Breweries selling 4% beer at regular craft prices

[JonM]

This is one of the reasons why I love brewing. I really like session beers, but few breweries make them because customers balk at $8 for a sixer of 4% when they can get stronger beer for the same price. Fewer still brew session beers well.

I can make a wonderfully flavorful 4% beer because I don't have to give a rip about what customers think.

 

[madscientist451]

On a recent Brewing Network podcast, a brewery owner told about how he is expanding, buying new fermentors, brite tanks and such and paying for it all out of cash flow, and all after being in business for only 2 years. The selling price of beer has nothing to do with cost of production. Its about how much the market will bear. I don't begrudge beer businesses the profits if their customers want to pay the price. People are used to paying $10-12 or even $17 a six pack, and $5-6 for pints. I go out for a beer now and then and buy a 12 pack when I want to try something new. But the high prices help justify (in my mind at least) the effort I put into homebrewing.
I keep thinking that the forces of supply/demand will force prices down, but it doesn't seem to be happening.

 

[Baja_Brewer]

I've been irked by the same thing that OP posted about - and its part of the reason that I haven't tried many different breweries session IPA's. Around here, I will see:

Founder's All Day IPA - $8.50-$9/6-pack, $18-$20/15-pack can's
and I compare this with:
Southern Tier's session IPA - $10.50-$11/6-pack (vs their 2X IPA at $12/6-pack)
Lagunita's session IPA - $8-10/6-pack (vs $10-$11.50/6-pack for Little Sumpin' Sumpin')

Sure, I want to try their session IPA's (begin flame war here), but I'm cheap enough that I'm sick of spending $10-12 on a 6-pack of something I end up disliking, so in these cases I'll either get the founders All Day 15-pack or the Southern Tier 2X IPA or Lagunita's Little Sumpin' Sumpin'.

 

[Orthobrewsky]

Exactly. like this:

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

I read the article which mentioned the more substantial cost of packing bottled beer. I've been wondering for a while why I typically pay a bit more for a 12 pack of cans (e.g. Sierra Nevada, New Belgium) than I do for a 12 pack of bottles. Supply/demand issues, perhaps?

 

[Peruvian802]

Why is a 2x4 at your local lumberyard more expensive than home depot? Why is a meal at your local Italian eatery more than at Olive Garden?

Volume and quality.

 

[zmanzorro]

There is also something to be said about cannibalizing your current beers on the shelf as well, but would also depend on how price sensitive your assumed consumer base is.

 

[soccerdad]

If it's half as good at 1/4 the price, you should get it. But I doubt that it is AS good I could prob bargain this down to between 60 and 75 but I usually buy a quart at a time ($25) so I don't go looking for deep discounts. I am no connoisseur of homemade liquor, but this is the finest I've ever had. More than a dozen people who have tasted this agree that it is the finest corn liquor they have ever tasted.

 

[ArkotRamathorn]

On a recent Brewing Network podcast, a brewery owner told about how he is expanding, buying new fermentors, brite tanks and such and paying for it all out of cash flow, and all after being in business for only 2 years. The selling price of beer has nothing to do with cost of production. Its about how much the market will bear. I don't begrudge beer businesses the profits if their customers want to pay the price. People are used to paying $10-12 or even $17 a six pack, and $5-6 for pints. I go out for a beer now and then and buy a 12 pack when I want to try something new. But the high prices help justify (in my mind at least) the effort I put into homebrewing.
I keep thinking that the forces of supply/demand will force prices down, but it doesn't seem to be happening.

I really cant imagine paying that much for a 6 pack. I might be spoiled that I can get a 6er of any of the regular New Glarus offerings (non-thumbprint series beers) for 8 bucks or less if its on sale, the thumbprint 4 packs are only 11 bucks for some truly delicious beers. Most places around here its only 4 bucks a pint, I ahve a couple places in walking distance that are only 3 dollars for a pint. Local brewery offers 4packs of 16oz cans for I think 9 dollars if my memory serves... seriously Wisconsin liqour prices, I can't imagine what some of you guys go through to buy good beer.

God, I love living in Wisconsin.

What do commercial breweries spend on ingredients like malts for example? I mean, the difference between a 4% beer and a 6% beer in terms of malts isn't a HUGE jump in terms of malt, neither is the hops. Commercial brewery spends the same amount of time all in on both beers and needs to push them out within 2 weeks to continue being profitable regardless of the ABV (since most breweries do not have the room for aging unless they have an established sour program). In the end try not to think about it, because the way that liqour laws are, thats probably 99% of the issue why you see price differences that seem like complete nonsense.

 

[wailingguitar]

That graphic makes me wonder. If 50% of the cost is distributor and retail margins, how come growler fills and pints straight from the taproom cost as much as they do?

If I can get a 6 pack for $9, and most of that is distributer/retailer margin, how come I pay $5+ for a pint when I buy from the brewery itself and they get to skip those costs?

The margins on wholesale beer (kegged and especially bottled/canned) are razor thin, it is about how much volume you can move if you are going to make any money. Breweries look to taproom sales as a way of supplementing those slim margins and taproom sales have saved many struggling breweries. Further, if a brewery sells a pint for $3 and a local bar, after markups, has to sell that same pint for $5, the brewery will be cutting it's own throat to charge $3... that bar is going to stop carrying the brewery's beer. It is unwise to compete against your customers.

 

[user 198378]

No one's forcing people to buy the stuff. Use your judgement!

 

[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.