Are Breweries Over Charging or Not?

I have a hard time buying anything that is more than $10 a 12 oz $15 a bomber. There are so many great options that aren't overly expensive.

 

No such thing as over charging as a luxury item. But people, in my opinion, are certainly overpaying. Why? Well, from my point of view it seems as if beer is getting more expensive because more beer consumers are willing to pay top dollar. Folks with a lot of disposable income have turned to beer as the next thing they turn into a competition. Some brewers, who are in business to make money after all, are going to charge whatever they can get, so the price is creeping up on a lot of stuff. $40 for a bomber seems fucking absurd to me, yet some sap will surely pay it. In time, you will see what you have seen with hard liquor: There will be some highly regarded bottles of booze that cost extreme amounts of money and rich people fall all over each other to get them. At the same time, some brewers will put out beers that, when tasted blind folded against the expensive stuff, is just as good (if not better), while still being affordable to many. Both types of breweries will survive.

 

When beers like BA Speedway sell out in minutes, it tells me that demand is very high for world class beers.
Combine that with the limited batch size of many of these beers and you have an out of balance supply
and demand situation with current pricing.

Even if the breweries don't raise their prices, many of these beers will be picked up by traders
and sold/traded in the secondary market for a price that balances out the demand for it. In other words,
higher prices.

In general, I would expect higher prices for top tier, limited quantity beer and an increase in crowd funded beer clubs / societies, in the years to come.

Having said that, there is still a very large amount of quality, widely available beers at reasonable prices, I'm thinking Stone and Firestone but their are many others, including small locally focused breweries. For me that would include El Segundo Brewing Company.

 

I don’t have any insight into the intricacies of Ballast Point Brewing Company vs. Sierra Nevada Brewing Company but I feel confident in stating that beers like Sculpin are priced like they are simply because there is a sufficient number of beer consumers who are willing to pay 15-ish bucks for a 6-pack of that beer. I personally do not pay that amount since for me that would be a case of overpaying. If a sufficient number of other beer consumers made a decision similar to mine, Ballast Point would need to change the pricing structure of that beer.

Cheers to Sierra Nevada Brewing company for not abusing their customers and pricing their beers reasonably!

 

I remember when you could have gotten a first growth wine for $40.

 

Sours, wild ales and anything aged in a barrell can take as much care and effort as a wine. Most winemakers are located in more rural areas where grapes grow while most brewers are located in urban areas where the people are and where real estate costs can be a lot higher. Cheap beer is an industrial process. Craft beer is more labor intensive. Most large industrial brewers are located on rail lines while most craft brewers are not. Cheap indsutrial brewers buy malt by the rail car. Craft brewers buy it by the 50 lb bag. Malt is cheaper by the rail car. Ingredient costs are higher due to transportation costs and the use of more materials and quality materials. Beer is more perishable than most wine and when brewers, distributors and retailers finally get it right they will spend time and money taking antique beer off the shelves. So the bulk of craft beer is probably not over priced.

Whales and certain cult beers are another thing altogether. They are priced at whatever people like us will pay for them and remind me a little bit of the 17th century tulip mania where one tulip bulb sold for 2500 guilders which whouild have bought around 20 fat oxen. I generally have trouble paying more for a beer than I paid for my first car ($25) but I make an exception once in a blue moon.

 

I wouldn't pay $5 for a Blue Moon, let alone $25!

 

Pretty much this.

 

Honestly. I think the quality-to-cost value ratio is BETTER now than it's ever been. Sure, there is some expensive stuff out there, but there's also a lot of fresh, competitively priced, downright lovely beer out there too.

If anything, it seems to me that it's the Macros that are over charging. When I can get a sixer of Otter Creek Backseat Berner, Sierra Nevada Torpedo, or Lagunitas Sucks for $9-$10 and Heineken/Corona is $8.99 it become really obvious how much money goes towards marketing in some cases.

 

Yes, Wine is not beer. Wine you can blame on so many factors why its bad, or not what the vintner had envisioned.
Beer turn around depends on the style but still has the sweat equity in each bottle. If the brewer doesn't hit targets properly during the brewing no help from mother nature is going to save his/her batch.

Yes, this although i wish the price point was the same everywhere.

 

Sierra Nevada buys by the rail car, has to off load on a truck for a couple miles. What do other large craft brewers do?

Some others that buy by the semi load are Bells and Firestone Walker, for example.

There are a few that use Super Sacks.

You consult in the malt industry, so any trends you are seeing?

 

A great macro theory that highlights pricing. However, I think the concept of being "overpriced" varies per consumer and is based on a theoretical value proposition for each beer with value being the difference between the set price and perceived quality. There could be $10 bottle that falls under the over-priced category while a $25 could be considered fairly priced.

 

touche!

 

I don't see it as overcharging. I see it as a brewery filling in part of their portfolio and adding to their business model. Just so that it seems that in the craft beer world, this happens to be 'limited releases', which is at the top of their portfolio.

Before I get slammed for this comparison to photography, just give it a thought. From the business I ran, wedding photography, I was always adding/increasing my top package. Once I sold it a few times, I would find a way to make a higher priced option (more services, products, etc.). This expanded my consumer options, all the while, allowing me to offer a 'limited' package. Certain consumers like to feel the emotion that comes with getting something that a few other consumers cannot get. Of course, this option comes with a premium price. I think you can see this model in other industries.

Adding a premium, also affects other consumers into staying away from their higher products and sticking with the products they love and can afford. So it is a smart option for a brewery IMHO. They are understanding the trends, demands and growing their business.

 

Man, there is nothing more annoying in these discussions than when the amateur economists show up, drop their "supply and demand" knowledge, and leave.

I think there is a lot of worth to discussing the social and cultural impacts to the costs of things. We live in a country with serious income inequality (that is only increasing). As high-end beers keep increasing in price, they're only going to continue to be out of the reach of those without large amounts of disposable income, stratifying the craft beer community even more than it already is and making visible (and reinforcing) class divisions.

As a grad student, I have limited funds. I enjoyed participating in the craft beer community because it was a hobby that I I felt like I could participate in to the fullest without going bankrupt. I could go to tap takeovers and try the most sought after beers for $5/glass. I could buy bottles of the best beer being produced in the country for $15 or $20. I didn't do this all the time, but I was happy that many of the crown jewels of the craft beer world were attainable for large swaths of people.

I increasingly feel alienated from the high-end of the craft beer world. I stopped going to tap takeovers in my town because it seemed every bar has raised the price of premium pours while lowering the volume. Its just not worth it to me anymore to pay $10 for an 8oz pour of KBS or $10 for a 4oz pour of Assassin. I buy less and less of beers that I've long coveted or sought to try, and instead look at them sit on the shelf the way every time I go the same way I look at the bottles of high-end bourbon that aren't meant for me.

I mainly stick to the cheaper end of the spectrum, now, and that's fine. There is a lot of great beer here. I also don't harbor resentment toward breweries for high prices or think they "should" lower them. I'm just merely pointing out that as beer continues it march toward the classed systems of wine and liquor that the nature of our community will change and that some people (like me) will be fading out. And that sucks.

 

I think you are being a little unfair to some of the breweries with your first and second paragraphs. It makes it seem that some of the breweries are "bad", while others are not. Someone else has pointed out a Lawson's release that was $30. I can really only speak towards Side Project, but their 375s are not $20-$40, with the most expensive "mass" release being $30. This is a good topic, but the list of examples seems a little rushed.

 

You'll pay more and get less. That's 4 pints for $16. Even at the brewery, it's $5 for a 12 oz serving.

 

I will not touch 40% of what my bottle store sells. Cascade sours are absolute shelf turds at my store.

 

There are a lot of values in craft beer and there are a lot of overpriced stuff. I guess it depends on your opinion. I just spent close to $200 on 40 cans from other half brewing, and I would do it again tbh. HF shelf beers at $10 is one of the best values in the beer world, as was already mentioned. Lagunitas at $10-12 a six, SN at $10. Values are out there. I think most of the really expensive stuff are the limited/one off/variant bottles, which definitely took more time to make than the regular ones I would think.