How Cheap Could Craft Beer Get?

The brewer would likely have to stick with ales almost exclusively due to the time (=money) aspect of producing lagers or lagered ales. So no Pilsner, kolsch, etc. I think that it's feasible for a large scale producer to push prices as low as $6 per 6-pack, assuming they keep the costs low.

 

Throughout the '90's and early 2000's, craft beer was priced in line with or cheaper than BMC as it fought for shelf space and name recognition. it wasn't until the late 2000's that craft pricing started to expand dramatically. Initially this was blamed on things like "hop shortages" but pricing never came back down. some brewers undoubtedly recognized they had a premium product compared to BMC and priced accordingly.

 

I think eventually breweries will fill this "gap" in the market. Because after awhile how much better can beer get. The great IPA players are established, same for stouts, sours, ect. The next logical place to compete is on price. This will be done by new guys not established brands. Thus there will be an added tier to the craft market. I would expect them to compete on price at 11.99ish a 12pk and 5.99-6.99 a 6 pack.

I cant think of a single brewery where it is more expensive to drink there than at a bar. It should be cheaper to drink direct from the source. The benefit of a bar is you get multiple choices.

 

A lot of the demand right now is for beer from small, micro brewers who don't have significant economies of scale in their operations. That forces them to charge relatively high prices for beer (4 bucks per pint can at a lot of places I go to, at least). Those higher prices provide a price umbrella for a lot of other, mediocre beers that larger, national brewers are all to happy to sit right under. There's also no incentive for many brewers to cut price because their product is selling out rapidly. Furthermore, craft beer is taking share from other categories like traditional beer, wines, and spirits, so there's no necessity to go after market share gains while the entire industry is enjoying rapid growth.

Once you see the category's growth as a whole slow down, that's where I think you start to see things rapidly change. You'll see large brewers start to offer acquisitions prices to the small guys for their recipes / brewers at levels that small brewers would be stupid to walk away from. You'll see historically small batches that are of high quality produced in large scale format and reduced in price as they become distributed nationally. In my opinion, that will be what brings about the decline in craft beer prices.

 

don't get me wrong, i'd love to see that happen. I believe it is only possible for "large" scale breweries as they have the "excess" capacity necessary to compensate lower pricing with increased volumes, hence SN six packer for $8 or $9. there is without a doubt some price inflation due to the unnecessary distributor "link" in the value chain (i.e. they don't add any value but charge for giving the you the privilege of being able to buy "their" beers).

EDIT: Indiana and Illinois both have self distribution laws and most of the breweries self distributing still charge in that $10/six pack range.

 

what planet are you from?

 

I could be wrong on this (and this doesn't specifically address the question of buying beer for consumption at home), but I've heard that Boulevard prices some of their kegs low enough for distribution to bars in Kansas City to compete with BMC, etc.

 

from 1996 through 2000, I could get a six packs of goose island, great divide, and IIRC victory for $5.99 - $6.99 which was about the same as a six pack of budweiser bottles. were you out of diapers by then?

EDIT: Lienenkugels too

 

It seems to me that for the larger craft breweries they could indeed produce craft beer and price it more economically.

This example already exists: Yuengling Summer Wheat. A few months ago I purchased a 6-pack of Yuengling Summer Wheat for $6.99 and that beer is a very, very good Hefeweizen beer.

Cheers!

 

I don't think well ever see craft get too cheap because we are used to paying the high price, but there are options at close to $1 a beer. Tallgrass 8 bit pale ale cases can be seen for $22 and Sam Adams octoberfest 28 packs are $24 at SAMs club. We have affordable options but I don't see it getting too far under $1 a beer.

 

You are already seeing this phenomenon with macro owned "craft" options like Goose Island. Around here, 4 packs of pint cans of the IPA are $7.99, whereas the closest craft competitor in the same format is $10.99. As BMC acquires more brands, watch them to initiate a price war they can easily afford to wait out. The hope is to get the consumer to capitulate - "I like that local option better, but not for 1.5 times the price."

 

At a Harris Teeter in DC. Most craft 6 packs ar 8.99. Stone, Lagunitas, DFH, are 9.99. Schlafly and Port City (which is both local and we'll regarde) 10.99. Victory Golden Monkey and Rogue Dead Guy are 11.99. Shock Top and Goose Island are 7.99

I suspect it will be difficult for breweries that need to cover the costs of expansions to undercut breweries with large amounts of excess capacity, for whom the brewery facility is essentially a sunk cost.

 

Sam adams here some time's is $6.99
the good monks at Westvleteren sell the 12 for about 2 bucks a bottle, image what a comparable beer to that would sell for here. 12 a pop? markup is a bitch....

 

no actually SAM Adams was darn close.

 

Its all about demand, I demand it so i'll pay whatever for it.

 

Paying more for it makes it taste better.

 

To many craft drinkers would think it can be good at that price.

 

In the Minneapolis area the wholesalers never cut retailers slack on "Microbrews", back then. It was $5.95 Samuel Adams, $5.50 Summit Brewing / August Schell (local / Minnesota), and $4.95 Stevens Point sixers (new to the market in 1992).

We were pretty happy with that at a time when Michelob (Original) was running neck-and-neck with Boston Lager, and the market-leading Michelob Golden Draught Light was $5.25; In other words, Craft (and "True Micro") wasn't set for price points below mass marketed Premium, Super-premium, or Imports.

Indy and their 'Jungle Jim's' are probably an outlier, but maybe Indiana as a whole is just that much more competitive?