Craft Beer Price Sticker Shock!

[bobeer]

Only a few years ago that "brewery" was part of Peg's Cantina in Gulfport. I used to ride my bike there and drink that beer under the trees, halfway through my ride. They got big time since then.

I like that people will pay big dollars for beer. It shows they really love it and appreciate quality. I'd guess those people don't have 3 kids in college

I hear you! I have 2 little ones that eat up all my extra beer money in diapers...
I do think it's cool that people will pay that much for a beer to support their favorite brewery but I still think it's crazy talk to pay $30 for 24 ounces. Too rich for my blood!

 

[bleme]

I have 2 liquor stores near me that stopped putting prices on their beer so it is a 'surprise' when you get to the register. I'm to the point where I just won't go there any more. The grocery store may not have quite the selection, but at least I know I'm not paying $13 for a 6'er of Lagunitas...

 

[Steveruch]

I can't remember the last time I went anywhere and bought a pint. The only beer that I drink that I haven't brewed is during summer beer festival season and I "pay" for that beer by volunteering.

 

[myelo]

I have 2 liquor stores near me that stopped putting prices on their beer so it is a 'surprise' when you get to the register.

Wow that's annoying. I usually fight annoying with annoyance. Grab a clerk, hold up a beer and ask "How much is this? OK thanks" Pick up the next one "How much is this one? OK, thanks." Pick up next one "How about this?" Next one "Sorry to keep bothering you but someone forgot to put prices on these. How much for this one?"

 

[Murphys_Law]

Wow that's annoying. I usually fight annoying with annoyance. Grab a clerk, hold up a beer and ask "How much is this? OK thanks" Pick up the next one "How much is this one? OK, thanks." Pick up next one "How about this?" Next one "Sorry to keep bothering you but someone forgot to put prices on these. How much for this one?"

I like your style!

 

[quijiba]

There is really no reason for it... the market is there right now and their hosing everyone really...

I live in Ottawa Ontario Canada.. theres about 30+ microbreweries and there's really no reason for the pricing on most of the beers.

I had put together a list of breweries and their keg prices a while back on another forum.. and I find it quite funny when it came to a few outcomes...

i compared about 4-5 companies that would actually sell kegs to private consumers.

for 50L kegs they ranged from 240 to 260 and a couple went close to the 300 and above range. (why I got no damn idea)


30L where floating at the 130-180 mark.

THEN i contact this 1 micro brewery... no different as far as set up goes, their just as big and have actually been around longer then most others thinking about it....

and their 50L kegs went for 125$ at the time of those quotes. Now their expanding now selling in LCBO and beer stores and the price of the keg has went up to 150$ and now their option of what I can get in a keg has dwindled from anything to an option of 4 different kinds. which royally sucks but so be it...


I had turned around and asked another microbrewery if they would price match another reputable brewery for pricing on kegs and all i got in reply was "we use premium only ingredients in our beer and if you can get cheaper all the power to you" (the cheaper brewery hand pics their hops and grows them ect so by no means are they cheaping out)

All in all... how is it that 1 micro brew be SOOO much cheaper then 99% of all the others and still thrive and expand with just as much over head... now that being said the cheaper brewery is outside of the city and I do have to drive out a fair distance to get to them, but its still sad thinking a 2 hour drive to get their beer still ends up cheaper.


And I wont count one of the breweries I contacted as it was a couple guys brewing out of their garage on weekends quoted me 250$ for a keg LOL

The margins are thin man, legitimately. Depends what brewery you go to (and don't get me wrong, some are hosing hard, particularly those selling a run of the mil pils for those high premium prices), but the smaller you are the harder it is to make a profit. I'm running a 1BBL (in Canada) and to be honest I couldn't let a 50L keg go for less than $450.00 (for a 6.3ish IPA), which to be honest isn't super far out of line with guys like Stone ($488 for 58.6L) and Sierra Nevada ($415 for their pale ale 58.6L, sierra is a 1mil+BBL brewery/year by the way).

We sell most of our bottles for $5/per (on average) for 500ML. If I drop that to $3/per i'm out of business lol. I intend to scale up to a 15HL in the not too distant future, which would allow more flexibility on price, but even at that scale when you crunch the numbers, you're still looking at selling kegs at about $7/L.

Anyways that's a whole lot of rambling to say don't drink the beer if you don't think its good enough to justify the cost, because honestly, I agree with you, many are not worth that premium price tag.

 

[quijiba]

Yeah, buying beer at the local store has become incredibly expensive.
Part of the blame though, is the price of hops.
As people demand more beers hopped with 10x what beers were hopped at 10 years ago, not only has the price of hops gone up, but when a brewery is using 5-10x the amount it normally would of the most expensive ingredient in beer, that's a dramatic increase in raw material cost.
So while there are many factors to blame, those of us who want the next big hoppy thing are also to blame.

I go to Germany pretty much every year and I love the fact that most beer (and I tend to frequent smaller local breweries) is less than 2 Euro for a half liter of amazing, fresh local brew.

And if any of you think German beers are boring or limited to 3 or 4 variations on the same old theme, check out this beer menu from one of my top 3 favorite brewpubs in Germany:

Hit the nail on the head. The reason beer pricing is way out of whack is hops. For an IPA it creeps close to half the cost of the raw ingredients (seriously, even at wholesale cost), and more and more IPAs are popping up in shops every day, normalizing high prices. If you crunch the numbers on a Belgian, Bock, pils, or whatever with fewer hops, the cost per batch is DRAMATICALLY less.

 

[Tommydee]

Stopped by Demented here in central NJ for the first time. I'm kind of new to the craft beer scene, and their prices are extremely fair. $6 for a pint of their Belgian strong aged in brandy barrels. I left a big tip, felt I was underpaying. I paid $23 for a growler, including the bottle, of their Sloth milk stout..maybe it's the snow, but this beer is awesome. It's America....charge what you want, and consumers will vote with their dollars. I will be certainly making more trips to Demented, and will suggest to the local watering holes to feature their beers.

 

[Cavpilot2000]

Hit the nail on the head. The reason beer pricing is way out of whack is hops. For an IPA it creeps close to half the cost of the raw ingredients (seriously, even at wholesale cost), and more and more IPAs are popping up in shops every day, normalizing high prices. If you crunch the numbers on a Belgian, Bock, pils, or whatever with fewer hops, the cost per batch is DRAMATICALLY less.

A small regional brewery near me that has only been in business for about two years has 50,000 lb of Galaxy hops on order for this year. 50k lbs. For one small brewery. Multiply that by lots more breweries and many more hot varieties of hops, and it doesn't take a rocket scientist to see that's a major factor in driving up beer costs (and hops price for us).

So before anyone whines about the price of beer, pause a second. Have you bought a massively hopped commercial beer lately? Then you are partially to blame.

 

[Calder]

The reason beer pricing is way out of whack is hops. For an IPA it creeps close to half the cost of the raw ingredients (seriously, even at wholesale cost), and more and more IPAs are popping up in shops every day, normalizing high prices. If you crunch the numbers on a Belgian, Bock, pils, or whatever with fewer hops, the cost per batch is DRAMATICALLY less.

A small regional brewery near me that has only been in business for about two years has 50,000 lb of Galaxy hops on order for this year. 50k lbs. For one small brewery. Multiply that by lots more breweries and many more hot varieties of hops, and it doesn't take a rocket scientist to see that's a major factor in driving up beer costs (and hops price for us).

So before anyone whines about the price of beer, pause a second. Have you bought a massively hopped commercial beer lately? Then you are partially to blame.

Bull! I agree hops can be the costliest part of the ingredients, but it doesn't explain the high costs of some beers. My average cost of ingredients in a 12 oz beer is less than 30 cents, and maybe double that for a hop-bomb. The commercial breweries are paying less than half the price for their ingredients than I do.

The high costs are overhead (buildings, salaries, equipment, advertising, etc), and probably paying off loans taken out to start the businesses. ..... And some profit!

 

[Cavpilot2000]

Bull! I agree hops can be the costliest part of the ingredients, but it doesn't explain the high costs of some beers. My average cost of ingredients in a 12 oz beer is less than 30 cents, and maybe double that for a hop-bomb. The commercial breweries are paying less than half the price for their ingredients than I do.

The high costs are overhead (buildings, salaries, equipment, advertising, etc), and probably paying off loans taken out to start the businesses. ..... And some profit!

Well of course those things come into play, and let's not forget other high costs like packaging (labels, printed six-pack carriers), shipping, etc, all of which we as homebrewers don't have to bear.

And I will never fault anyone in any business for making a healthy profit margin. Let's face it, breweries do not exist for the purpose of making us happy (that's an ancillary benefit, and one that many brewers take pride in, but that is not the purpose of a brewery). The purpose of a brewery, like any other business, is to make money.

The discussion is focused on why beer prices have increased so dramatically in the last few years, and supply/demand, particularly with hops, is one of those factors that has changed in recent years. Hell, ten plus years ago, the business was forecasting hops shortages due to a dramatic increase in demand of IPA, especially west coast types. Now NEIPAs are taxing the supply side even more.

Is there any one single factor responsible? No. There are many, including rise in demand/price of hops, the "upmarket" shift of craft beer, and others.

 

[MaryB]

Brau Brothers near me is growing most of their own hops, plus they have helped a few others get started in hop production to keep them in hops at a reasonable price. If I had an acre of land I would put it in hops, would be a sweet income stream!

A small regional brewery near me that has only been in business for about two years has 50,000 lb of Galaxy hops on order for this year. 50k lbs. For one small brewery. Multiply that by lots more breweries and many more hot varieties of hops, and it doesn't take a rocket scientist to see that's a major factor in driving up beer costs (and hops price for us).

So before anyone whines about the price of beer, pause a second. Have you bought a massively hopped commercial beer lately? Then you are partially to blame.

 

[Bosh]

Like a lot of things, the ingredients in in beer have surprisingly little to do with the costs and distribution and retail eat up much more than you think.

The cuts the retailers and distributors get are MASSIVELY bigger than what you're paying for the hops.

The best way for a small outfit to make money is (if possible) cut out the middleman and sell directly to the consumer. Vastly more money that way.

 

[Cavpilot2000]

Brau Brothers near me is growing most of their own hops, plus they have helped a few others get started in hop production to keep them in hops at a reasonable price. If I had an acre of land I would put it in hops, would be a sweet income stream!

I have 20 acres in South Carolina that I would plant with hops in a second if any decent varieties would grow there, but alas, it's not a good climate for hops.

Plus, so many popular varieties these days are patented, so it's not like you can just grow Galaxy at home (especially for resale, even if you could).

 

[RRL]

The margins are thin man, legitimately. Depends what brewery you go to (and don't get me wrong, some are hosing hard, particularly those selling a run of the mil pils for those high premium prices), but the smaller you are the harder it is to make a profit. I'm running a 1BBL (in Canada) and to be honest I couldn't let a 50L keg go for less than $450.00 (for a 6.3ish IPA), which to be honest isn't super far out of line with guys like Stone ($488 for 58.6L) and Sierra Nevada ($415 for their pale ale 58.6L, sierra is a 1mil+BBL brewery/year by the way).

We sell most of our bottles for $5/per (on average) for 500ML. If I drop that to $3/per i'm out of business lol. I intend to scale up to a 15HL in the not too distant future, which would allow more flexibility on price, but even at that scale when you crunch the numbers, you're still looking at selling kegs at about $7/L.

Anyways that's a whole lot of rambling to say don't drink the beer if you don't think its good enough to justify the cost, because honestly, I agree with you, many are not worth that premium price tag.

When i think of kegs I think of a bulk purchase and a fair amount of less work when it comes time to bottle. I mean by the time you count in cleaning bottles and bottling or canning your looking at about 2-3 hours of cleaning and bottling if you got a quick working system vs a keg 1 hour cleaning fill then done and they just saved a good chunk of time and profit and your using less material.


Ill pay for a beer I like, even if I think their hosing me, I understand you got to start somewhere and cant just give beer away and compete that way... wouldn't work. I guess im mainly "annoyed" with prices when doing bulk orders where the savings is next to non compared to buying per can.