1. The wait is over! Download the BeerAdvocate app on iTunes or Google Play now.
  2. Get 12 issues / year of BeerAdvocate magazine for only $9.99!

Craft Draft Pricing

Discussion in 'Beer Talk' started by otispdriftwood, Feb 6, 2013.

?

Which Craft Draft pricing structure do you favor?

Poll closed Feb 13, 2013.
  1. Same sized pours, different prices

    45.0%
  2. Different pours, same prices

    55.0%
  1. I don't have a real preference myself and I don't have inside information from any beer bars that would shed any light on which is a better way to go but I'd like to find out from BAs what they think.
     
  2. I'd rather get everything in 1oz tasters, just enough to review it and move on.
     
    yemenmocha likes this.
  3. Ranbot

    Ranbot Savant (435) Pennsylvania Nov 27, 2006

    I don't care if the size of the pours differs, as long as it's listed on the draft menu. I don't care if the price is different either as long as it's listed on the draft menu. Give me the information and I'll choose for myself if the beer/price/pour is worth purchasing. (Maybe you need a third option for different prices and different pours.)
     
  4. fields336

    fields336 Savant (315) Virginia Nov 16, 2008

    sometimes I don't want an $8, 16 oz pour of DIPA, and other times I don't want a $5 12/16 oz pour of, say, weihenstephaner, gimme the big glass!

    I prefer when all of the beers are similar in price overall

    I like when they base it on alcohol, though some bars are puzzling, i.e. Allagash white 12 oz pour on draft the other night? strange
     
    Providence likes this.
  5. tectactoe

    tectactoe Champion (760) Michigan Mar 20, 2012

    Different sized, same priced, no doubt. There's a bar by my house that sells most everything in shaker pints. I nabbed a Reds Rye for 5$. Since my girlfriend doesn't like beer that much, I ordered her a Lindeman's Framboise, figured she'd be into it. It also came in a pint glass... 10.75$ !! What the hell, man!
     
  6. ThickNStout

    ThickNStout Savant (495) Georgia Mar 8, 2011

    I'd much rather pay a little more and get a full sized pour. I drink mostly big beers and I understand they cost more. If an establishment is pouring 10oz to keep the price down, thanks but at least offer a full pint for more money. If the establishment is pouring 10oz because it's "high gravity", effing stop!! That pisses me off that so many placces try to nanny us by restricting how much "imperial" beer they serve in a glass.
     
  7. hell I would pay a premium just to get the beer in the correct glass for the style. If a bar markets themselves as a gastro pub or a craft bar, they should have more than wine glasses and pint glasses. I would take the wine glass option, but some snifters never hurt anyone right?
     
  8. One of my favorite beer bars is The Playground in Santa Ana. Every beer is a different size ranging from 4 to 16oz and they're all the same price. $5 for Firestone barrel aged beers or similar brews has been heavenly, considering similar pours are sometimes double the price at other bars in the area
     
    4kbrianb likes this.
  9. crap I totally forgot about the Playground. Doesn't hurt that they have some great friends in the culinary and craft beer industries! Such a prime spot!
     
  10. brewbetter

    brewbetter Savant (400) Nauru Jun 2, 2012

    I like to see the $/ABV to remain constant.

    If a 12oz 5% macro is $5, then I'm cool with a 12oz 10% craft being $10 or an 8oz 10% at $6.67.
     
  11. emannths

    emannths Savant (400) Massachusetts Sep 21, 2007

    Blech. I'd rather see absolute profit per pour remain the same.

    This: Price = Cost + Margin

    Not this: Price = Cost * Margin

    Apologies for sloppy use of accounting terms.
     
    cbeer88 and tehzachatak like this.
  12. This is the correct answer
     
    ESeab likes this.
  13. chocosushi

    chocosushi Savant (450) Oklahoma May 1, 2011

    As long as it's clearly indicated on the menu I really don't mind either way.
    My favorite bar in Oklahoma City is Saint's. Everything is in shaker pints other than Crispin when they have it
    & poured via a nitro system. Sure, it takes longer to get yer beer, but it's worth it to get a full pour of everything.
    They have the Irish Pub mainstays (Guiness/Harp/Smithwick's) as well as (usually) a rotating Cider tap, w/ the rest being locals.
     
  14. frazbri

    frazbri Advocate (600) Ohio Oct 29, 2003

    As long as the price and size is displayed, I'm happy.
     
    brewbetter and tinypyramids like this.
  15. Correct serving size based on style and ABV, appropriate price. All 16oz pour beers available in 8oz pours.
     
  16. You're missing the most common way to do it - different sizes at different prices.
     
    ESeab likes this.
  17. BKBassist

    BKBassist Savant (470) New York Jan 24, 2013

    I'm in the "as long as it's marked on the menu\board it's cool" camp. That being said, there are definitely styles that I glassware\pour size matters more on. I wouldn't want the previously mentioned pint of Framboise.
    A place by me has a great set up where you can get a small or a large, usually $3-4 or $6-7 respectively. They use style appropriate glassware as well. It's a nice option to have.
     
  18. As someone that runs a bar I will explain what I do.....
    1st your margins are not the same for every beer. Cost = price of keg / # of ounces in keg this gives you cost per ounce and then multiply by the size of the glass to get cost per glass. ex. $160 for a 1/2bbl of Bells 2 hearted is $1.29 for a pint glass. $150 for a 1/6bbl of DFH Palo Santo is $3.40 for a pint glass. But here is where alcohol is involved, you don't want to serve Palo in a pint glass at 12%. One, it's irresponsible as a bar owner, and two, your guests won't drink as many. So we serve Palo in 10oz pilsners at a cost of $2.27 to us. So I sell 2 hearted at $4.50 a pint and Palo at $6.50 a 10oz. That translates to a margin of 71% for Bells and 65% for DFH. So you can't sell beer based on margins alone or you'd be selling some beers at a ridiculous price. I have to look at the $$$$ per ring that I generate in order to price beer. Yes I am making $4.23 on the Palo vs. $3.21 on the Bells, but it sits longer than the Bells because you can't drink a lot of it. And back to alcohol, wine is served in 6oz pours at 11-13%abv, so getting 10oz of Palo is a good deal! But this is all on craft beer, move over to Miller Lite and your margins are less because you sell it for less, mine is 60%! Lastly if I get a special keg in, ie KBS, I will sell it for more just because it is a once a year beer and very few kegs come into the state. Capitalism baby!
     
  19. Why does it matter how long it sits for, so long as it doesn't "go bad"? You've already factored your cost and the ABV into the equation, so there's no real reason why you should make $1 more profit on the Palo. Putting aside the entire capitalism argument for a minute, it sounds like the 10oz pour of Palo should be going for $5.50.
     
  20. Nectar

    Nectar Savant (310) New Jersey Jan 17, 2013

    I have a craft beer bar/wine bar across the street from work I go to maybe twice a week. Prices and pours vary slightly. They usually give me a 16oz pour for the price of 12 as well as some other regulars.

    Just had a $4 16oz pour FBS :)
     
  21. teal

    teal Aficionado (195) Wisconsin May 3, 2012

    My place is different sizes, different prices for the most part. Except happy hour. Then all taps are 4 bucks a pour and there's not a single BMC on tap - all craft.

    The only pour that isn't a full honest pint that I can think of is Choklat but I don't know anyone who can drink the full 16 oz of that sucker.
     
  22. You can't look at it as a "$1 more profit". Take the whole kegs into the equation and it looks like this.....
    Normally you can get 115 pints out of a 1/2bbl and 60 10 oz out of a 1/6bbl (with waste). So the Bells yields $357 profit and the DFH yields $240 on my pricing. If I drop the Palo to $5.50 it would yield only $180 profit which is only a little bit more than 50%. So if you look at the end profit why would I even bother putting on Palo? But remember profit is relative, I still have labor, rent, utilities, supplies, keg deposits, line cleaning, card fees, taxes etc. to cover with this profit. People that aren't in the biz don't realize that overall restaurant margins are in the 7-10% range at the end. That sucks compared to say a tech company, clothing store, hardware or other retailer that might earn 20-25%!
     
  23. Yeah, I hear what you're saying, but I don't think your math really works out.

    If you have already adjusted the beer for pour size and ABV, and price it accordingly, then all you should care about is your "per serving" profit, not your percent margin on a keg. A smaller percent margin on a more expensive keg can still be more net money.

    For example, let's say I go into your bar to drink 4 glasses. With an efficiently priced lineup, you shouldn't care what I choose for those 4 glasses. Be it 4 Bells and 0 Palo, 3 Palo and 1 Bells, or whatever combo. All you should care about is the beer sells before it goes bad.

    I get that your overall margins are tiny once you factor in overhead, I'm really just trying to understand. Poor pricing models area a major issue in the Boston area, where most places just markup a fixed %, which leads to really wonky pricing.
     
  24. emannths

    emannths Savant (400) Massachusetts Sep 21, 2007

    Except that those costs don't vary based on the cost of your beer. The "cost" of the more expensive keg is just the opportunity cost of the dollars you used to purchase it. If your margins are on the order of 10%, that means the effective cost difference in those two kegs is only 10% of the cost difference.

    I actually think that bar owners are missing an opportunity: take advantage of the fact that you can still make a lot of money by selling expensive beer at reasonable prices. Skip the SNPA taps and throw a bunch of $7 pints of Palo-equivalents up there. If you sell the same amount your profit will be the same, and more than likely you'll have beer geeks lining up outside your door to take advantage of your market-beating prices allowing you to sell more and make more profit.
     
  25. beertunes

    beertunes Poobah (1,035) Washington Sep 24, 2007

    The slow mover also gets a higher price because the owners money is tied up in that keg. The bar has paid for the beer (inventory) and also has the keg deposit tied up. A bar with, say 20, taps and 1 back up for each, thats 40 kegs x $50 per = $2,000 just tied up in deposits.
     
    fredmugs likes this.
  26. A really simple way to figure the price a bar should charge is to take the cost of a keg.Well make it easy and say Yuengling is $100 for a 1/2 BBl. You then multiply that number by 400% to determine the total revenue you expect that keg to generate. So $100x400%=$400. You then take this number divide it by the number of ounces in the keg (1984 in this case) and you get what you need to charge per ounce. So $400/1984 ounces = $0.20 an ounce. Now when you want to generate prices just multiply the size by the cost per ounce. Ie 64oz=12.75 16oz=$3.25 10oz=$2.00. If you follow this structure you can ensure a good margin for your establishment and an equal pricing to your customer.
     
  27. wyatt

    wyatt Savant (290) Louisiana Nov 18, 2009

    You guys do not seem to understand how business work. It is not as cut and dry as you would expect.
     
  28. You need more choices in your poll.
     
  29. Flat pricing across the board would be great but I don't think this happens too often.
     
  30. Same price, different sized pours for me. I don't need an Imperial Pint of some crazy DIPA. Give me a 12oz tulip and call it good. I love when bars have 8 or 10 oz pour options as well. Get to try more without being totally sloshed. This is why I love The Horse Brass!
     
  31. cubbyswans

    cubbyswans Savant (365) Missouri Jun 10, 2008

    Who gives a shit. I don't care how business works. I am the consumer. All I care about is whether or not I wish to pay xxx for xxx. If I deem it not worth the price, I'm not going to buy it. It makes ZERO difference what the business reasoning is for that price.
     
    StArnoldFan likes this.
  32. DougC123

    DougC123 Savant (290) Connecticut Aug 21, 2012

    I'm guessing the same Cubby from micromatic's site? I'm djc there.

    In any event, I agree with you but I care about the business side of it because I want places I go to to still be there, so I always hope the owners understand what they are doing and set prices accordingly. There are plenty of people who go into business doing something they love only to fail because they don't have a good grasp of the biz side of margins, overhead, and pricing. Of course there are places that I don't like and I don't extend the same amount of thought to their well being.
     
  33. TheBeerBoutique explained it perfectly. Pretty much exactly what we do.
     
  34. rlcoffey

    rlcoffey Savant (490) Kentucky Apr 20, 2004

    Im fine with differently sized, differently prices, when its clear what is going on.
     
  35. rlcoffey

    rlcoffey Savant (490) Kentucky Apr 20, 2004

    The reason margin matters is time value of money.

    The bar pays in advance, so that is money that cant be used for something else while the beer isnt sold. If say, profit per serving was the same, then there is no good reason to buy the more expensive kegs, assuming they sell at same rate. Standard margin percentage is therefore much more common (although there can be a slight adjustment for fixed costs and stuff, but still, margin percent is the best way to go).
     
  36. maltmaster420

    maltmaster420 Savant (450) Oregon Aug 17, 2005

    No offense, but keeping our jobs and liquor licenses is more important than giving you a "full size pour" of high gravity beer. A 175lb person who consumes a pint of 10% beer in an hour will be sitting at roughly .06 BAC, but probably won't feel or display the effects right away. Drinking a second one within 2 hours will put you over .1, which is over the legal limit. You may have a high tolerance and not "feel drunk", but if you hit something on the way home and fail a breathalyzer you're screwed, and then they come after the establishment for overserving you, and we get screwed as well.
     
  37. emannths

    emannths Savant (400) Massachusetts Sep 21, 2007

    What's the time value of money for a bar, 10% APY? That's nothing! It doesn't come close to explaining why a bar needs to make 50% more profit ($/$) on a more expensive/slower moving keg.

    The real reason is that it give bars a way to use price discrimination. Any other explanation is either "because that's how we've always done it" or it's bs.
     
  38. gpcollen1

    gpcollen1 Savant (415) Connecticut Jul 16, 2005

    If you are paying the same price per ounce, what does it matter if you get 2 10oz pours or 1 20oz pour? I believe it to be borderline irresponsible to pour say TenFiddy in a pint glass. We are currently pouring it in an 8.5 ounce glass. A 16 ounce glass would be around double the price...so what's the difference to you??
     
  39. Well, two things. For one, your benefit to more expensive kegs is attracting patrons with the more exotic beer. For two, the more expensive stuff also usually comes in smaller vessels, so the gross money tied up in a sixtel of a DIPA vs a half barrel of a local Pale Ale is going to be about the same. (and maybe even less) Thus that very argument can work against you - that the more expensive per volume sixtel might have faster turnover and/or lower gross costs than the half barrel.

    I just don't think margin percents "work" anymore with the ever increasing costs of high-end craft beer. I mean, they work in the sense that they will make a bar more money, but they will also lead to an increasingly poor value price for the consumer compared to drinking beer at home.
     
  40. gpcollen1

    gpcollen1 Savant (415) Connecticut Jul 16, 2005

    I don't use a different profit margin on certain kegs over others unless there was additional cost. A cellared keg has actually cost more in refrigeration and storage and $$.
     

Share This Page