How Cheap Could Craft Beer Get?

Great dialogue here but for the beers I'm drinking (the ones that taste good to me) the question is "how high can the price of craft beer go?" Supply does not support demand at the moment for most of my favorites -- that $12 25 oz bottle of Trillium Vicinity DIPA that I am addicted to sells out at the brewery within a day or two of release-- and the lines are getting longer not shorter. I'd pay more for it too. To me -- its supply , demand and quality. I've never tasted a beer from a moderate to mass market sized brewer that can match the character and flavors I expect --and a growing number of people are agreeing...

 

Before the famous "hop shortage" and rise in other commodity prices (oil, barley, fertilizer all rose too, not as much as hops though) as well around 2008 I routinely found 6 packs on sale in the 5.99-6.99, from bigger craft brewers on sale at places like Rite Aid and Safeway. Sadly that is super rare now. To find similar deals now I have to get beers which are sold in 12 packs (a limited number of craft brewers right there) and "on sale" at places like Safeway. So while Sierra, Lagunitas, Sam Adams, Bear Republic might be 16.99-18.99 list price they seem to be on sale between 11.99 - 15.99 most of the time (and if I read the circular I can be sure to not pay more than 13.99 for something good), and that's pretty darn close for quality beer.

 

I have no interest in whether craft can price similarly to Bud et. al.
I AM interested, however, in the notable price reductions across multiple craft brands in my area in the past 15 months.
This has been hard to miss, as every year from '10 through '14 the only price movement of any kind in any brand of craft was UP.
Then something new happened. (yes, this is upstate NY, not NYC, basically a beer nowheresville for market)
SN went from 9.49 to 8.49 per 6.
Full Sail went from 9.99 to 8.49 per 6.
Oskar Blues went from 10.99 to 9.99 per 6.
Ithaca Brewing went from 9.99 to 8.99 per 6.
Stone went from 10.49 to 9.99 per 6.
Sixpoint went from 10.99 to 9.99 per 6.
Smuttynose went from 9.99 to 8.49 per 6.

All these changes occurred between Jan'14 and Mar'15 in my market.
It's hard to miss that kind of a sea-change. Prices moved only in the upward direction for nigh-on a decade, then this.
Make of it what you want, but to me it's a clear sign that the brewers who want to sell regular offerings are engaged in a definite price war with eachother, currently. While there's an infinite number of special releases and one-offs that can be profitable at higher prices, I feel it's somewhat obvious that there's a more limited number of basic shelf beers that can survive and be profitable to make year-round. The game is on. Watch out below. Well, not as low as BMC, but exactly a dollar above.

 

Wow this was long.

You make a crucial miscalculation here. Otherwise, carry on.

 

I think there's something to this line of reasoning. I can get Summit Saga, a solid craft IPA, for $11.99/12-pack (and often cheaper), every day of the year. And it wasn't that long ago that I could routinely get $8.99 growlers of Pseudo Sue (pre-Brew Hub) in nearby Hudson, WI.

Never mind almost every Sierra Nevada or New Belgium 6-pack. There is definitely room for quality beer in the neighborhood of macro prices.

 

i now choose taste over price.....BUT...i'm not opposed to saving dollars on my beer purchases....thank you, Founders, Sam Adams and some local breweries for making this possible.

 

Trader Joe's Stockyard Oatmeal Stout is $6 per 6-pack in a CA. I assume it is so cheap because it's self-distributed.

 

The problem is a lot of "Craft" charge premium for average or worse product.

 

I just noticed this too. Six packs of Smuttynose are now $7.99 in my area!

I'm no economist or statistician, but this to me, seems to indicate the beginning of the consolidation period. Which is not a bubble bursting. The national (Sierra Nevada, Lagunitas, Oskar Blues) and large-regional (Smuttynose, Sixpoint) could be reaching a new threshold in economies of scale (Smutty recently moved into a much larger facility), allowing them to drop the price.

For some BA's, price isn't an issue. It is for me. I've got another expensive hobby that a lot of money gets diverted to. It is for a lot of other people too. People who aren't obsessed with beer but still want to serve something nice when friends/family come over will probably be more likely to reach for the $7.99 six packs over the $9.99+ ones. (And seriously, have you had Finestkind lately!? Amazing.) Price will probably bottom out right around $6.99, if not a little higher (we won't be seeing $5 sixers of SNPA, at least not in Massachusetts), so this isn't going to be an all-out race to the bottom. But it seems to me that middle of the road breweries who find their prices drifting in the upper end of the six pack price range are going to have some hard questions to ask themselves.

There are always going to be the Treehouse, Trillium, etc, but I think the landscape is going to start changing.

 

Around here, Sculpin is $14.49/6 at the SUPERMARKET! Sure, it's regarded as one of the best IPA's in the country, but how do they justify being $3 above the high end of the range for similar product? Supply and demand? Fermenters made of gold? Some sort of costly proprietary method or equipment? Can't be supply and demand cuz it's always sitting there if you're willing to pay for it.

 

Always the question I ask about Sculpin. What rare, expensive hops did you use that called for a 150% price point compared to most other craft IPAs?

 

In regard to relevance to the thread, I feel like they are trying to set a new benchmark as to how HIGH can prices go (in contrast to the OPs question and some of the posts on the thread). Pliny the Elder is way high $5/17.2 oz at the source, but that's clearly a supply and demand situation.

 

When I first saw Sam Adams (Boston) ale and lager on sale in Lubbock, Texas in 1989 it was exactly 90 cents higher a six pack.
I knew the distro man personally as he was a reservist in Navy and he drilled at my reserve center where I was stationed as an instructor. back then Lubbock was dry, you had to go to country line "strip" to by beer. I mention this as a shout out to "Chuck" and thanks for the free Miller lite. He supported his troops before it was cool..............

that said I only have experience on buying beer in 4 states, California, Virgina, Texas & Florida, so I assume its possible it was cheaper once?

As for it being as cheap now, no way it will never ever happen. period end of thread.

 

Give people a flagship lineup that they can drink to excess. Include lagers. Include seasonal styles. I think that a fair price is reasonable. That means take into consideration that if the bulk majority of people cannot afford your product they will not buy it. Also the reason there are "suave" products is because people know that daily things are common. Sodium laureth sulfate is the same soap no matter how much you paid for it. BTW this is the reason that the conglomerates will never "break into craft."

 

In Ireland im paying 3 euro a bottle for most, some brewers 5 euro plus for 500ml. Those are bottle shop prices. Super market about 12 euro a 6 pack if they have anything other than BMC.

 

Unless there are mega mergers to create economies of scale, there isn't much downside price movement possible.