Craft Beer Price Sticker Shock!

[kristiismean]

Are you sure its 3 Floyds doing the gouging? I thought their prices at the brewery were pretty decent. I got several cases of ZD cheaper than at the local stores.

It probably isn't, as their prices at the brewery are pretty decent.

But since it's been going on for years, from one beer to another, it would seem something needs to be fixed, and that they support it (but as I said, they are upping production, so hopefully this solves all) currently you can get all the gumball head you desire. on a sat.... (delivery by me is on Tuesday's)

 

[Sailingeric]

your math is broken. Sure, that's the ingredient cost. But add in the cost of your time to make it, from gathering ingredients through final packaging. And the cost of the space you brew in. and the equipment. Sure, on a hobby you don't care, but when you run a business you sure as hell do. When you buy beer you aren't just paying for the ingredients, you're paying for their time, rent, utilities, etc etc. It all adds up.

You are right but then I would have to amortize my equipment cost over the expected life, depreciate my house, and said equipement into the time of brewing, opportunity cost of brewing beer versus earning money as a brain surgeon if I gave up beer brewing time to study to become a brain surgeon. I know they have business to run but do I want to spend $20 for a bottle of beer or ingredients plus a little of my time to make a keg of beer?

 

[mongoose33]

your math is broken. Sure, that's the ingredient cost. But add in the cost of your time to make it, from gathering ingredients through final packaging. And the cost of the space you brew in. and the equipment. Sure, on a hobby you don't care, but when you run a business you sure as hell do. When you buy beer you aren't just paying for the ingredients, you're paying for their time, rent, utilities, etc etc. It all adds up.

I would argue the math is not broken.

I once was buying a product at a hardware store and the clerk was trying to upsell me into a more expensive item that would save some time. He asked me "What's your time worth?" which is a sneaky question. If I'm not doing anything money-making with that time, it's not worth anything--and I wouldn't have been.

The idea that you have to account for your time only makes sense if you were going to use that time to make money. Since in most of our cases that's not the case, the beer really does cost 50 cents a pint or to whatever our actual direct costs add up.

Further, if we find the process of brewing relaxing, we might be saving time on a therapist's couch or parting with money for some prescription.

You can also, if you like, think about it as paying yourself with the savings so that you're earning money by earning savings.

[I reload ammo; I can reload .45 ACP ammo for 13 cents or less--bullet, powder, primer. It costs generally 40 cents a round for store-bought commercial ammo. If I reload 400+ per hour on my progressive, and I'm saving 27 cents a round....I'm "paying" myself $108 per hour in savings.]

So, you're right in that we don't have to recover costs for our labor, rent, utilities, etc. that a brewery might have. It's precisely because we don't that our beer costs $1.00 a pint or less.

 

[stevedasleeve]

Hence home brew. Even now with hop prices >$25/lb I can brew 5.5 gallons for $30. And frankly my beer is far better than most commercial beers.

 

[GPP33]

Some of these prices are getting out of hand, but Chicago seems to be self regulating, to a point.

The biggest offender unfortunately makes it feel like it's a privilege to pay $17.99 for a 6 pack among it's $10.99 peers. It's nice to see a few stores Dropping 3 floyd's because of this. 3 Floyds is also trying to increase production, so hopefully that works out.

Other than 3 floyds, there are not really any other major beers that gouge. I am not talking about limited releases, etc, like half-acre double daisy, Bells hopslam (or which some stores gouge, it's a 17.99 msrp and the stores sell it for 23+) or others.

New Glarus in WI on the other hand is NOT the place to buy their packaged stuff. Yes, they have their limited stuff in stock, but they charge full MSRP for everything and it's cheaper to get it at the gas station down the street. I did not make it there in 2016 (but have 2015\2014\2013\2012 etc) and supposedly per an employee, they have to charge MSRP and cannot charge less than their MSRP since they set the MSRP. but stores can since they are not the producer. weird...

If you run a business that makes a product chances are you need distributors to help you get it to the end customer. Undercutting those distributors wouldn't be a wise move. It's not a "law" per say but it's pretty good practice to sell at MSRP and let your distributors undercut you. It's also a good practice to set minimum advertised pricing so you can ensure your product nets your distributors a fair margin or they won't want to distribute your goods anymore.

If you call my company and try to order something we'll sell it to you at MSRP but we'll also tell you the names of a few distributors who'll sell it to you for a lot cheaper. It's all part of doing business.

 

[cegan09]

I would argue the math is not broken.

I once was buying a product at a hardware store and the clerk was trying to upsell me into a more expensive item that would save some time. He asked me "What's your time worth?" which is a sneaky question. If I'm not doing anything money-making with that time, it's not worth anything--and I wouldn't have been.

The idea that you have to account for your time only makes sense if you were going to use that time to make money. Since in most of our cases that's not the case, the beer really does cost 50 cents a pint or to whatever our actual direct costs add up.

Further, if we find the process of brewing relaxing, we might be saving time on a therapist's couch or parting with money for some prescription.

You can also, if you like, think about it as paying yourself with the savings so that you're earning money by earning savings.

[I reload ammo; I can reload .45 ACP ammo for 13 cents or less--bullet, powder, primer. It costs generally 40 cents a round for store-bought commercial ammo. If I reload 400+ per hour on my progressive, and I'm saving 27 cents a round....I'm "paying" myself $108 per hour in savings.]

So, you're right in that we don't have to recover costs for our labor, rent, utilities, etc. that a brewery might have. It's precisely because we don't that our beer costs $1.00 a pint or less.

You missed my point. I was saying that it's not fair to compare what you perceive as your cost to make beer to the cost for commercial beer. Because you are not accounting for your time, equipment, space, etc since it is a hobby for you. However commercial breweries do in fact have to account for all of these things. So it's not fair to say that commercial prices aren't fair because they aren't the same as your home brew cost.

 

[mongoose33]

You missed my point. I was saying that it's not fair to compare what you perceive as your cost to make beer to the cost for commercial beer. Because you are not accounting for your time, equipment, space, etc since it is a hobby for you. However commercial breweries do in fact have to account for all of these things. So it's not fair to say that commercial prices aren't fair because they aren't the same as your home brew cost.

Sure it's fair. I don't have to buy their stuff, and I can make my own far cheaper.

We're comparing value here in addition to cost. My beer, IMO, is every bit as good. My cost is far, far less than if I drink theirs.

Their cost is irrelevant. What is relevant is their price versus my cost. Would your argument still hold if they were charging $100 a pint?

 

[JordanKnudson]

Are you sure its 3 Floyds doing the gouging? I thought their prices at the brewery were pretty decent. I got several cases of ZD cheaper than at the local stores.

Prices at their taproom tend to be okay (although I am one of the whiners who hates that they don't offer any short pours or sampler flights), but it is true that they are consistently one of the most expensive breweries on the shelves in stores around the city. I love 3F, but when a 6-pack of Yum Yum costs $13, and a sixer of Revolution costs $10, and some of Off-Color's offerings are going for $8-9, and Lagunitas is $9, and 5 Rabbit is $10, and even Surly is $12 for 4 16-ouncers, I have a hard time going for the 3 Floyds very consistently.

 

[cegan09]

Sure it's fair. I don't have to buy their stuff, and I can make my own far cheaper.

We're comparing value here in addition to cost. My beer, IMO, is every bit as good. My cost is far, far less than if I drink theirs.

Their cost is irrelevant. What is relevant is their price versus my cost. Would your argument still hold if they were charging $100 a pint?

I love when people think this way on a very specific subject. your cost has nothing to do with their price. Sure, you can go make your own beer and be happy and never buy commercial beer again. Go for it. Doesn't change the fact that commercial breweries have additional cost that naturally makes prices higher. The fact that some push the prices higher than others is just capitalism and the fact that apparently others think it's ok.

You can have the same discussion about almost anything. I do my own car work. The cost to do this is significantly lower than going to a shop (if I ignore the value of my own time since I generally work slower than a shop). But a shop has to assign value to the time spent by the mechanic and pay him as such. they also have to pay for the building, insurance, and a whole slew of other things that I don't. There is also the risk that I screw up a repair and make something else worse. Is that risk larger than the additional cost of going to a shop I can then point blame on later? That's a decision that's different for everyone.

Similarly I could go make my own bolts and nuts. I have access to all the machines. Stock is cheap. But it won't be cheaper than just buying from the store.

Examples fall all over the spectrum. In this case, sure it's cheaper to make beer at home. eventually. once you forget just what you've spent both in dollars and time to buy the equipment and set it up. But that has zero impact on what retail cost should be because it doesn't involve all the same factors.

 

[xCSx]

This is still way cheaper than good wine or whiskey.

 

[mongoose33]

I love when people think this way on a very specific subject. your cost has nothing to do with their price.

Well, it appears you're missing my point, which places the blame on probably me for not making it as clear as it could be.

My cost has nothing to do with their price, you're correct on that. But the difference between their price and my cost is the issue here. That's the key item in the decisionmaking.

I'm not a professional brewer so I am not bound to count my labor as somehow factoring into my cost. They do. I get it, that's patently obvious.

The key here is each of us make a decision trying to decide if the difference between our cost and their price, while factoring in the quality of what we brew, is great enough to justify the time and effort spent brewing. That decision may be different for everyone, and that's fine.

Sure, you can go make your own beer and be happy and never buy commercial beer again. Go for it. Doesn't change the fact that commercial breweries have additional cost that naturally makes prices higher. The fact that some push the prices higher than others is just capitalism and the fact that apparently others think it's ok.

You're arguing something nobody is disputing. Yes, commercial breweries have issues i don't have to deal with. The issue is the difference between what I pay to brew (less than $1/pint) and what I have to pay to buy their stuff--which may or may not be as good.

I showed earlier that valuing your time only matters if you're brewing instead of doing something else that would make money. If, in not brewing, you aren't spending that time earning money in some other capacity, then the value of that time is zero. Ergo, my "business model" is cheaper than theirs. Has to be. And that's why I don't buy beer commercially except when I'm out.

 

[Weezy]

The free market assumes informed consumers.

Actually it's the opposite. Capitalists (and politicians) prey on the uninformed.

Remember what P.T.Barnum said....
"No man ever lost money underestimating the stupidity of the American public."

 

[bbohanon]

Catching back up on this thread and alot of great perspectives and thoughts for sure..
For me, the whole price issue is not about homebrewing vs commercial brewing with pricing at all..If I was not a homebrewer at all, I KNOW 100% I still would not have even thought about spending $10 per 16oz can for ANY beer, nor more than $12-15 a bomber or $5 a pint..to me I relate it to when I stopped smoking..I did not quit because of health reasons and I was certainly not rolling my own smokes/growing my own tobacco, I quit because it just became to expensive for me personally to continue with.

I certainly understand the whole "charge what the market will bear" mentality, but as Dirty Harry said "Mans GOT to know his limitations..."

With this brewery, I have reached mine personally. Nothing against them at all as a previous CLT poster mentioned they are a great local brewery.

I also patronized this place very regularly even when they were at their old location when you could walk in on a Sat afternoon and there was hardly a crowd at all (its been a few years now since that was the case).
They are great folks and they do make great beer, but their current pricing model has priced me out of continuing to be a customer of theirs.

I see this becoming more of a trend with some of the other local breweries as well as it seems when one starts to up prices, the rest will follow. To me, I am not angry at all about it, more saddened that I want to continue to be a patron, but my spending brain just cannot justify that price point.

Their place is almost always packed with patrons so they still have plenty of customers who ARE willing to spend that kind of dough so I am sure I will not be missed.

Someone else mentioned seeing beers from out of state breweries being cheaper than local which I am also seeing in the grocery stores which to my brain is backwards, but it is what it is I reckon.

 

[Morrey]

I think it's a good thing.

SWMBO: Why did you spend $1200 the last 2 months on beer stuff, and take over half the basement?
Tom: I'm making craft beer. It sells for $10 per 16 oz can. Each of these batches is therefore worth $400. So after about 4 batches including ingredients, this equipment is paid for! Honey, do you really want me to spend $10 per can for a beer I can make myself?

Yes, but Tommy, don't you realize how many pairs of shoes I could buy with $1,200?

 

[Murphys_Law]

Actually it's the opposite. Capitalists (and politicians) prey on the uninformed.

Remember what P.T.Barnum said....
"No man ever lost money underestimating the stupidity of the American public."

No, a capitalist exchanges their product for another persons money based on (perceived) value. There is no coercion or preying taking place.

You may not see value and wont pay but your experience doesn't make it wrong for somebody who does see value to pay. If enough people stop seeing value in the product then the brew pub will lower the price or go out of business.

A typical home brewer can make a beer for far less than they can buy a beer so our "value" is a lot different than most. Doesn't make the brew pub bad - it just makes them smart businessmen who market to a crowd that isn't bitching about them making a living.

I don't care if they sell $30 pints, get huge and sell to InBev for $1B.

 

[DoomRider]

Also from Charlotte. The brewery that the OP is talking about just moved into a beautiful new facility and I believe that is why they are charging a tad more. Their flagships are still the same price. That $10 can is definitely an one off for them. They brew great beer (top 3 in Charlotte).

I don't really see other Charlotte breweries "following suit" though. Prices seem about normal in Charlotte as I have seen elsewhere (Ashville NC, Raleigh NC, Charleston SC, Columbus OH).

I think as home brewers we see the price differently than a person off the street. We know how much the grain, hops, yeast cost and think it is crazy they are charging $5-7 for a pint. Cause we know that if we drink 3-4 pints that we could have paid about the same amount to make a whole batch.

Just my $0.02.

 

[Morrey]

Looking at craft beer vs home brewing may be likened to my neighbor baking cakes in her home to sell. She makes cakes that rival the very best bakeries in town. She charges half the going rate and can do so since she doesn't consider her mortgage, taxes, utilities, insurance on her home as part of her operational costs. She lives there, enjoys baking cakes as a hobby she loves, and only wants to cover the cost of her ingredients with a sale of a cake.

We all love home brewing as a hobby or probably wouldn't be on this forum. I don't count my time as labor, nor do I factor in my water bill, electricity or any other household bills when I determine that it cost me $XX to brew a keg. In that regards, we are comparing apples to oranges. Maybe it does cost a top end brewery more than we think to produce excellent products once you factor in all costs, labor, transportation, distribution, etc.

It remains our choice to buy top dollar craft beers, but if we stopped buying them, would the price drop? Or would the product simply go away? If it went away, we could think the margin was tighter than we may have thought and they can't cut the price. If the price dropped, they simply readjusted their profit structure to meet supply/demand equilibrium.

But, in the micro scheme to me personally, I'll be dammed if I plan on paying $13.99 for a 4-pack of 12 oz bottles for a beer I can make at home which is every bit as good...or better, than they brew. I am blessed I can do this, but for many of the rest of the craft beer affectionados, they may not have this skill available. If they like a beer, they are held hostage by pricing schemes. I just figure out a way to clone the beer.

 

[drksky]

I'll play devil's advocate

Keep in mind, a brewery is a business. They want to make a profit and return their investment within the first few years of operation. Businesses cost a lot to run and that's reflected in the cost of the products. (Like cooking a filet at home will save around $20 a plate) I'm not stoked to pay $8+ for a 6 pack but I like having the selection to choose from. Margins are small for these guys so they have to make money somewhere.

And they're trying to reach that ROI as fast as they can because deep down they know the market is going to crash sooner than later.

 

[bbohanon]

Also from Charlotte. The brewery that the OP is talking about just moved into a beautiful new facility and I believe that is why they are charging a tad more. Their flagships are still the same price. That $10 can is definitely an one off for them. They brew great beer (top 3 in Charlotte).

I don't really see other Charlotte breweries "following suit" though. Prices seem about normal in Charlotte as I have seen elsewhere (Ashville NC, Raleigh NC, Charleston SC, Columbus OH).

I think as home brewers we see the price differently than a person off the street. We know how much the grain, hops, yeast cost and think it is crazy they are charging $5-7 for a pint. Cause we know that if we drink 3-4 pints that we could have paid about the same amount to make a whole batch.

Just my $0.02.

Ah Asheville...how I wish there was an Asheville Brewing Co type of brewery/pub here in CLT..$6 bombers (which for ninjabreadman porter is a friggin steal when its in season), great pizza and kick-ass environment (with $3 movie nights!).

These guys do it the way I would if I were going pro..

I would be a full-time resident at this place if there was a location here locally...:rockin:

 

[blackbeer]

anything north of 5 bucks a pint and i'll pass. thats one of the reasons i rarely go out to any of those places. or bars in general. or restaurants. i'm cheap. there i said it.

 

[bobeer]

Was just reminded that Cycle Brewing in St. Pete, FL sells their Monday-Friday 24oz bombers for $30 a bottle. LOL. People line up to get it too... I'll never understand that.

 

[Newsman]

Was just reminded that Cycle Brewing in St. Pete, FL sells their Monday-Friday 24oz bombers for $30 a bottle. LOL. People line up to get it too... I'll never understand that.

Because they can. SOMEONE is stupid enough to apy $30/bottle for a bomber. As the famous saying goes, "There's a sucker born every minute"

 

[Brownalemikie]

Yep craft breweries are steep in pricing their beers. I go to Marker 48 brewery in Brooksville, FL and spend $6 for a 8% brown ale then I go home and drink my HB brown.

 

[passedpawn]

Was just reminded that Cycle Brewing in St. Pete, FL sells their Monday-Friday 24oz bombers for $30 a bottle. LOL. People line up to get it too... I'll never understand that.

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

 

[madscientist451]

They are charging what the market will bear. Its simple economics 101. When demand falls and production remains the same, prices will drop. But demand isn't falling. People are willing to pay ridiculous prices for alcoholic beverages.
I don't see anything changing anytime soon.
There are many threads that have as a theme "homebrewing doesn't save any money"
But if you brew beers that are expensive to buy retail, you can save some money, if you don't factor in the value of your time.

 

[Transamguy77]

After reading some more of these posts one theme keeps coming up "that we don't want to pay for beer when we can make beer that tastes better"

Maybe that's what it is, not that the beer is over priced but that the price doesn't match the quality. I've had some beers that were just meh and some other beers that I feel ripped off that they even charged me, I feel like I should have been paid to drink it.

We all love craft beer and that's why we craft it ourselves and I think it is why we are frustrated with the quality and prices of how the market is.

 

[MaryB]

BUT going out and sampling different beers s a great way to try new styles or even the same style but from a different brewer to see what their twist is. Then take those ideas you get and apply them to your own brew sessions to see what you can create.

So paying $8 doesn't bother me in the least even if I pour it down the sink because it is nasty. I learn from it!

Well, it appears you're missing my point, which places the blame on probably me for not making it as clear as it could be.

My cost has nothing to do with their price, you're correct on that. But the difference between their price and my cost is the issue here. That's the key item in the decisionmaking.

I'm not a professional brewer so I am not bound to count my labor as somehow factoring into my cost. They do. I get it, that's patently obvious.

The key here is each of us make a decision trying to decide if the difference between our cost and their price, while factoring in the quality of what we brew, is great enough to justify the time and effort spent brewing. That decision may be different for everyone, and that's fine.




You're arguing something nobody is disputing. Yes, commercial breweries have issues i don't have to deal with. The issue is the difference between what I pay to brew (less than $1/pint) and what I have to pay to buy their stuff--which may or may not be as good.

I showed earlier that valuing your time only matters if you're brewing instead of doing something else that would make money. If, in not brewing, you aren't spending that time earning money in some other capacity, then the value of that time is zero. Ergo, my "business model" is cheaper than theirs. Has to be. And that's why I don't buy beer commercially except when I'm out.

 

[MaryB]

Instead of cloning someone's work I look at a style then think about what "I" like in it then make my own version that is a new recipe. Sure some have been so-so flops, some have been hits. That is my streak of creativity slipping in to make something BETTER is I can!

Looking at craft beer vs home brewing may be likened to my neighbor baking cakes in her home to sell. She makes cakes that rival the very best bakeries in town. She charges half the going rate and can do so since she doesn't consider her mortgage, taxes, utilities, insurance on her home as part of her operational costs. She lives there, enjoys baking cakes as a hobby she loves, and only wants to cover the cost of her ingredients with a sale of a cake.

We all love home brewing as a hobby or probably wouldn't be on this forum. I don't count my time as labor, nor do I factor in my water bill, electricity or any other household bills when I determine that it cost me $XX to brew a keg. In that regards, we are comparing apples to oranges. Maybe it does cost a top end brewery more than we think to produce excellent products once you factor in all costs, labor, transportation, distribution, etc.

It remains our choice to buy top dollar craft beers, but if we stopped buying them, would the price drop? Or would the product simply go away? If it went away, we could think the margin was tighter than we may have thought and they can't cut the price. If the price dropped, they simply readjusted their profit structure to meet supply/demand equilibrium.

But, in the micro scheme to me personally, I'll be dammed if I plan on paying $13.99 for a 4-pack of 12 oz bottles for a beer I can make at home which is every bit as good...or better, than they brew. I am blessed I can do this, but for many of the rest of the craft beer affectionados, they may not have this skill available. If they like a beer, they are held hostage by pricing schemes. I just figure out a way to clone the beer.

 

[jmcquesten]

I think a lot of these places know that their beer isn't good enough to attract repeat customers, so they try to get as much out of people on what could be their only visit to the brewery. I've tried many of my local breweries' offerings...ONCE. For me, that was enough for most of them. Maybe they see some of the really good beers and just assume they can charge what those good breweries are charging, not realizing that they aren't in the same league. It seems like anyone that finds some investors and turns this hobby into a business thinks they are the next (insert well known brewery i.e. RUSSIAN RIVER, ALCHEMIST, JESTER KING, etc.) big thing, when really they're just trying to sell mediocre "homebrew".

I'm sure they'll figure out as the fads shift and people start to realize that each one of these breweries are doing pretty much the same thing. When I go into a place and they have the "typical" beer selection (blonde ale, pale ale, ipa, overly hopped wheat beer, maybe a double ipa, and a stout), my expectations go down. I know they want to have a variety, but when every brewery in the area is selling the same selection, it's not really variety and it's harder to make yours stand out.

 

[b-boy]

I think you know you're in for a bad time when you walk into a prewpub and they have:

• 1 IPA
• 1 Pale Ale
• 1 Amber
• 1 Stout

When I see this list, it usually means I'm in for some mediocre beer. They don't have a brewer with the skills or interest to take a few chances, so they offer the 'basic' beer list. There's a place like this in Buffalo. Their beer menu never changes. They have 1-2 OK offerings, but everything else is just meh. I always get the same thing when I go there because it's 'safe'.