Beer will get more expensive, right?

Great response. But you should have bolded fuel costs as well. JMHO, I believe fuel costs is the main factor driving beer price increases for the last 10 years. It affects everything from planting and harvesting the grains to transporting grains and beers to/from market.

Retroman had a great response above as well. Additional taxes and regulations can and will increase beer prices. Generally speaking, federal and state governments have been pretty hands off the craft beer industry to date. That won't last forever. As soon as those pricks can figure out a way to weasel additional tax revenues from a thriving industry, you know they're going to do it. All in the name of making things better for you.

 

Murphy's Beer Law #8, "Any style of beer you enjoy the most, will be the most expensive style of beer."

 

“I think most on here would say no but most seem to say $30 a bottle is too much yet someone is buying beers from The Bruery.”

Well, that is the ‘problem’ IMO. As long as beer drinkers are willing to pay ridiculous prices like 30 bucks for a bottle of beer then some brewery will come up with the idea to charge 35 bucks and so on.

I recognize that you are inquiring to see how many BAs are willing to pay these ridiculous prices and it appears that you got a couple of ‘hits’ here?

Cheers!

 

You can't find lots of beer for under $10??

 

Fuel costs are a factor in everything we buy (American perspective disclaimer). To a greater or lesser extent water quality and prices are part of almost everything we buy as well. I think the singularities here will be hops, barley, hype and as you stated taxes and regulations that tie into both luxury goods and things that are perceived as a vice. Industries such as tobacco, tea, coffee, gambling, alcohol, and now junk food are subject to additional taxes and regulations.

Beer just happens to be extremely dependent on water as much as it is fuel. I am wondering how the algae issues they are having in Lake Eerie, droughts in the midwest and west will impact the price of our beer.

And hops and grains may develop a new disease, blight or pest problem. That's the big variable in my mind.

 

Not too many people are going to pay those kind of prices for beer. Beer is relatively inexpensive to make. Moreover, most wine drinkers don't pay those kind of prices either, you can get very drinkable wines at lower prices. But there is a high end for everything and someone will accommodate those who insist on paying more, it just won't be the norm.

 

I know. Just being a smart-ass. Like anything else prices for the high end beers will go up until the market dictates otherwise. I'm not willing to pay forty bucks for 22 oz of anything, but that's me.

 

$200+ bottles of Utopias, 100$ bottles of Tactical Nuclear Penguin, and $80 cases of Hopslam and Heady Topper already exist, and yet the average price of a craft sixpack continues to hover around 10$. Shit, even Heady's not a bad deal when you break it down to price per can. I think the price of beer, on average, won't really be dictated by anything other than its cost to make and the brewery's target profit and sales margins, save for gray market dealers and the occasional popular outlier.

Also worth to consider that the culture of craft brewers and beer geeks is pretty different compared to vintners and average wine enthusiasts. There's little in the way of ingredient and technique variety when it comes to wine to where trying new things seems sort of frowned upon, but we'll experiment out the ass with beer using any ingredient we could throw into the kettle. In wine it's more often a "who makes the best of X grape varietal?" with not a lot to differentiate, whereas with beer, there's thousand different DIPA's, and we tend not to pay much heed to anyone asking which DIPA is objectively the best...at least I don't.

 

There seems to be a fair amount of discussion of the costs to produce beer. Hopefully @jesskidden will join in.

Below is a pie chart of the costs involved in producing mass produced beer (courtesy of JessKidden in a past thread). When it comes to $30+ bottles of beer the price is not driven by production costs (or other related costs); it is mostly driven by what consumers are willing to pay (e.g., what will people pay for prestige or mystique).

Cheers!

 

Thanks for the pie chart Jack. Is there something similar for smaller breweries and a bit later in date? I am not sure how close the breakdown is, particularly the Advertising, Brewer profit and Packaging wedges.

 

I have no further information here. @jesskidden is da man when it comes to these sorts of discussions.

Hopefully he will join in and school us all.

Cheers!

 

Packaging cost more than the beer, even for a craft brewer.

Water costs can be a big number for a production brewery, but the waste water treatment cost is higher. That is why some have put in their own bioreactors for the waste stream, that gets them a lower charge from the utility.

Cost of beer vs wine? If one looks into the cost for starting a vineyard winery vs a brewery, the cost premium for wine becomes a little more understandable.

 

“If one looks into the cost for starting a vineyard winery vs a brewery…”

Jeff, that is a valid point. I would imagine the debt obligations for purchasing many acres of land to grow the grapes would need to be recouped via the prices of the bottle of wine. Plus there is the delayed timeframe of obtaining a ‘good’ grape crop to produce wine for startup wineries.

It also ‘helps’ that the wine market somewhat supports the prices. After the NHC I did some camping near Traverse City, Michigan. I toured a number of wineries in the area. I am by no means a wine expert but I was taken aback by some of the wine prices. Having stated that I did buy 2 bottles of wine for my wine; both bottles had prices around 16-17 bucks (more than I typically pay for wine).

Cheers!

 

Demand will determine that. In the 5 or so years I've been drinking the beauty that is craft beer I've seen a drastic change. It's also the fact with so many breweries that the old guys have to push themselves into new territories. I.e. Sours/aged/barreled beers which take longer thus more expensive. Adapt or die from
Thirst unfortunately.

 

Yes Jack, the land, the vines, 3 years or so before good production, the equipment, it all adds up to much more than a brewery of comparable size/volume.

A few of the wineries are making some pretty good wine around the Lelanau and Old Mission. The price is about right for some of their good Rieslings, which are less money than what we can find a high quality German Riesling in our area.

To keep it beer related, did you find any good beer around TC?

 

Yes, we did indeed find some good beer! The beer highlight for me was going to the Jolly Pumpkin Brewery on Old Mission Peninsula. Timing did not work out for a tour (bummer) but we stopped into the brewpub for some tasty beers and dinner (the ribs were great!).

Your observation about the Riesling wines is spot on. I am a BIG fan of dry Riesling (or as the Germans label it Trocken) and there were many tasty dry Rieslings available. The 2 wines I bought:

· Laika Gruner Veltliner (Old Mission Peninsula)

· Brys Estate Pinot Noir/Riesling (Old Mission Peninsula)

Both of these wines are worth the price charged.

There were also tasty wines on Leelanau Peninsula but for some reason I made no purchases there (too pricey?).

Cheers!

 

Wine takes longer to make and grapes are not as easy to grow as what goes into beer.

 

I don't think this will happen, but say, in 10 years, breweries like founders, cigar city, bells, Russian River and the likes open up a second brewery to focus on the beers that stay don't even make the shelves when released. They all expand and you go to a store and have kbs, black note, Black Tuesday heady topper and zombie dust all at your fingertips due to increased volume. Then, the beer sits there for quite skme time and doesn't move bc people can get it whenever thy want or have a fixed budget. At the point when the breweries supply exceeds demand, wouldn't prices actually go down? And I am not saying this will happen in ten years but with many breweries opening up a second one, typically at opposite ends of the country for distribution purposes, I could see some of the up and comers doing this and flooding the market. Is this at all a possible scenario? I just look at how technology used to be extremely expensive and now it's the exact opposite of how it was in say 1995.

 

300%? In a store? Industry standard is usually 33% in a store. You need to find a new store.