Complaining about Prices

I think some of the brewery owners have come on here and explained that they purposely don't undercut the retailers because they could lose their business...or something along those lines.

Also don't forget the breweries are running a bar as well. They pay rent, pay their staff, and some are also restaurants as well as bars and breweries.

 

This, this is a real thing that people need to understand.

 

Unfortunately it's a weak excuse. Retailers might gripe, but they're not going to drop a product line because one location in the world sells it for $1 less than they do. Prices already vary by as much at 20% between retailers--it's not like this is the publishing world where there's an MSRP printed on the product.

Plus, breweries have plenty of ways to offer discounts brewery-direct customers by offering slightly different products so they don't directly compete on price with retailers (e.g. deep discounts on cases, or brewery-only beers, or freebie merch).

If breweries wanted to offer a lower price, they could. I just think they've decided that knocking a dollar off a 4pk won't get them any more sales.

 

As long as those brewers also understand I'm not going to buy directly from them when I can get their product for the same price closer to home, and pick up lots of other things while I'm at it, at my local store. I imagine lots of us want to support the breweries by buying direct, because we'd rather more of our money go to them and less to the distributor and retailer. But the brewers could at least meet us halfway with a dollar or two break on the price.

 

There's so many breweries out there now though. If I'm a retailer and I have an issue with one brewery, I might just drop them. Why not?

I'll just slot in the next $15 4/pack New England IPA brewery in its place. Heck, they're probably having an issue finding space for all the breweries now. Makes my life easier as a store owner.

If I'm a brewery is that extra $1 I'm making off that 4 pack really worth risking losing a store that carries my product?

The other thing is, the product at the brewery is most likely the freshest product they have. While the store has a much greater chance of carrying an older batch.

And in the New England IPA game, I'll pay $1-2 extra for that 1 week old IPA as opposed to the 1 month old IPA at the liquor store.

 

Honestly I think it's all hypothetical--I bet no brewer has every had any substantive discussions with retailers about this short of vague threats/promises when entering a market. And I'm sure some tact would be helpful--I'm sure you'd see accounts cancelled if you dropped your prices 30% and started calling out stores on Twitter. But if you instead just always priced your stuff at 15% under full MSRP from day one (or day one of a new release) I bet no one would notice.

Fwiw, if a brewer set their prices based on the demands from a retailer, it could be an antitrust violation.

The other reason I think a retailer revolt would be unlikely is that brewers do undercut stores sometimes. There are a few breweries that usually have the lowest price in town (e.g. CBC). Back in the bomber era, brewery-filled growlers were often just a couple bucks more than a bomber of the same beer, despite being nearly 3x the volume, and yet retailers gleefully filled their shelve with bombers.

 

Jacks Abby Post Shift 6x16oz is only $7.

 

Here is my thing though, if the brewery offered them for just $1-$2 cheaper than the bar/ packy then wouldn't the thought be that more people would come to the brewery? I would have to imagine that the profit would be the same (if still not more than if I were to consume that same beer at a bar or buy at a packy), but instead of having 1 of their beers and then sampling other beers from other breweries on tap at the bar, I'd be "trapped" into buying MORE of their beer. Or, instead of just buying a 4/6 pack at the packy and going home, I would buy that same 4/6 pack but also grab a beer or two while there.

So not only are you getting the people that are there for the experience, I agree with you there, but you get the others that have already had that experience and keep coming back to the source for more! I feel like this is so obvious, but what do I know?!?

 

Fair enough, all good points. Regardless, what about all the costs associated with running these breweries? The bar, the staff, in some cases a restaurant, the rent...etc.

Maybe a brewer could shed some light on this, @robNSB ?

Many of these local breweries already have lines out the door on weekends. I don't think they're struggling to get people to go there.

Moreover, I think people who buy beer at the brewery are buying beer at the source because of a special release. Or they're not hardcore beer geeks and are their for the experience, and will probably just pick up the beer there, because well, they're there. They may not even know the beer is $1-2 cheaper at Total Wine because they typically don't purchase it.

Also, there's only a handful of breweries that are actually convenient to go to just to pick up beer. I live in Somerville. There's no way in hell I'm driving out to Framingham to buy Jack's Abby, driving all the way through traffic on Route 16 in Everett to Night Shift, over to Chelsea to get Mystic's beers...etc. on a Friday night just to save $2 on a four pack.

I can just go a mile up the street and pick it up there, plus other breweries' beers as well.

So even if there's no concern over undercutting the retailer, and if the cost of running the brewery (bar and restaurant...etc.) doesn't truly cause them to increase the price of beer over what a bar/liquor store charges, I don't see much incentive to do so.

People will buy their beer at the source either way if they want the beer.

 

It's possible that some breweries make that pricing choice sincerely to not undercut local distribution. Coming from a specialty retailer, I appreciate it at times, but I think for most it's just breweries rationalizing their 100% okay decision to maximize profit. Essentially, they can avoid the retailer pushback AND make more money, so why wouldn't they? The taproom/retail on premise model is clearly the most successful model in today's brewery world. It's the only brewery segment seeing any real growth at all. And the growth is definitely because it's a more profitable model (and at the same time more popular with consumers). Considering the price variety in the marketplace, brewers could definitely price at the lower end of the price market without fear of pushback. As a retailer, I can't get mad at them for pricing the same as grocery stores or Total Wine... because I compete with Total Wine and clearly it's a viable retail business strategy to be at that price point! I guess I don't have any leverage over Total Wine whereas I have a very, very small amount with most brewers. The only pushback would be from customers like in this thread, but they're too busy loving the taprooms and willing to pay bar prices.

As to increased costs incurred by running a retail shop/bar... it's true to an extent. The difference is that their cost is just always lower. Even with bar-like staff, they're still not paying bar costs for the product. Maybe there are some inefficiencies compared to a traditional bar, but not enough to make up for ~25% cheaper cost of goods.

 

To beeee faiirrrrrr....Hill Farmstead is one of the only breweries I'll shell out anything for. Unfortunately, I make far less money at my dream job so I can't enjoy breweries like I used to.

In fact, the $13.99-$16.99 range is too damn rich for my blood, especially in 4 pack form. Plus, the beer is not always fresh enough for me because if it's an IPA, I want the optimum flavor and aroma when it's only a few days to a month old. I do buy single cans occasionally but even those can add up in price. The Jolley convenience stores are the worst offenders here in VT as they charge more for their craft selections than a few other non-Jolley convenience stores.

 

I think there's a lot of abuse with pricing and the 'craft' word. I tasted some really beginner stuff at bars with high pricing. Charging a buck an ounce for something that could conceivably be made with fast yeast under a week is pure greed no matter your overhead costs. If a bar prices like that I expect more entertainment for the privledge of drinking it there than a TV. Offer live music for Christ sake for those prices. And those hazy NEIPA's taste like the first bitter pour out of my dryhopped corney keg that goes down the drain.
IMO most craft pints are overpriced by 2 or 3 bucks at bars. Happy hours that knock a buck off a $7 ten oz pour of your basic homebrew can go pound sand.
But hay that's marketing hype for ya. Sucker born every...
Bitching over.

 

Stellwagen is releasing a barrel aged stout that spent 5 months in barrels. 375 ml bottles for $10. Saw someone comment that they are undercharging for it.

That's $10 for a 12oz beer. If anything, that's classic craft beer pricing is it not?

 

Seems a little pricey if anything.