Destroying a beer's legacy...

Afterthought. How was it objectively established that their price was incredibly low compared to other beers with similar "costs to produce?"

 

Poe, Heinlein, Vonnegut, and Doyle.

 

Then you have played the "What if..." game before.

 

For sure. I'm not against it, but SNPA east tastes like SNPA west.

 

I'm sure it does, to you. That's part of the reason for the "What if..." game. e.g., There are reasons to suggest that since about 7 years ago your current taste buds have totally replaced an older generation with no guarantee they are necessarily giving you totally identical feedback. While that's an oversimplification the basic concept is in there. i.e., Things change. The beer may not, but some of us do. Flavor and it's duplication is all about our personal perception of the beer, so.... (That's not even getting into how other factors can influence our perception of flavors as "Things change.")

 

I may be different, the beer may be different, but it's close enough for me. I could add that there is a contrarian edge to modern social media that finds and/or seeks controversy. Sierra Nevada is kinda like a sitting duck as an enduring icon.

 

Two things from reading this thread.

SN did flavor matching to get MR SNPA to taste like Chico. Brew, fly the beer to Chico, tasting panel, lab analysis, rebrew with changes, rinse, repeat as necessary. I'm sure they still send bottles back and forth for tasting panels.

Water? SN, and I'm sure OB figured it out. The water in Chico is good, in MR it is really low mineral content. They add more minerals in MR to match Chico.

Most of the equipment in Chico is similar to Mills River, so minor changes there.

 

Yup, it's close enough for you. But how about the guy from SC? And you are right, social media could be a factor and sometimes is. So which "What if..." do you think is happening inside him?

 

"Predatory pricing" usually implies an attempt to undercut competitors' prices, which was not what was happening here. I don't think there's anything unethical about Founders' pricing strategy. I do think it was designed to generate and maintain hype for the product. The second year Founders released KBS (debuted 2004), and the first year it released CBS (debuted 2009), it was well aware that it could charge vastly more than it did in the first year and still sell as many units. It sacrificed quite a bit of revenue in the short term to keep prices unnecessarily low for promotional purposes, thus relying on artificial scarcity as a marketing strategy. The reputation boost that the hype around KBS and CBS brought to Founders likely is sine qua non of its massive growth and minority sale to Mahou San Miguel, so I'd say it was an effective strategy in the long term.

Only in an environment of perfect competition -- which, in this case, would require, among other things, numerous firms producing practically identical examples of KBS and CBS -- does price equal the marginal cost of production, and there are limited circumstances in which price would be expected to correlate strongly to cost of production. Rather, the market-clearing price is set by the intersection of supply and demand. In the case of KBS and CBS, until recently, demand far exceeded supply at the price that Founders had set. The cost of production of those beers relative to other beers is irrelevant except insofar as consumers see those other beers as potential substitutes for KBS and CBS. I'm calling those beers' prices low relative to what they could've commanded in the market, not low relative to other beers or costs of production. Toppling Goliath KBBS similarly is marketed with an artificially low price, as it sells out essentially instantly, and I believe with a lottery mechanism, even at $100 per bottle (and then sells for much more in the illegal secondary market).

 

I haven't spoken with him. What if he doesn't exist?

 

Then we can't be sure that you exist either. Hmmm....

 

Great, I accept and undertand most all of that. But I'd say that that is using or taking advantage of natural scarcity. It was successful.

But I still don't see how the scarcity is artificial when we consider the constraints on production of Founder's product was the product of deliberate action except to produce a product on which there was a physical limit to produce a very small amount. In other words there was no deliberate decision to produce a limited amount of a product which could be produced in greater quantities thereby creating an artifical scarcity. It was work with the world is it is or don't make the product at all. Not a realistic thing if you want to build a business.

 

What if that could be? Truly. I honestly believe SNPA made in America to be a consistent product that remains tasty and fairly priced. To me, parcing differences between the two coasts would be worthwhile if some folks began to notice differences. I have never heard of any issue until one post today.

 

I agree that there is every reason for SNPA to be consistent across those two breweries and is known to be that way by many. So what do you suppose is the reason for his one post?

 

Possibly it's the variability of humans, and their grasp of reality. I think it's really just nitpicking, honestly.

 

I'll grant that "artificial shortage" probably is the better term than "artificial scarcity," as scarcity can imply either the fact/presence of limited resources in their own right (something that is always the case to some degree) or the presence of a shortage relative to demand for a product, which is a function of pricing. Either way, breweries often induce unnecessary shortages for their products, through some combination of deliberately low prices and deliberately low output, to generate buzz and hype.

Keep in mind also that, if breweries charged market-clearing prices for their products, they would be more heavily incentivized to increase output. With the low profit margins on beers that are priced at artificially low levels, the return to the breweries comes mainly in the form of the hype-based marketing rather than in revenue. Lower prices discourage higher levels of output that otherwise would occur to take advantage of higher prices. Breweries may find that the costs of production make higher output levels unfeasible at the artificially low prices they've chosen, but the outcome of the cost-benefit analysis could well reverse at market-clearing prices. For instance, if Founders had been selling CBS for, say, $50 per bottle in its early years on the market, Founders might well have found it worth it to outbid others on the few maple syrup barrels then available that it wasn't already purchasing. Thus the artificially low pricing strategy can exacerbate the "natural" scarcity.

 

Well since I was suggesting such things as some of the possible aspects of variability between we don't need to go so far away from reality on the ground. There are many other possibilities that don't require stepping that far away from existing known possible causes. There are causes for differences in grasp of reality, some of which we've already discussed.

 

Not the consensus of the VAST majority in these parts (my opinion). They dumped tons until dialed in and remains wonderful that we can get so fresh and I would challenge anyone to detect a difference blind. Had it on draft in Ca last year--SNPA the same solid consistent PA-- but admittedly not side by side.

 

I’d be curious about the margins as well. Certainly as BA Stouts popularity has increased no doubt the price of barrels as gone up. More stock means more floor space taken up as well, time is money and so is space.

 

Are you serious? Come on. We have some many vastly different perceptions of the same batch of the same beer by people on this site. A voice in the wilderness here--sure his opinion.