mind that bottling likely isn't their only source of revenue, most of their revenue probably comes from keg sales and pints served at the tasting room. So...long story short, not really.

And everyone else generally wants to keep their margins. So either the brewery takes a big hit on profitability, or else because their costs jump up, all of the down stream prices jump up too to keep the margins intact.

Granted, it isn't lock-step, but most places aren't going to turn around from making something like a 30% margin, to only making a 20% margin.

 

[Talgrath]

And everyone else generally wants to keep their margins. So either the brewery takes a big hit on profitability, or else because their costs jump up, all of the down stream prices jump up too to keep the margins intact.

Granted, it isn't lock-step, but most places aren't going to turn around from making something like a 30% margin, to only making a 20% margin.

Yep. Especially since most distributors are owned, in part or in full, by big beer companies like AB Inbev or SAB Miller, they have an incentive to squeeze every red cent out of craft brewers if they can.

 

[brewcat]

$10 a six pack is why I homebrew more. That is my price point.