Why is this beer so expensive?

A quote without comment:

"There is hardly anything in the world that someone cannot make a little worse and sell a little cheaper, and the people who consider price alone are that person's lawful prey." (Original source unknown.)

 

I'm so tired of the 1. and 2. reasons. How do some breweries do barrel aging reasonably? Do I need to post examples? We'll just say the best beer this year Lagunitas High Westified $10 a bottle. What, did their barrels, time and space cost less? Best beer 2014 Alewerks Bourbon Barrel Porter same price range. Even Bourbon County regular would equate to $12-$14 a bomber (until this year). Was that price increase due to anything other than AB's desire to make more $?

3. is the only valid reason, people will pay it. Just not me any more.

 

Ya'll need to listen to more brewers, and brewery owners about this situation. Here's what I know from working with them and listening to them.
Let's duly make a note of just how much distribution makes off of these beers just for putting them into a truck and carting them around to the various aftermarkets who also want their part of the cut for selling it to you, the end consumer who wants to complain that they think they are paying too much. This little enterprise of middleman to end guy is at least a 50% cut right off the top of that 16 - 20$ bomber. The actual profit a brewery has when it comes to them becomes fairly small, and there are an awful lot of beers that are no longer produced precisely because of that.
Those exotic ingredients also cost a pretty penny, and in conjunction with barrels. That's doubling, or tripling the cost of producing super fancy first use barrel with vanilla, cacao nibs and coffee whose original base beer sells for 7.99 a bomber. Those barrels which everyone wants to use are now a serious commodity, and are no longer considered as something the distillery sells with an attitude of "just get rid of them" to one that commands attention to making actual money, and starting up a waiting list.

 

Lets not forget that barrel aging also has risks. Barrels are porous and hide bacteria and yasts that can spoil a beer. Extra lab work goes into quality control on these beers, and inevitably some bqrrels will be dumped. Less beer out, more labor, longer storage, lab costs etc etc lead to higher prices.

 

see the Kane thread!

 

It's because Stone has to pay for it's new brewery in Berlin.

 

Well, 1 and 2 are part of life. Just like they are with ANY line of work. It's not all magic and unicorn farts.
Lagunitas can do that because they have the capacity with their main line up absorb whatever loss they might be selling them at, and the barrel program is literally just a side project that is done in 30 - 50 bbl runs and takes up as much space as perhaps two of the forty or so 800 bbl fermenters which house IPA, Sucks, or PILS. i.e. it is tiny in comparison.
That's sort of the same situation which Goose Island established for many years while the rest of the world caught up with buying into how special Bourbon County actually was. Those beers were sold basically at cost, or at a loss because they had their core line up which could absorb that.
You have the product that keeps the lights on, and you have the side projects which create financial head aches. That's life in a brewery.

 

Usually I'll pass on a price I consider too high, but if I REALLY want it, the trigger gets pulled.

 

Time = Money

With that there is a point that I wont spend that much for a bomber or bottle of beer, and 20$ is reaching that point.

 

What's funny is, if it was $25 for a 22 oz, I'll bet this thread wouldn't even exist even though it would be slightly higher per ounce and less available. Put it in a smaller bottle to ensure a more even distribution across the footprint and people get bent out of shape. Put it in a larger bottle but only send it to certain markets, the people in those other markets get bent out of shape. You can't win. Although I guess a different thread would exist: "How come (insert state) got Double Rye Bastard and (insert state) didn't?"

 

The pricing in comparison with Belgian beers with the same cost issues/overheads makes a lot of US specialist beers seem expensive.

 

The bottom line is because they can. If you could sell 100% of your product for $10/each, why would you sell it for $7/each? These guys are in this business to make money, not friends.

 

Really.

DeGarde must get their barrels for free, and age their beers in hyperspace, which doesn't cost the enormous amount of money it apparently costs other breweries to pour beer into and store barrels.

 

Interesting theories all around! Always enlightening to learn all the opinions about the facts of our realities.

Here's a quickie lowdown...

We have a completely separate barrel-aging warehouse. We had to as there wasn't room in our main brewery. We have to pay rent there. We had to modify it and temp control it. We had to chew up the floors and add trench drains. We had to install the right electrical panels, and build out proper restrooms for our team that works there. We had to purchase bright beer tanks to go in there (where the beer goes between the barrels and the bottles). We had to buy a special bottling line for the 500ml bottles and a cork-n-cage machine to go on the end of it. We had to buy a forklift for there, and repeat lots of other equipment as it's a few miles from our main brewery. We have a separate "Small Batch" team that we employ there. We take risks there...not everything works out..sometimes we lose beer to souring or other infections as barrels are a lot less controllable than stainless steel. We have a vastly lower output per square foot and per person than the main brewery due to longer aging times and a less efficient layout (rows of stacked barrels hold a lot less beer than rows of fermenters), which makes costs per barrel of beer produced there skyrocket. The 500ml bottle is a more expensive package than 12oz or 22oz bottles, but we felt that the beers needed a special packaging configuration. I know I'm forgetting other things off the top of my head.

Guarantee you this: Our main brewery is a much more viable business than our barrel aging program, even though the retail cost for the latter is a fair amount higher. Efficiencies are out the window for the latter. Yet we do it because we love it, and because a lot of you do too. We see the value in it, and so do most of those that choose to indulge in a purchase. Now, if we just stomped on a buncha grapes and fermented that and put it in a bottle, no one would complain about the price.... ;-]-=

 

I tend to chuckle at the people who think the "because people will pay it" option is actually valid(even though the original comment was funny), especially when the product is coming from a brewer like Stone. Don't forget that the Stone sells to the distributors, who then sell to the retailer, who then sells the product to the consumer. A higher dollar item marked up twice(usually by percentage), is going to be even higher at the retail end.

If Stone really wanted to "rake in the money", do you really think they would've chosen Southern Charred to do it?

 

Crazy how the pitchforks go up over a few dollars difference due to some long-standing expectation that beer must be cheap. If we want to see more and more crazy barrel aged experiments, we need to be willing to fork over the cash so that the risk is worthwhile. It's a luxury good and deserves to be treated as such. A vast majority of people in the brewing industry make next to nothing, and they have every right to jack up the price if the demand is there. Expecting all breweries to price beer at the bare minimum to turn a profit so that the well-off craft beer drinkers can sock more money into their savings accounts is absurd and unsustainable. Obviously large successful breweries like Stone aren't hurting but it's just a toxic, self-centered attitude to apply to the industry as a whole.

 

Thanks for the detailed analysis. I think most here understand how expensive it is to barrel age. You guys probably have very good numbers to balance those costs vs what the consumers will pay in those volumes. I did find it interesting that you state your brewery is much more viable. I understand that on the scale you guys brew at. Do you have any feel that a smaller brewer working on a much smaller barrel program would be under the same opinion? One little nit pick I have is using wine as a counterpoint ( I did see the smiley face). I find it ironic that almost every cost you list for your barrel aging facility is a cost for a winery too.

 

Add the Cellar Reserve (or whatever they call it) version of Old Stock to the list. I have seen my share of dusty $25 bottles just sitting on shelves for year after year.

 

I'm personally used to working in breweries that are the spatial equivalent of 8 pounds of shit in a 5 pound box. So my understanding of barrels is framed in that perspective. In those situations, it becomes a constant compromise of making peace with losing room that you really would prefer not to. The mentality of small brewers who have mastered their game of tetris and space is as follows. Use it or lose it. Because it seems as well, breweries are the natural habitat of pack rats. So, that space where a few racks of barrels is going to spend at least 6 mos hanging out at is something worth thinking very deeply about for present use value, and to prevent future questioning of past use of intelligence. Because once something is put down. That's hopefully it because it's a massive time suck to undo it. Typically. That's a realization that begins with "oh, shit."
There's also an awful lot of negotiation between departments, or with breweries who are utilizing the alt prop method of starting out, across breweries. Not just for how that row of space is being used for that day of racking and packaging. But for the duration of its time in that spot as well.
It's an interesting dance, and when the results are good. It's worth the effort.