When did craft beer prices “jump the shark”

[McMullan]

Have you ever lived in a city? Many places where $9/pint (both at a grocery store and at a bar) for heavily-hopped stuff isn't uncommon.

I pay £4-5 a pint for commercial craft beers down the craft bars back home, in the UK. If I'm sat at home I expect to be paying £2-3. Otherwise I'm not buying it. Marketing has very little effect on me.

 

[bracconiere]

A lot (most?) of people commenting in this thread have very little idea of the overall costs, and market demand too apparently.

And really thought home brewers would be a little more open minded...

whatever lube works for you...lidocaine, benzocaine...i can make both if you really want me to.....

edit: but let's face it your at least half way an adult, and realize they got into it dreaming of lambo's and mansions, and are dissapointed it's an honest job...you're going to notice, despite the pain topical analgesic....

 

[Bassman2003]

I didn't pay much attention to the style of the beer, tbh. I don't care what it's claimed to be. It was the cost that cracked me up. And I'm used to buying beer in Norway, one of the most expensive rip-off places in the world. It doesn't matter how people choose to view it, the marketing, hook, line and sinker, $9/can of beer is very far from normal and blatantly an unsustainable business strategy. However slick the marketing. What's becoming quite clear is how much the craft industry are just as devious as the big players. The fact they enjoy claiming otherwise - more slick marketing - kind of makes them a little bit worse, in my mind. In the struggle to survive in an overpopulated market they have to lie more and more to sell small volumes of reinvented beer.

Totally agree and you will not see me paying $9 for a can of beer even if the raw material pricing for the dump truck of hops used is a substantial part of the cost. The level of marketing hype in all areas is getting thick for a lot of products.

 

[bwible]

$8/pint not uncommon at restaurants
4pk pints at 3 local breweries are $14-$18
Just one western mass data point.

Yeah even the macrobrew lagers are $4-$5 at a restaurant. But it’s different to me and I don’t mind paying that if I’m up for a night out. Especially if there’s a band or other entertainment.

 

[bwible]

I pay £4-5 a pint for commercial craft beers down the craft bars back home, in the UK. If I'm sat at home I expect to be paying £2-3. Otherwise I'm not buying it. Marketing has very little effect on me.

At first I was going to say that seems like alot. But I was thinking of the other day when a pound was almost $3 US. This is one of those times when us old people say “the other day” and it could mean last month or 20 years ago.

 

[davidabcd]

Discussing beer prices at a sit down place versus a store is quite different obviously. In a restaurant, I expect pretty high alcohol prices since food has a lower profit margin and alcohol can keep a restaurant in the black. I can't begrudge them that.
That's why I'd focus only on what it costs at the store. The brewery I've gotten packs of beer from is about the same as at the grocery store.

 

[bwible]

If you own a kegerator and you’re looking at buying sixtel kegs, you can definitely save money brewing that yourself.

Total Wine sixtel kegs at the store near me:

Landshark - $67.99
Blue Moon - $75.99
Fat Tire - $85.99
Dogfish Head 60 min - $99.99
Sam Adams Boston Lager - $89.99
Troegs Perpetual IPA - $93.99
Victory Hop Devil - $93.99
Devil’s Backbone Vienna Lager - $84.99
Magic Hat #9 - $79.99
Oskar Blues Dale’s Pale Ale - $85.99

Anybody think they can’t fill a 5 gallon keg for less than that?

Still, since a sixtel is about 50 beers, it works out to about $1.35 per beer at the cheapest for Landshark to $1.99 per beer at the most for Dogfish Head 60 min. I’m just pretty sure we can do better.

 

[brewswithshoes]

$8/pint not uncommon at restaurants
4pk pints at 3 local breweries are $14-$18
Just one western mass data point.

This was more the reference I was making in original post.

I’ve paid $9 for a beer at a restaurant and even at a bar before. It’s just that $9 a can, or actually $36 for a 4 pack from where I go to buy my beer for around the house drinking seems way out of whack.

Should also point out I didn’t buy it, but I did stare at in disbelief for about 4 minutes before snapping the pics.

I don’t want to sound like this original post was insulting anybody, I get that folks like what they are gonna like. And if you like these beers and buy them, good for you. (Hell, I paid $14 for a donut once that was the best thing I ever tasted - so I won’t knock anybody). I just can’t see sustainable operations with this pricing scheme. But I’m no business major or brewery owner either. Good for them if they can continue to do it, I just don’t think I could ever justify that 4pk.

 

[wepeeler]

Maine Brewing company sells their individual bottles in CT for $8.99 and up. Lunch is their staple around here. A single bottle of a single IPA. Often the same price in the bar. I like the beer, but I NEVER buy it. I think they're doing just fine...

Depends on the beer style, the market and how much people really want the beer. Other Half out of NY distributes here now too. But to the tune of $25/4pk and up. That's insane. Every once in a while I'll pull the trigger, but their beer is not worth spending double what I can spend on local beer.

 

[Miraculix]

There's a huge difference between a "random" hop bomb-ish beer being sold for almost ten bucks a can and for example, a really well produced lambic or similar, going for the same price (obviously not in a can) or higher. Also these long term aged high abv beers are a different story. These beers are not mass production "1-2 weeks and out it goes to the customer" type of beers. These beers cost time and time is money.

But if somebody is trying to sell me an apa or ipa or hazy whatever neipa-thingy strawberry infused milkshake and whatnot added "beer" I call it a very fancy ripoff, because this is what it actually is. Feel free to tell yourself that you can justify buying it because of "diversity" (what an overstretched term these days anyway) but it doesn't change the fact that this is a ripoff.

 

[deeve007]

lets assume these guys are getting crappy pricing right now like everyone who's not a major"micro" brewery.

$20/lb for hops, 5lbs per barrel, $100/bbl in hops which is roughly 40c per beer
call it 25c per can for malts and yeast and whatnot
call it a buck a can for 16oz prints (inflation, supply chain issues)
call it another buck a can for mobile canning service. (might be high, rates vary by locale)

so $2.75/pint in "cost", sell to distributor for $5.5
they add about a third, so now its $7.15.
retailer marks it to 9.

thats how you end up paying 8-9 bucks a can for the privilege of drinking rotten fruit with extra hop burn.

This prior post from @SanPancho worth reposting, for those who still believe a $9 can cost is only marketing.
(and I think his retailer markup was on the conservative side)

And if you're genuinely curious, in my experience most small breweries are more than happy to chat about their costs of production to clarify why their beers cost what they do (to those who come across as genuinely curious anyway). It's how I got some idea even before we started our brewery plans (hopefully opening soon!!)

But if somebody is trying to sell me an apa or ipa or hazy whatever neipa-thingy strawberry infused milkshake and whatnot added "beer" I call it a very fancy ripoff, because this is what it actually is. Feel free to tell yourself that you can justify buying it because of "diversity" (what an overstretched term these days anyway) but it doesn't change the fact that this is a ripoff.

But that's because YOU don't value that style of beer. The cost of production is still high, the cost of many of those adjuncts can be significant, as can the extra labor & time required to produce. That's simply a fact, whatever any individual's subjective view of the beer taste and/or style is.

For all higher priced beers? Not at all, but for a lot of them, yes.

 

[Miraculix]

This prior post from @SanPancho worth reposting, for those who still believe a $9 can cost is only marketing.

And if you're genuinely curious, in my experience most small breweries are more than happy to chat about their costs of production to clarify why their beers cost what they do. It's how I got some idea even before we started our brewery plans (hopefully opening soon!!)



But that's because YOU don't value that style of beer. The cost of production is still high, the cost of many of those adjuncts can be significant, as can the extra labor & time required to produce. That's simply a fact, whatever any individual's subjective view of the beer taste and/or style is.

For all higher priced beers? Not at all, but for a lot of them, yes.

It's not about me valuing something. It's about business plans. If you got a beer with a normal turnaround time and you need to sell it for 9 bucks to make it profitable, then your business plan just sucks.

It's as simple as that.

As long as people are willing to pay for it, it will continue. No problem, that's capitalism and good marketing. Even a higher price than average can be good marketing, no fault in that. But justified by production costs? No way, if thought through.

There are countries with ridiculous taxes on alcoholic beverages, let's just leave these out of the discussion. If a Beck's costs ten bucks in Norway, that's a different story.

 

[deeve007]

It's not about me valuing something. It's about business plans. If you got a beer with a normal turnaround time and you need to sell it for 9 bucks to make it profitable, then your business plan just sucks.

It's as simple as that.

And yet many breweries are doing very well doing that, due to the market demanding those kinds of beers.

What should a business do, ignore what the market wants and only brew the cheapest beer possible? To me that would make for a ****** business plan.

I get it, you and many in this thread don't like that type of beer, that's fine. But the facts are those types of beer are in great demand at present, and have been for a while now. It would be ridiculous for anyone producing beer to ignore that demand if they want to stay in business (unless of course their business is mass priduction of the cheapest beer possible, aka the big boys).

But as I wrote, go chat to a small beer producer and get the info from the horse's mouth rather than painting the entire segment in a broad brush, it's a super interesting business segment for mine, always changing and always challenging.

 

[Miraculix]

And yet many breweries are doing very well doing that, due to the market demanding those kinds of beers.

What should a business do, ignore what the market wants and only brew the cheapest beer possible? To me that would make for a ****** business plan.

I get it, you and many in this thread don't like that type of beer, that's fine. But the facts are those types of beer are in great demand at present, and have been for a while now. It would be ridiculous for anyone producing beer to ignore that demand if they want to stay in business (unless of course their business is mass priduction of the cheapest beer possible, aka the big boys).

But as I wrote, go chat to a small beer producer and get the info from the horse's mouth rather than painting the entire segment in a broad brush, it's a super interesting business segment for mine, always changing and always challenging.

Nope, a good Business Plan includes lowering the production costs to the minimum.

This did not happen with a ten buck normal turn around beer.

Please stop saying that I "just don't like these type of beers". I also don't like most high abv beers, but yet I see that there is some value behind the production that needs to be paid for.


These 9 dollar, two weeks production beers are nothing but a ripoff or very badly planned business. Choose the one you feel better with.

 

[Miraculix]

Actually, it's a brilliant business plan as people seem to buy it and even publicly defend it on a public forum without getting anything for it. Kudos to the brewery.

 

[deeve007]

As I wrote, why not go chat with a few actually running breweries and get some insights about the FACTS involved in production costs and challenges, rather than repeating your OPINION that this beer style isn't worth the money to you? All I can convey is what I have learned from a number of them in a few different countries, and from our own early estimates of production costs. Our more limited release "creative" beers won't be for making a larger profit, but simply because the market is demanding them. It would be amiss of us from a business perspective to ignore that as a small brewery looking to gain a foothold in the market.

 

[AlexKay]

Via-a-vis production costs on hop bombs, if you’re actually trying to get the customer a top-quality product, the need for these beers to be fresh — more so than most other styles — is probably a significant expense. I’m not in the business, so I’m guessing here, but a reasonable approach would be (1) refrigeration throughout the distribution chain;
and (2) strict enforcement of a best-by date, pulling old product from the shelves and disposing of it. Neither of these will come cheap.

Is We Make Beerz Brewery actually doing this for their latest hazy wonder? Probably not. Is Russian River (as noted before, I’d happily pay $9/bottle for Pliny) or other well-regarded IPA breweries doing this? I don’t know, but I wouldn’t be surprised.

(Whether it’s the brewer, distributor, or retailer trying to deliver a fresh product is moot; someone is going to have to bear those costs.)

Now, if a brewery you’ve never heard of is charging an arm and a leg for a can of their IPA … well, maybe you’ve got the next Russian River in your backyard, and maybe they’re trying to take you for a quick nine bucks.

 

[madscientist451]

The fact of the matter is, in the world of beer, $9/can beers are very very rare. The assumption it's somehow normal is complete nonsense. Please fact-check it. And stop cherry picking to prop-up rediculous claims. Note too if you pay more than $9 for a pint it's actually the venue you're paying for

Yeah, I agree, checking a beer distributor here in PA I found plenty of 4 packs with beer in the $4.50/$6 per can range (which is still pretty ridiculous IMO) maybe some at $7.50/can, but that's about the top end.
http://kundabev.com/stocklist

 

[seatazzz]

The above discussion notwithstanding, I would bypass that $36/4 pack with a scoff and a hrumph. Yes, it may be the best beer that's ever passed my taste buds; but I ain't paying that. If a brewery is going to spend the $$ to brew enough to can and distribute something that costs that much to produce, they are banking on the presumption that someone out there will buy it at that price, just to prove they can. Beers with that much expensive hops belong in the brewpub/taproom where they can be served super-fresh. I've bought a few high-priced beers in cans at my local shop, and to my (possibly slightly uneducated palate) they hardly ever "wow" me as does a freshly pulled pint. Almost always slightly oxidized, and nothing to write home about. In my (again, slightly biased) opinion, those overpriced 4-packs are aimed at your garden-variety beer snob who has to have the hoppiest, dankest, most overpriced beer in his untappd app to wow his friends. The marketing geniuses behind these overpriced hop bombs know someone is gonna buy them, if only to say they did.

 

[madscientist451]

As I wrote, why not go chat with a few actually running breweries and get some insights about the FACTS involved in production costs and challenges, rather than repeating your OPINION that this beer style isn't worth the money to you?

Production costs are not relevant to the value of "worth" to a consumer. The person who actually takes the money from their pocket and buys something determines what it is worth, not anyone else. Put something valuable on Ebay, you might be surprised what people are willing to pay. Of course, consumers can be influenced by advertising and other factors which in turn changes perception of overall value or lack of value of a product.

 

[Broken Crow]

Of course, consumers can be influenced by advertising and other factors which in turn changes perception of overall value or lack of value of a product.

Beta was vastly superior to VHS. 'CD-Quality' is an oxy-moron. Compressed music sounds like sh*t. McDonald's...
yet $$$.

 

[deeve007]

Production costs are not relevant to the value of "worth" to a consumer. The person who actually takes the money from their pocket and buys something determines what it is worth, not anyone else. Put something valuable on Ebay, you might be surprised what people are willing to pay. Of course, consumers can be influenced by advertising and other factors which in turn changes perception of overall value or lack of value of a product.

No debate. My comment was more that a $9+ can of beer retail price is ONLY due to marketing, when those that do have insights into production & distribution costs know this is not the case.

The marketing aspect comes into play for whether a brewery can charge $7-9 for that can, or $15. The Bruery, for example, make some incredible higher end beers of all types (along with a cheaper core range, like most), their beers are exported around the world and usually sold out very quickly where available. With the name they have in the market nowadays (they've been around since 2008) no debate their profit margins are probably a bit higher than the new brewery just starting out.

 

[El Whedo]

I bought a 4pac of Santa Fe 7k IPA (pint cans) at the market yesterday for 9$. It tastes good.

 

[lumpher]

Production costs are not relevant to the value of "worth" to a consumer. The person who actually takes the money from their pocket and buys something determines what it is worth, not anyone else. Put something valuable on Ebay, you might be surprised what people are willing to pay. Of course, consumers can be influenced by advertising and other factors which in turn changes perception of overall value or lack of value of a product.

HEAR, HEAR!!! I can verify this is true, as think I saw this 30 years in a freshman Marketing textbook. Maybe not the reference to eBay. Maybe it was an internet trading site...

 

[Miraculix]

As I wrote, why not go chat with a few actually running breweries and get some insights about the FACTS involved in production costs and challenges, rather than repeating your OPINION that this beer style isn't worth the money to you? All I can convey is what I have learned from a number of them in a few different countries, and from our own early estimates of production costs. Our more limited release "creative" beers won't be for making a larger profit, but simply because the market is demanding them. It would be amiss of us from a business perspective to ignore that as a small brewery looking to gain a foothold in the market.

My girlfriend's father actually owns a brewery. Not a micro one. He does all the fancy shmancy hipster pleasing neipa milkshake whatnots, and he also does long term barrel aged sours, imperials. Apart from these, obviously the core beers as well, APAs, IPAs and lagers.

Except from the high abv beers, the barrel aged and ice beers, there are no beers that are even close to 9 dollars a can. And he wins prizes with his beers so they are not cheap rubbish.

Man, if you have production costs that need a two week beer to cost 9 dollars a can to be profitable, there is something seriously wrong with your production costs!

 

[deeve007]

I do love how so many seem to know so much about everyone else's business and what must be wrong with it!

"Except from the high abv beers" - You do know that the same reason these cost more to make (more ingredients, grain in this case) is the same reason beers with lots of adjuncts, and certain premium priced adjuncts, cost more to make?

 

[McMullan]

The stripped-down mentality behind the flawed business plan without its marketing speil. Let's package beer in gold cans and charge mugs a ransom for the beer. It has very little to do with beer.

 

[Miraculix]

I do love how so many seem to know so much about everyone else's business and what must be wrong with it!

"Except from the high abv beers" - You do know that the same reason these cost more to make (more ingredients, grain in this case) is the same reason beers with lots of adjuncts, and certain premium priced adjuncts, cost more to make?

I'm sorry that I didn't make it clear enough. These high abv beers that are higher priced require special processes or extended aging time and do have higher taxes on them. For example long term barrel aging or ice beer and than barrel or whatever you can think of weired combinations, he probably did it

That brings up the price and that is understandable.

 

[deeve007]

Higher ABV comes from more grains, double the amount sometimes.
---

This might interest some, and probably the most comprehensive breakdown of costs I've seen from a brewery (though I want to do similar once we're operational). This is one of the best known independent breweries in Australia, excellent beer & multiple awards including Aussie small brewery of the year (in case anyone wants to dismiss them as not knowing how to run their business).

Original costs breakdown from 2016 when they brewed 2,000 litre batches: Craft beer prices: how much does beer cost to make? - Black Hops Brewing
Updated costs from 2020 when they're brewing 15,000 litre batches: Craft beer prices: how much does beer cost to make? 2.0 - Black Hops Brewing

This is for one of their cheaper beers (core pale ale), not a lot of hops, zero adjuncts.
2,000 litre batches is still fairly sizable, we'll be starting off with 500L tanks as many small breweries do.
The costs drop significantly with volume increases if you compare their 2016 and 2020 breakdowns.
Inversely, a brewery brewing 500L batches would have higher costs than doing 2000L batches.

2016, retail price if they were going to make any money at all for the retailer was $120 a carton (24 beers I think, though many breweries here do 16 per carton).
That's AU$5 retail for a 375ml can (~US$3.40).
That works out to around US$4.30 for a 16oz can, for a fairly stock standard (but excellent!) pale ale.

That's if buying a full case of course, what's the usual markup buying a 4-pack versus a 16 case? It's roughly 20% in Oz, which would take it up to US$5.30/can. Again, no adjuncts, not a huge amount of hops.

And in their 2020 update that estimate they probably underestimated the real costs, so probably a little more than what they've outlined.

 

[madscientist451]

My girlfriend's father actually owns a brewery.

Well, she sounds like a keeper!