Three Threads

Three Threads by | Feb 2009 | Issue #25

Many consumers are complaining about craft beer prices—amplified by the current economic situation. Do you feel retail beer prices are becoming unapproachable for the craft beer drinker?

Mike Stevens
President, Founders Brewing Company (Michigan)
It’s my belief that craft beer has been undervalued since the beginning. Our products represent the very high end of the beer segment. If we take a look at the price points of high-end wine or liquor in comparison to that of beer, beer is still significantly cheaper. Although this argument stands true, I agree it still does not put money in the pockets of those hit by the current economic situation. The real question in my mind is: How will our everyday brands be affected? Will a $9 six-pack still sell? As I stated earlier, $9 for six 12-ounce, high-end beers is still of great value in comparison to alternative alcoholic options such as wine or liquor. Unfortunately, our economy may not rebound quickly, and as Americans, we need to make good, value-based choices. Now more than ever, craft beer makes sense.

Shane Welch
President, brewmaster & founder, Sixpoint Craft Ales (New York)
In the late 1970s, you could not find a single store that carried a variety of great-tasting domestic craft beers—at any price—simply because stores like that did not exist. Nothing is unapproachable, unattainable or impossible for the craft beer drinker. We’re talking about some of the most resourceful, innovative, MacGyver-like devotees of any industry. If price truly becomes a prohibitive factor, or the economy actually plunges into a depression, then folks will simply start taking matters into their own hands and begin making it themselves, just as they did 30 years ago and during Prohibition. The demand is inelastic—craft beer nourishes the soul.

Greg Koch
CEO, Stone Brewing Company (California)
Sure, prices for great craft beers have gone up more than we would choose, largely at the hand of astronomical price increases of raw ingredients and materials, most specifically hops, malt and packaging. However, I don’t think that is a mystery to the informed craft beer drinker. No one expects anyone to “like” a price increase—we sure don’t … our margins have been squeezed as a result of our increasing costs—however, when it comes to “complaining,” we’ve barely heard a peep.

Do I feel that pricing has caused craft beers to be unapproachable to the craft beer drinker? Poppycock! That’s a ridiculous question/statement. The quality and character and value available in a great craft beer is unparalleled. However, it is no longer unrealistically inexpensive.

For years, the prices of hops and barley had been depressed because of a variety of market forces far beyond the influence of the fractionally tiny craft brewing movement. One must realize that, while craft brewing seems like it is capable of moving the earth, we are actually only on the very cusp of that happening on a collective emotional level. On an economic level, craft brewing is still microcosmic when it comes to national and global market forces. We do not determine the economy. We don’t have that collective power, and we’d be foolish to think that we could exert control (most nations cannot exert any control). So, we can either realistically reflect these market realities, or we can put our businesses at risk and try to ignore them. At Stone, we have chosen the former.