How Should Breweries Price and Distribute Their Beer?

If I had people lining up outside my brewery on release day I would feel like those customers are definitely more committed which it is true imo. Of course some or most of those people are going to be getting rid of a bottle or two of what they are buying, but they are going to trade it for another premium beer. I know the Hunaphu release was 20 for a bottle and there was a limit of 3 I believe. That's not exactly really cheap for a beer, but not crazy expensive.
Having a release day adds hype and media excitement which in turn would lead to a higher opinion of the beer before even tasting it.

 

I guess I never understood raising the price of something to reduce demand, maybe Im misunderstanding though. Seems like taking advantage. If its to stop people from trading I dont think that would help either. those one will still get the beer and just make even more money on ebay or wherever every they end up selling it.

The only thing raising the price of the beer would do is put it out of the hands of the average craft beer drinker. I mean I guess more power to you if you have the extra disposable income to buy really expensive beer, but I sure don't. I mean I got a 4 pack of KBS for example, 20 dollars if A LOT for a 4 pack of beer. Any more and Im not sure I could justify it.

 

You seem to understand it just fine.

The rest of your post is kind of confusing to me. You think if you raise the price that people on ebay will make more on sales? How does this work?

Also, if the average craft drinker can afford a $15 4 pack I highly doubt that they couldn't afford a $20 4 pack. People have priorities and preferences and that is how they choose what to buy. An econ 101 class will explain a lot of this for you. Try the book naked economics. Good read.

 

No Im not saying that, what Im saying is that raising the prices would affect the ebay people. There are people out there that are willingly paying big money for some of these beers. I would be willing to bet that to stop the profiteering you would have to raise the price to a point that would put it out of reach to most people

The more money part came from the hype it may generate. Before its just a rare beer...now it would be a rare and expensive beer. Maybe not make more money, but they will still get their margins. That could be totally off though.

 

You act as if 90% of a special release beer ends up on secondary markets and that's just absurd. Sure, a few dozen people may sell their alottments of Dark Lord, but that would only equate to such a small percentage of the bottles produced. Why punish those that won't sell theirs by jacking up the price? As if that would stifle secondary markets any way. Its not like people are reselling for $5 more than what they paid for it. You'd have to jack the price up to the point where not only the resellers won't buy it, but legitimate consumers won't either.

Sure, we all may shake our head at a special bottle being sold for 5 times what it really cost, but there are much bigger fish to fry

 

Having a high price doesn't mean it won't discourage people from re-selling it. Just look at prices of Utopias online.

 

Anyone want to play "condos"? Or "dot-com stocks"? This all shall pass.

 

I am in favor of DONGs in the cases where bottles counts would be way short of meeting demand.

 

How should breweries price their beer?

They should plot the supply/demand curves and price at the intersection point. They will clear the market with neither a surplus nor a shortage.

Of course, the supply "curve" is actually a step function, but that doesnt change anything other than making the graph look weird.

 

This. Raising the price might lower demand and make it more available, but only to people willing to drop a ton of cash. I'm not sure that really fits the bill for beer. I'd lose respect for Founders if they jacked up the price of KBS to $40 a 4 pack, even though it would probably still sell out. I'd hate to see the day good beer becomes exclusively an rich man's product. If you want to sell on eBay to people with deep pockets, ok cool. That's not me. If I can't get something, I'll trade for it or drink one of a bunch of other possibilities.

 

I dont see the problem with them charging $40. But then again, I dont pay $20 for a 4-pack either, so Im not the target consumer.

But, Im assuming they value the marketing they get from the hype over the extra $20, hence the price stays low and there are shortages.

 

Its pretty simple really, any beer that is still on the shelf is priced too high

 

The way I hope it is for most craft brewers is that they think of their special releases as sort of a gift for their loyal customers/fanboys and most brewers don't want to create ill will by pricing them extremely high. After receiving hundreds of butthurt emails from people who got shut out of BT online 2 years ago, Bruery responded saying that they know they could charge $100 for BT, but wouldn't feel right making their fans pay so much for it. "Market" price on limited stuff may also lead to confused and annoyed shoppers if a brewer were to have $50 bombers sitting on the shelf next to $5 bombers.

 

I lot of people (myself included) do not have the time to line up and wait for a release. There is no "fair" way for a brewery to sell a beer that they can't meet the demand. If KBS was sold for $40.00 a 4 pack in Nj i might have a shot at buying some.At $20.00 only the truck chasers have a shot.

 

They should all be distributed to the store closest to me, and sold at cost.

 

This is 100% true. High pricing may lead to less beer geeks getting in line and bringing mules to releases, but there will always be resellers who will just start the bidding/pricing higher. Look no further than concert or sporting tickets.

 

Kinda what I was thinking, but I want to give the guys a wholesale and retail profit so they can continue. So, cost +20% for the brewer, and another 10% for the retailer .

 

how about let them distribute, price, and sell how ever they want
if you want it bad enough youll find it

 

And

And any beer that is sold out but still in demand is priced too low.