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Finding a Happy Medium

Discussion in 'Article Comments' started by BeerAdvocate, Oct 10, 2017.

  1. BeerAdvocate

    BeerAdvocate Founders (17,635) Aug 23, 1996 Massachusetts
    Subscriber

    As pricing for craft brands reaches its outer limits, growth is starting to slow, pushing beer buyers and consumers to take another look at value brands.

    Read the full article: Finding a Happy Medium
     
  2. Lucular

    Lucular Meyvn (1,293) Jun 20, 2014 Maryland
    Beer Trader

    I'm confused. On the one hand, higher-priced craft 4-packs are a problem because they make craft beer less "egalitarian," but lower-priced 15/18/20/24-packs are also bad because they blur the line between craft beer and macro and confuse consumers? And the solution is to find some sort of "happy medium" which the author does not bother to define?

    But that's one of the great things about craft beer. If I want, I can get brewery-only releases for $15-20/4-pack. Or I can opt for "budget" packs of Sierra Nevada/Sam Adams/New Belgium/etc. Or I can pick up 4- and 6-packs in the $10-15 range. More choices = better, and there's clearly a healthy market for a variety of pricing and formats in craft beer.
     
    rodbeermunch, Spade, Aleforge and 4 others like this.
  3. ChuckHardslab

    ChuckHardslab Disciple (384) Jan 25, 2012 Texas

    I too have noticed the steady creep upwards. I was shopping at a favorite bottle shop recently and ended up putting back a 12 dollar 4-pack because I just couldn't justify the spending. I have also noticed some of our local breweries filling that 'happy medium' price point by offering some very solid beers for between 7 and 9 bucks a 6-pack.
     
    pat61, griz281 and jbakajust1 like this.
  4. jrnyc

    jrnyc Savant (913) Mar 21, 2010 New York
    Beer Trader

    As long as people are frothing at the mouth and lining up for beer for hours on end, the prices will go higher.
     
    spoony, Ranbot, ypsifly and 13 others like this.
  5. Scott17Taylor

    Scott17Taylor Meyvn (1,167) Oct 28, 2013 Iowa
    Beer Trader

    I just buy beer I feel ill enjoy enough to justify the price. I have no problem buying $10-25 bombers if it's a brewery I like, or gets tons of hype. I also buy tons of cheap 12 or 15 packs, I've been drinking a local session IPA that is always $13-15 a 12. They all have their place. I do hate $10+ a bomber or can IPAs, hoppy stuff shouldn't be super expensive, it doesn't bother me nearly as much to pay a lot for a stout or sour.
     
    chrismattlin likes this.
  6. Giantspace

    Giantspace Defender (631) Dec 22, 2011 Pennsylvania

    I moved on the beginning of his year. Craft just got too expensive. I went back to AAL for quite a while. I now find the deals that are out there. I won't pay much more than $1 a can/bottle. I have been able to buy Core beers from victory , Yards, neshaminy creek, Sky fox Alesmith ballast point and more for under $1 to $1.25. I buy AAL for much less and over time I end up at close to 80.$ per.

    I will still grab a case of Bigfoot and Narwal and maybe one or two other bigger beers but that's it.

    I was paying $12-16 a four pack, mix a six for $12 and many large formats plus $50 and up cases weekly. Most were good but not worth the price to me. I am saving over $3k a year and not missing anything.

    Enjoy
     
  7. phagans

    phagans Initiate (114) Jul 15, 2015 California

    The happy medium is pricing beer to make as much profit as possible but low enough to gain/retain customers.

    This applies to every product ever.

    Words.
     
    rodbeermunch, DBosco, Spade and 5 others like this.
  8. ManBearPat

    ManBearPat Disciple (396) Dec 2, 2014 Colorado

    I’d be interested in seeing how there isn’t parity in the cost of doing business.. my first instinct is rent.

    Does rent really cost the same in Boston as it does in say... Erie, PA? That’d be crazy if it were remotely true.
     
  9. phagans

    phagans Initiate (114) Jul 15, 2015 California

    Rent for sure. Payroll is another easy one. The vast majority of the employees in the hospitality industry are working minimum wage positions so if your business resides in a state with a "tipped wage" you can basically take two dollars off the cost of every pint. Exaggeration...kinda.
     
  10. lotsaswigs

    lotsaswigs Initiate (148) Jan 24, 2006 Michigan

    My opinion is around $10 a six pack is a happy medium for most standard beers, maybe a buck or two more for brews with more/more limited ingredients (thinking primarily hop variety/quantities here) and maybe a buck or two less for run of the mill, but quality stuff. But this shit where 4 packs of reasonably standard beers are starting to push 15-20 bucks a pop is a dead end street IMO. Hype continues to work in lots of spaces, but the ever expanding options out there are going to make it harder and harder to push the pricing envelope IMO. Barrel aged beers and sours are another thing, the best ones will always demand a premium (especially when quantity is limited, intentionally or not), but I'm glad there might be a bit of pushback on charging whatever.
     
    Harrison8 and bound4er like this.
  11. Brolo75

    Brolo75 Poo-Bah (1,678) Aug 10, 2013 California
    Beer Trader

    My happy medium this year has been a lot of Sierra Nevada, great beers with a great value I wish I could their IPAs fresher.
     
  12. bbtkd

    bbtkd Meyvn (1,474) Sep 20, 2015 South Dakota
    Supporter Subscriber

    To me, anything under $3/bottle is great for a BA Stout, which I prefer. For a non-BA Stout, anything under $2 is decent. Anything under $8 is decent for a bomber.
     
  13. VanBier

    VanBier Initiate (0) Feb 23, 2013

    This is why I homebrew. I can make some of the new styles of beer, even oaked aged stuff at 50 cents to a dollar a pint. You look at the crowler prices or keg prices and you think this is absurb. That keeps me out of the breweries these days. It’s getting ridiculous and eventually people will wise up. I thought $12 per growler was peak beer pricing, now I’m seeing $35 growlers. People need to stop buying that stuff. Overhead for growlers is pretty low so, breweries, throw us a bone on the growlers at least.

    I’m thinking about a sticker series that shows how ridiculous a $6 pint at a brewery is. $6 pint = $744 dollar keg
     
  14. bbtkd

    bbtkd Meyvn (1,474) Sep 20, 2015 South Dakota
    Supporter Subscriber

    I recently went to a local brewery taproom where I had previously bought crowlers for $8, ordered a crowler of a new beer, and it rang up as $16. I pointed out that I had only wanted one - but they said that higher ABV beers are double. That math doesn't work for me since higher ABV beers should not cost much - if anything - more to make. I understand that when pricing taps that folks drink less of higher ABV beers, so the taproom charges more, but with the crowler I'm buying 32oz whether high or low ABV.
     
    rodbeermunch and Harrison8 like this.
  15. Harrison8

    Harrison8 Poo-Bah (1,557) Dec 6, 2015 Missouri
    Beer Trader

    Dear lord, who is serving up a $35 growler and what size is it??

    I was under the impression that high ABV beers use more ingredients in the mash resulting in a higher cost. For example, the quantity of malt contents that go into an imperial stout vs. a pilsner are very, very different. Perhaps I've misheard though. I'd be curious for a home brewer to chime in on this. Regardless, charging double for a higher ABV crowler doesn't seem warranted.
     
    Bitterbill and bbtkd like this.
  16. donspublic

    donspublic Meyvn (1,216) Aug 4, 2014 Texas
    Beer Trader

    It is such a small cost of the finished beer https://www.brewersfriend.com/2008/08/31/cost-breakdown-of-beer-home-brewing-vs-commercial/. If you are a home brewer, then yes that beer cost you twice as much to make, but if you are commercial it is such a small percentage. It is a standard marketing ploy
     
    bbtkd, JackHorzempa and Harrison8 like this.
  17. Harrison8

    Harrison8 Poo-Bah (1,557) Dec 6, 2015 Missouri
    Beer Trader

  18. WV_Charles_Homebrew

    WV_Charles_Homebrew Initiate (131) May 17, 2017 West Virginia

    $16-$20 4 packs seems insane to me for most beers. I've paid that in a few instances, but it better be something extra special that costs more time and/or money to make to justify that price--something barrel aged or a sour. If that is the standard price for a flagship release, you can count me out. Bombers, I will sometimes justify spending more for if its limited or barrel aged, but again I am finding myself increasingly turning to lower priced bombers that offer similar quality. And I drank a lot of Yuengling Summer Wheat this summer, both because its a great brew, and because of the affordability. Quality is great, value is great, but products that offer both are even better. I will still splurge from time to time, but I'm increasingly reaching for products that offer both quality and value. I also don't mind paying a little extra for something that is high ABV, but doubling the cost is gouging unless there are again extra efforts and ingredients that go into the beer, beyond just upping the ABV. If you present me with a shelf full of quality options of six packs, I'm much more likely to go for something that is $10 or less as opposed to something more, unless there is something I am really clamoring to try. And when money is tight, I've found myself increasingly reaching for a 6 pack of 16 oz cans of Hamm's, which is a bargain for $3 or $4 a sixer, and is actually a pretty decent brew for an AAL. I do think that the idea of a "happy medium," though ill-defined in the article, is something I am increasingly going for with more frequency. That $10 seems like a happy medium, would have seemed crazy to my younger self, but its where we are at.
     
  19. LeRose

    LeRose Meyvn (1,174) Nov 24, 2011 Massachusetts
    Supporter Subscriber

    The price creep has been noticeable and it has impacted my buying habits - much less likely to just pick up a few bottles now when I inevitably drift into the bottle shop during our weekly grocery excursions. When I do purchase, I find myself being much more selective, tending to stick to the beers I know I enjoy. Also picky about new beers - like to know something about them now versus just randomly picking. Sometimes I don't worry much about price, but cost is certainly becoming more of a factor if not in terms of what, but in terms of how much I buy. So I will spend the same $20 - sometimes that's two bottles, sometimes that is 15 bottles depending on a lot of factors.

    I recall a gent who posted here when I first joined who argued that prices were too low, especially on the "limited releases", and that when the price reached a high enough point we'd no longer see campers lining up for release days. Always thought that might actually be correct in that circumstance, but didn't think it so applicable to "every day" drinkers.

    My company did a study on "premium price differential" as part of a good/better/best idea. and basically found there was a well-defined price difference that people would pay for "premium". The price gap between a "best" product and a good product can only be so great before people no longer see the value and switch. I think cars are a good example - my wife's ride is a Lexus. The first time around there was nothing truly comparable (at a lower cost) and it was well worth the premium. Now - she drives less, and other cars have closed the gap on features, so we're questioning the value proposition.

    Looks to me, with zero head for business, that there are a lot of tipping points converging here. Highly fragmented market, oversupply of beer/breweries, cost (to consumer and brewers) and probably a bunch of other factors. Also looks to me like this might become advantageous to the larger breweries with solid distribution and reasonable pricing. I recall a conversation with a large local brewer who basically sticks to their knitting - they do a range of styles that are pretty basic, make certain high volume products for markets they know well, and a few "one offs". Their position is hold their price point, stick to what they do well, and essentially "they'll be back". Meaning when people tire of chasing trends, price becomes painful, and people just want a good beer at a good price, they are already there.
     
    2beerdogs, VABA, Birdtech and 3 others like this.
  20. StankyT

    StankyT Initiate (116) Mar 26, 2015 Illinois

    When Lagunitas dropped their High Westified 6-packs for $12.99, it crushed everything else out there, and it changed my perception in a big way. I'm just not willing to fork out $15-20 for a BA bomber anymore.

    I know they sold out, but Lagunitas is the one premium brewery that seems to not be squeezing every dime out of its customers.
     
  21. sutekh137

    sutekh137 Initiate (0) Apr 29, 2014 Wisconsin

    I have a beer bottle collection of (mostly) unique beers that will be hitting 1400 next week. I recall six-packs (local craft brews in the Des Moines, IA region) being $3.99 back in 1995, but that just makes me old. *smile*

    Seeing 4-packs above $10 (I am in Wisconsin now) has always galled me. But then I realized beer was simply pricing itself like wine. Buy a bottle of wine, or grab a 4 or 6 of beer -- 10 bucks. I knew ten bucks was going to be an inflection point 5-6 years ago (as did most folks, I think). In that sense, prices moving even higher just means the beer is considered "higher-end", like a more expensive bottle of wine. How many people can truly tell the difference between a $20 bottle of wine and one that costs $35? Not that many, probably, but the pricing tiers still can and will occur.

    I am glad to hear consumer push-back is being felt, though. I buy 24-packs of ultra cheap light beer (8 bucks a 24) as an any-time/finisher sort of beer when I just feel like drinking more. And I am finding close-out beers for $3.99 fairly regularly at one of my local grocery stores, some of the bottles new to my collection (though that is obviously getting harder these days).

    Overall, though, I think breweries will continue to consider a "happy medium" to be a pricing structure like that of wine or even harder spirits, and we all know how wildly varying in price/quality that is. All we can do as consumers, as I see it, is try to make sure we are really getting a "premium" worth the additional cost. Just a simple wallet vote. Just say no to hype and enforced scarcity, is what I say. I'll just have a couple more cans of Kül instead of shelling out 20 bucks for a 4-pack of so-called rare and amazing brew. (Yes, I have collected 1,400 beers and still drink 1-star swill like Kül. Sue me. *smile*).
     
    bound4er and Squire123 like this.
  22. nw2571

    nw2571 Initiate (117) Feb 26, 2017 Indiana
    Beer Trader

    I enjoy drinking quality craft beer, and especially trying different styles and breweries. With that being said I've noticed that I'm buying less quantity as prices have increased. This in turn causes me to drink less, which overall in my opinion is a good outcome. No longer am I buying cases of Yuengling to get through a week, instead the $30 4 pack of KBS is getting stretched to 2-3 weeks of enjoyment. In the end, I enjoyed the KBS more and probably did less damage to my liver.
     
    chrismattlin and Esch30 like this.
  23. sutekh137

    sutekh137 Initiate (0) Apr 29, 2014 Wisconsin

    I have noticed Lagunitas aggressive pricing -- was able to pick up a few more bottles of theirs for the wall without breaking the bank. Their pricing was basically bringing them down to the same level a lot of the local Wisconsin breweries sell at (New Glarus, Capitol, Wisconsin, Central Waters, Lakefront, etc.).
     
    rodbeermunch likes this.
  24. tjhuot

    tjhuot Aspirant (234) Jul 27, 2007 Maryland
    Subscriber

    I am getting Sierra Nevada Torpedo or Pale Ale at a bit less than $30 per case. I am perfectly happy with that, along with Yuengling Lager for $17.99 a case. Every so often I will try another newer craft beer and pay big bucks for a six pack, but rarely have I found it worth the price.
     
    Txex06, Brolo75 and scottlivesey like this.
  25. aleyeast

    aleyeast Initiate (131) Sep 15, 2004 South Carolina

    That's funny cause here in Charleston, the most expensive beers at the bar or store are always the locals. I would expect to pay more for a beer like Victory here due to travel, but it is cheaper on the whole. Makes me not want to support the locals. I have heard every excuse as to why they are more expensive, but it comes down to hipsters willing to pay. I can pay half as much in North Carolina as Charleston. And the last point is quality is not the determining factor for cost of beer, it almost seems gimmicky names drive cost up.

    On growlers, I hardly buy them in Charleston, used to be fairly standard for an $8-10 growler at a brewery so less than $2 a beer. Now $15 and up is pretty standard and that is $3 a beer or $18 a six pack which is pretty high for a standard offering.
     
  26. EnronCFO

    EnronCFO Devotee (496) Mar 29, 2007 Massachusetts
    Beer Trader

    Today: Trillium releases Deciduous, its fall seasonal release. This year's version is a wheat DIPA. Sounds interesting. Quick price check before I walk over: $20.20/4-pack.

    No thanks, saved myself a trip. When expanded scale doesn't lead to lower prices it gets frustrating. Trillium sells every drop of their beer in expeditious fashion, so other consumers don't care. But I've had nearly every damn local IPA in the Boston market and the difference in quality is very slim while the gap in price seems to be expanding. I find myself reverting to Sierra Nevada 12-packs more frequently and getting more excited for Jacks Abby putting out new shelf lagers than I do for high-priced local 4-packs. Every tasting and fest I go to I hear similar comments from "veteran" craft guys.

    From the article: "In Boston....breweries and beer bars are even starting to drop their prices in hopes of spurring drinkers to linger for more than a pint" Care to provide an example? I can only think of one: the Lower Depths. But every taproom or beer bar I've been to lately has been more expensive than the last time I was there.
     
  27. SirTom

    SirTom Initiate (0) Apr 25, 2016 Germany

    Prices in Atlanta have been on the rise for years, with a large spike in the past 3 years.

    The distributors here monopolistically got together and told all the local craft brewers that minimum price for a 6-pack MUST be $9.99 retail from now on. How is this legal? Distributor (mafia) makes 40% margin - more than the brewers typically make!

    I can get 0.5L beers in Germany all day for 1 EUR. What's the problem here for a smaller canned beer, why is it about $2 with tax? Greed!

    When I go to my (former) favorite beer bar in Atlanta, it is $10 for an 4 oz pour of some special beers on draft. They even have 6 oz and 8 oz pours on the menu for astronomical prices regularly now. Sure the selection is amazing, but $40 for a 16 oz pint on draft? Even a high-end restaurant in Manhattan would blink before charging customers that.

    Beer is supposed to be the "everyman's" drink - now it is cheaper to buy decent wine than decent beer. What the hell happened?!
     
    chrismattlin likes this.
  28. ckornmannn

    ckornmannn Aspirant (270) Jun 8, 2014 Washington

    In Seattle, where cost of living is completely out of hand, I am not seeing the prices you describe. Fremont 6 packs can be usually found for 9 bucks on sale; local and hard to beat quality wise at any price. At my favorite bottle shop I would consider 12 for a sixer a splurge. There are more expensive offerings I'm sure but it's usually a barrel aged and/or rare beer. My point being that you can find top quality local brews for the same price as AB acquired brews, and substantially less than hyped up brews.
     
  29. ckornmannn

    ckornmannn Aspirant (270) Jun 8, 2014 Washington

    I can find 500ml bottles of Ayinger for 3 or 4 dollars. Pretty much unbeatable in quality for the style and imported. Maybe i should move to germany!
     
    Bouleboubier and ManBearPat like this.
  30. HopsDubosc

    HopsDubosc Initiate (191) Apr 24, 2015 Vermont
    Beer Trader

    Happy Medium = Fiddlehead growlers for $10, Alchemist 4 packs for $12.50, Otter Creek/SN variety 12 packs for $15.

    I won't go near those Singlecut/Exhibit A +$20 4 packs anymore. Everyone once in awhile I'll splurge for a bomber, but not for regular consumption.
     
    EnronCFO likes this.
  31. Jerryinjersey

    Jerryinjersey Initiate (132) Aug 1, 2010 New Jersey

    I have been having this conversation often lately. I went to a local brewery release last week and picked up three 16oz 4-packs (one of each release), it rang up at $56!!! I don't usually price shop all that much when it comes to beer I like, but that really hit me.

    There's another triple release today and I will be sitting this one out. It's just excessive in my opinion.
     
    2beerdogs and tobelerone like this.
  32. Krogher

    Krogher Initiate (0) Oct 21, 2014

    Founders had a great running special this summer: 15 packs of seasonal and 12 packs of high gravity for $13.99. I gladly drank them all.summer. That's a very happy medium.
     
    2beerdogs and rodbeermunch like this.
  33. JackHorzempa

    JackHorzempa Poo-Bah (3,014) Dec 15, 2005 Pennsylvania
    Supporter

    Larry, when Tired Hands opened 5 years ago and started their canning operations 1+ years ago I was thinking that folks will 'soon' rebel at the prices. Over the 1+ years of canning they have raised prices - for example an IPA was $16 a 4-pack and now is $18 a 4-pack. They have charged $25 a 4-pack for some of their Milkshake series of beers. At this point in time I am not seeing any changes in people not willing to pay these prices. When Tired Hands has a can release they often sell-out that day and if some beers make it to the following day they typically sell out that next day.

    Do you have any insight into the sales of Tree House & Trillium? Any indications that folks are unwilling to pay high prices and the beer 'sitting' for a period of time?

    Cheers!
     
    2beerdogs likes this.
  34. Leebo

    Leebo Initiate (144) Feb 7, 2013 Massachusetts

    They brew it in your state. Not fresh?
     
    Brolo75 likes this.
  35. Leebo

    Leebo Initiate (144) Feb 7, 2013 Massachusetts

    Neither does distro, no shortage of lines at either. Not sitting around. I've tried so many of them, just not a fan. Need more bitterness in my life.
     
    JackHorzempa and LeRose like this.
  36. PorterPro125

    PorterPro125 Champion (869) Jan 19, 2013 New Brunswick (Canada)
    Subscriber

    Maybe it's not real smart of me money-wise, but I don't typically worry about the price when i'm buying craft. That's not to say that I blow tons of money when buying beer, but I don't get bothered about spending $20 for a 6-pack. I think that the amount of enjoyment I get out of that 6-pack justifies the price tag for me.
     
  37. EnronCFO

    EnronCFO Devotee (496) Mar 29, 2007 Massachusetts
    Beer Trader

    If I recall, SN bottle conditions, so even the freshest IPAs don't leave the brewery/warehouse for a week or two after bottling. In the modern day IPA market, a two-week old IPA is past its prime. In the meantime, I'll gladly drink SN hoppy beers up to 3 months out if it's kept cool.
     
    rodbeermunch and Txex06 like this.
  38. LeRose

    LeRose Meyvn (1,174) Nov 24, 2011 Massachusetts
    Supporter Subscriber

    According to tweets and Facebook, they have no shortage of buyers and sell out all thectine. So no...the tipping point on price has not yet been reached.
     
    VABA and JackHorzempa like this.
  39. Leebo

    Leebo Initiate (144) Feb 7, 2013 Massachusetts

    ^^^^ SN has great shelf life. 2 weeks beers are old? Ugggg.
     
  40. Dan_K

    Dan_K Devotee (409) Nov 8, 2013 Colorado
    Beer Trader

    Price creep is a huge concern for me.
    I remember being shocked to pay $15.99 for a bomber of parabola in 2015. Now, it would be 18.99 or 19.99 for the same thing (or $9-11 for 12oz!). Six packs have eclipsed $10 in many cases, $16-20 4-packs are becoming pretty common. I tried to set a beer budget last year. It just wasn't enough as I couldn't really get much for my money.
     
    EvenMoreJesus likes this.
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