What's the deal with faux craft prices?

Discussion in 'Beer Talk' started by DarkDragon999, Jul 10, 2013.

  1. Why are beers like the Blue Moon line and Leinikeugel's Summer Shandy priced higher than the standard MillerCoors products ? Is it because they use better ingredients or is it because they are trying to fool people into thinking its better because its more expensive? I saw a 12 pack of Leinikeugel's Summer Shandy for 14.99 and I was like wtf this "beer" is made with artificial lemon flavors, it shouldnt be costing that much. Not to mention stores that charge 9 bucks a sixer for frigging Blue Moon.
     
  2. Hanzo

    Hanzo Champion (955) Virginia Feb 27, 2012

    If you want to imitate craft you have to imitate the price also or people will quickly catch on.
     
    jcb7472, YogiBeer, LaneMeyer and 8 others like this.
  3. a lot of people don't know any better so they take advantage of that stupidity
     
  4. You answered your own question IMO.
     
  5. I'm gonna go ahead and guess that becuase 99.5%+ of the beer drinking world (you know, the people that aren't on BA or Rate Beer all day while they should be being productive at work) actually view these brands as "craft." And that is exactly what their producers are going for. They are trying to position Blue Moon and Leinikeugel's in the same category as other, truly craft offerings. Part of that, is pricing them as such.

    That's my guess. Also, while Blue Moon may not fit the definition of "craft", whatever that is, it certainly is more cost intensive to create than miller lite.
     
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  6. Economy of scale would have something to do with it too, I imagine...
     
  7. Yeah its been really hot here the past week so I figured what the hey, how about some Leinikeugel's Summer Shandy. I figured it would be pretty cheap because its made with artifical lemon flavor and not real lemon and its a macro owned by MillerCoors and when I saw how much it costs I was shocked. Guess I was just naive.
     
  8. I used to use their price points to promote other, better products. Still charge the same price for sixers of Blue Moon or Paulaner Hefe. It definitely helps convince more people to try better beers.
     
  9. leedorham

    leedorham Champion (835) Washington Apr 27, 2006

    What does the artificial flavor have to do with it? Lemons are practically free on the scale that a brewery like leinerkrugels would use them, so I'm sure the decision to go with artificial flavor has more to do with controlling flavor and stability than price of ingredients.
     
    Ranbot likes this.
  10. LeRose

    LeRose Advocate (605) Massachusetts Nov 24, 2011

    Good call on that one - stability, consistency, ease of handling is why we use some at my place of employment. And sometimes because we are looking for one very specific flavor compound to intensify or suppress certain aspects of a flavor profile. And a few drops go a really, really long way.
     
  11. Crusader

    Crusader Savant (345) Sweden Feb 4, 2011

  12. Ranbot

    Ranbot Advocate (510) Pennsylvania Nov 27, 2006

    At my local Wegman's store they have Blue Moon sitting in the cooler next Walt Wit by Philadelphia Brewing Co., a similar style beer, made locally, and sold for the exact same price... but most people grab Blue Moon *face palm*
     
    Roguer likes this.
  13. Not what the label says:

    [​IMG]

    Also, a macro brewery's ingredient costs typically make up 5-10% of the beer's retail price. Pricing is determined more by what beer market segment the brewer wants to sell the brand in and what that segment's pricing is.
     

  14. Consistency between real lemon flavor varies from one case to another, from one batch to another, and as leedorham pointed out, Leinenkugel would go through a crapload of lemon (if they used real lemon). Whatever specific artificial lemon flavor they use is going to taste the same every time, therefore you take all the science out of, let's say, brewing one batch with sweeter lemons and another batch with more tart lemons (kinda like AAUs with different batches of the same hop variety). i.e.- It's much easier to make the same beer every time with very little effort.

    As for the price, I'm sure it costs more to brew than Miller Lite, but probably not so much more as to justify $15 for a twelver!!
     
  15. utopiajane

    utopiajane Champion (860) New York Jun 11, 2013

    I would think that whole lemons are no bargain if you are trying to make a cheap drink. They have to be squeezed, they have to be sweetened and then water added. If they were using artificial lemon flavor - I think that would be much easier and cheaper.
     
  16. Everyone knows that price effects quality. It's a 100% direct correlation!
     
  17. rlcoffey

    rlcoffey Savant (490) Kentucky Apr 20, 2004

    "Natural Lemonade Flavor" is a lot like "Cheese Product".

    I think its a semantic issue. It isnt made with lemons, so some consider that artificial.
     
  18. cubbyswans

    cubbyswans Savant (370) Missouri Jun 10, 2008

    This is pretty common. Look at AB-Inbev. Natty Light is a hell of a lot cheaper than Bud Light. It's not cheaper to produce and it's practically the same beer. Premium prices give people the perception of a premium beer. It's not all B.S. it's marketing 101. It may not fool YOU, but obviously it works otherwise the products at premium prices wouldn't sell.
     
  19. It makes no difference to me, I would buy neither.
     
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  20. rlcoffey

    rlcoffey Savant (490) Kentucky Apr 20, 2004

  21. Crusader

    Crusader Savant (345) Sweden Feb 4, 2011

    Basically they see an opportunity to sell beers which are priced at an "above premium" price point, which gets them better margins than their premium lights or economy brands, which in turn is good for their revenue. In their investor presentations over the last few years they've made it clear that they will focus on the above premium segments since that's where most of the opportunity lies for better margins and profits (with premium lights and economy brands facing headwinds). Hence tenth and blake, hence Blue moon, hence Batch 19, hence Leinenkugel shandies.
     
    YogiBeer likes this.

  22. Good points. Even as a relatively new chap here, I've come to appreciate your comments greatly.
    My guess is that their "natural lemonade" contains some artificial ingredients? Comparing it to various foods, natural can cover all manner of sins.
     
  23. emannths

    emannths Savant (425) Massachusetts Sep 21, 2007

    If it contained "artificial ingredients" it would be "artificial flavor." "Natural flavor" is derived from natural sources, and is defined by the feds thusly:
    Basically, if you can extract/cook/squeeze it out of a plant or animal, it's a natural flavor. If you have to do chemistry to make it, it's artificial.
     
    jesskidden likes this.
  24. Semantically, and according to the FDA: "artificial" ≠ "natural"

    Most flavors labeled "natural" are made from the fruit they are name for - they are then processed (concentrated, sweetened, etc.) for ease of use by the manufacturer of the final product.
     
  25. rlcoffey

    rlcoffey Savant (490) Kentucky Apr 20, 2004

    In other words, not actual lemons.
     
  26. rlcoffey

    rlcoffey Savant (490) Kentucky Apr 20, 2004

    I understand. But Im not a big fan of government definitions myself.

    Lots of pro-organic food folk (for example) arent happy with the government definition of that word either.

    Even when the government isnt involved, you have differences over terms like kosher, some certifying bodies are more strict than others.
     
    Bones10 likes this.
  27. Crusader

    Crusader Savant (345) Sweden Feb 4, 2011

    And the same exact product can be moved down the price ladder if it starts losing sales, at first perhaps as an attempt at stabilizing sales but eventually the company realizes that the brand wont be able to recover its previous image and maintains the lower price point thereafter. Cost cutting might ensue of course (maybe the marketing is cut to save money, or there are changes to the actual product) but one might find that the product you paid premium prices for yesterday now is priced as a budget brand with no discernible difference in taste. The consumer's perception of brand value and desirability impacts pricing power and allows for larger or smaller margins to be extracted.
     
  28. emannths

    emannths Savant (425) Massachusetts Sep 21, 2007

    It probably uses actual lemons, or at least citrus, at some point. Flavor scientists are a crafty bunch, but I bet they get their lemon flavor from lemons.
     
    jesskidden likes this.
  29. leedorham

    leedorham Champion (835) Washington Apr 27, 2006

    and what's the deal with Ovaltine?
     

  30. Word to Mikkeler, Hoppin Frog and Evil Twin, among others.......
     
  31. rlcoffey

    rlcoffey Savant (490) Kentucky Apr 20, 2004

    Replying to both of you, I refer to my example I alluded to above.

    Kraft singles say "no artificial flavors" on the package (I just checked), its made from many of the same components as cheese, but it aint cheese.
     
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  32. Crusader

    Crusader Savant (345) Sweden Feb 4, 2011

    SABMiller is interesting since they regularly publish lenghty presentations on their business activities and strategies, I find these glimpses into the business of big beer quite fascinating.
     
    l1fted likes this.

  33. Gotcha. So a processed product (e.g. lemonade) has to be made from natural flavors in order to bill itself as "natural"? I'm familiar with the artificial vs natural in the first phase, but does it necessarily have to follow through the whole way? Could this "natural lemonade flavor" contain a infinitesimal amount of lemon extract (which is then enhanced through additives) and still be considered natural?
     
  34. LeRose

    LeRose Advocate (605) Massachusetts Nov 24, 2011

    It's more than a semantic issue, although some of it is semantic and interpretation. At least in the fruit juice and fruit industry, there's rules about labeling flavors and I vaguely recall a whole bunch of categories depending on how they are derived. I do get some exposure to this stuff with my work, but it is not my area of expertise. Here is a link without diving into the Code of Federal Regulations CFR21:

    http://www.scientificamerican.com/article.cfm?id=what-is-the-difference-be-2002-07-29

    Obviously reading this there's a ton of processing that can be done and still allow something to be called a natural flavor. The distinction seems to be the source. So a "natural lemonade flavor" would have to be extracted/obtained or derived from lemons as the original source rather than synthesized from chemical constituents. No big difference in the final product chemically speaking between the natural and synthesized flavor. The difference is in the starting materials.

    I remember someone posting on this topic before who was a flavor chemist or something - maybe they'll chime in again. But we're getting off the point of the OP - hope he or she doesn't mind the mini-hijack here...

    Edit: was beaten to the punch here, but that's cool. :cool:
     
    domnalbrecc likes this.
  35. These ingredients are highly processed, but that doesn't mean they're not natural. Would you call whole wheat flour unnatural?
     
  36. emannths

    emannths Savant (425) Massachusetts Sep 21, 2007

    No. In that case it would be "natural and artificial flavors." The feds aren't that easily fooled.
     
  37. kdb150

    kdb150 Savant (495) Pennsylvania Mar 8, 2012

    The jar is round. The mug is round. They should call it "Roundtine."
     
    leedorham likes this.
  38. Used to frequent a bar where the production guys at a large flavor manufacturer came in for lunch on the night shift. (NJ is the US home of the flavor industry - "There are so many of them, it's sometimes called the Flavor Corridor."). You could smell 'em when they walked in.

    "Chocolate tonight, right?"
    "You got it."

    Just got off the phone with a flavor co. employee.

    "What do you use as the base ingredient for your "Natural Lemonade Flavor'?"
    "Lemons."

    The point is, the OP claimed it was "artificial" and therefore felt it was cheaper than the "real thing" - lemons. Chances are good that the "natural lemonade flavor" Leinenkugel uses might cost MORE than lemons, since it is already processed/concetrated/possibly sweetened, etc. (Just as malt syrup can cost more than malted barley). But it saves Leinenkugel time and money by not having to mess with the actual fruit.
     
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