Craft beer and economic pressure

I think the $10/pour (big city prices!) was a breaking point. Definitely something I felt more than when pints crossed the $5 threshold (yes, this was a while ago).

 

In simple terms, craft beers is like any other business. Poor business models (whether growing too fast, poor location, marketing, product price, competition, etc.) will tend to be more vulnerable.

 

Since its a luxury item I feel having a brewery in a "poor location" hurts you a lot. I mean when wanting to start a brewery its very hard to get a prime location and you kinda have to take what you can get even if its not that ideal. How are you gonna get middle class and upper middle class people who live in the suburbs who have money to spend on your $20 4 packs to come to your small dump of a location in the middle of nowhere. You dont have the luxury of having youre brewery in a big city in a downtown type of location where there's always tons of all kinds of people milling about.

 

Reason why you mostly see street photos from me drink Old Raspy(11 for a 4 pack) and the like and not some dookie in the booty ass brewery selling mid ass $10 pours

 

All alcohol is a luxury item

 

I remember being in NYC in about 1980 and stopping at Luchow's for a quick beer with a friend. I was more acquainted with McSorleys. When we were getting ready to leave I put down a five dollar bill, expecting that to cover two draft German lagers and a tip. That was embarrassing (probably for the bartender as well as me) when I was had to add something extra. I guess that was my "dealbreaker" moment.

 

I wonder if ill be talking about memories of paying $25 for 2 pints plus tip 20 years from now when comparing to current prices of $50 dollars for 2 drinks in 2050

 

As a craft consumer I'm just here to drink the best possible beer available. Craft beer people usually have no qualms traveling for quality beer. Aren't some if not most of the best breweries out in the middle of nowhere? I guess the most vulnerable are the ones in the city pretending to be making a quality product.. hope all those breweries go out of business ASAP. We have no room for mediocre beers here!!

 

If I could I would “dislike” this!

 

Not to put too fine a point on things, but that $5 pint circa 2010(?) took a far larger chunk out of my income, relatively speaking. But there’s something about laying down a twenty for two pints for you and a buddy, not including tip (be sure to tip, ya bums!). Just writing it out makes me uncomfortable…

 

It can go both ways: in a downturn, or period of high inflation, craft beer can come to seem absurdly overpriced. But it can go the other way as well: in a downturn period, or a period (like the pandemic) when I can't get out and spend money, I cut way back on big luxuries and treat myself to very small ones, "affordable luxuries." There's no way I can afford a new Lexus, so I'll nurse along my 10 year old Buick; but I can afford to pay 5 dollars more for a six pack of, say, Russian River STS Pils (or any other Russian River beer, Trillium, Heady Topper, Hill Farmstead, etc.). Of course the novelty can wear off, at which point I pass on craft beer and go on to something else (craft cocktails, whisky, etc.).

 

In a developed economy like ours, alcohol isn’t a luxury item, it’s a staple. The economy doesn’t really impact if people drink, it’s what they drink, and where they drink. When times are good, people drink more at bars and restaurants. When times are tight, they drink more at home. But they always drink.

 

As beer prices and the number of breweries have gone up, I have tightened how broad I go in terms of brewery visits and off premise purchases. I have been sticking to my tried and true nearly always solid breweries the past few years after casting a wide exploratory net my first several years on BA.

For most new to me breweries or new beers, I’ll buy a single can or draft before committing to a new to me four pack. I’ve seen drop offs even of breweries which at one point I felt were solid.

In Chicago, I’d only be truly upset if a dozen or so of the ones I think are top tier, and which I also feel comfortable supporting their business closed. A good number of breweries don’t measure up, and would improve the overall quality of beer if they did close. I suspect this is the same elsewhere, at minimum 1/3 to 1/2 plus are mediocre at best, largely bad at worst.

I also cut out breweries who will throw anything at the wall for max profits, including the new THC craze. I rather support breweries committed to brewing beer, not growing their “other beverages” portfolio. Tilray is top of mind, there are a few locals and regionals I also pass on at this point.

 

Anecdotal evidence with an N of 1 here - absolutely, breweries' growing inability (or unwillingess) to price products reasonably is changing my purchasing habits.

I go out less than I used to, and now that beers are at least $8 in a restaurant, I'm only ordering one, never two.

For purchasing at home, I'm buying a lot more 12 packs of national and regional 'big craft' beers. I simply can't justify the $16-20 four packs when I can get more than twice as much beer at near the same quality for the same amount of money by going with the big companies' 12 packs.

Case in point: last week I was buying some Oktoberfest beers. There's a local brewery whose version I would love to try. But they want $15.99 for the four pack. That's just way too much money for an easy drinking lager. I bought a 12 pack of Zero Gravity's Oktoberfest for $16.49 instead and went home with 80 extra ounces of beer for an extra fifty cents.

The local brewer would need to price their four-pack of lager at $12 or less for me to consider buying it.

 

Self-employed am I. By giving myself a 3 cent income raise every feckin' day, I can sort of keep up with beer prices. BTW, I'm not keeping up with beer prices.

 

A $0.03 daily increase (assume 250 working days) will lift your total daily wage about $7.50 (or less than $0.90 an hour). That's probably not going to cut it. I hope it's $0.03 hourly wage increase each working day. If you do that, you'll end it with a $7.50 hourly increase of about $60 daily. That might keep up with beer prices. I just looked at upcoming health insurance prices for us retirees -- notable increases there (prescription drug premiums for me will go up at least x12!)

 

I am fortunate to not have needs for prescription drugs. But anything can happen. Our healthcare system is nuts for us being a "wealthy" county.

 

I hope your self-employed self has health insurance! If you have a need for drugs, prescription drug insurance might help; a low cost option is Cost Plus mail order, where the prices aren't hidden. They often beat insurance co-pays.

 

I have full coverage plus dental right now. Still putting up a fair fight to keep those wolves on the other side of the door by trying to stay fit. Anything can happen.