Is Founders 78% price hike for Reds Rye OUTRAGEOUS??

Discussion in 'Beer Talk' started by brewmsu, Sep 2, 2013.

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  1. VictorWisc

    VictorWisc Devotee (463) Jan 2, 2013 Massachusetts

    This seems to be very poor economic logic that is not reflected in sales by other brewers. You can't compare price at retail with price on tap for the simple reason that one is retail and one is service. They do not have comparable price structures because they are not in the same market sector. This is not lost revenue at all and the price difference does not all go to the brewery. In fact, the brewery already gets a smaller return from each pint sold on tap than it does from retail sales.

    It's like arguing that bus passengers should each pay the same toll when going across a toll bridge as drivers of cars already pay--because those who don't drive are lost revenue.

    The growler argument fails for a different reason. Kegged beer has a shorter lifespan than bottled and keeping it in inventory is more expensive as well. This is why it is in the interests of a bar owner to sell the contents of a keg as quickly as possible. It generally does not seem fair to sell multiple single servings at lower average price than just one such serving, so when you order 10 pints for a group, you still pay per pint. But if you order a pitcher--in those places that still sell them--that comes out with a bonus: you get slightly more pour than you would for the amount you're paying than you would if you bought single servings. Same goes for a growler--it's cheaper than single servings, on average, because it's larger quantity and the reason you can't just take it back to the table is legal, not fiscal. The whole argument is just completely wrong.

    In fact, Founders, when announcing a switch from 4 to a 6 for FBS, initially stated that the price per bottle (MSRP, that is) would be reduced and brought in line with the rest of the products, going from the $9-10 range (which is more like $11-12 in MA and NY) to $12-13 for the 6. Taking other items down from 6 to 4 and increasing the MSRP seems counterproductive under such circumstances (unless the move to year-round ADIPA, including canning, was much more expensive than they anticipated and they are trying to recoup the difference, which I doubt).

    The question of bombers vs. multipacks has been covered here multiple times and I see no reason to go through it again. But do consider an analogy--when you book a hotel, a cruise or a tour, there is usually a listed price, given "per double occupancy", and an additional "single surcharge".
     
    NoLeafClover44 likes this.
  2. ColdOne

    ColdOne Aspirant (218) Jan 19, 2013 New York
    Beer Trader

    They still have last year's Red's Rye on the shelves at our local Wegmans (Ithaca, NY). Not sure how they're going to sell this.
     
    russpowell likes this.
  3. VictorWisc

    VictorWisc Devotee (463) Jan 2, 2013 Massachusetts

    First, you're off by a factor of a thousand. And breweries in direct competition with the BBC number more like 5. And please don't speak for the rest of us on the issue of prices, because your claim is simply not true.
    Founders is donating the entire proceeds from Inspired Artist, so it does not factor in the calculations either way.
    This is not right--SN and NB are already at comparable prices with SamA where they intersect, and both SamA and SN are national brands, not regional. In fact, BBC is not the only one cutting prices--SN, Lagunitas and NB have already done that. It seems, to go national, the price goes down, not up. Same for opening new facilities--larger volume means greater opportunity to make up for lower margin with higher volume. There are obvious limiting factors--when you go from small to less small or from fairly large to larger, it actually make sense to reduce prices, but for those suddenly finding themselves in an expansion jump, raising prices may indeed be a reasonable way to recoup the costs of that expansion.
    I should also add that Koch is claiming that the prices are likely to come down because they have been quite successful.
     
    chuckstout likes this.
  4. hopfenunmaltz

    hopfenunmaltz Meyvn (1,222) Jun 8, 2005 Michigan

    So SN and NB have comparable prices, but with new breweries in the east they will have larger volume and not drop prices, even with lower shipping cost?
     
  5. Jake1605

    Jake1605 Initiate (0) Nov 24, 2009 Missouri

    They are also going to be selling 6ers of FBS soon, and unless I got some bad intel the price won't change much. Since I buy both, I think it'll balance out. Just me perspective.
     
  6. MortalKombat14

    MortalKombat14 Initiate (0) Oct 2, 2012 Michigan

    Incorrect, if you bought Inspired Artist you would notice on the box that they say they are donating a portion of the profits. Also what calculations are you talking about? I'm talking about the calculation of us the consumers saving a ton of money on a beer that currently has a 94 rating and is being sold for 8$ a 6 pack in Michigan
     
  7. MortalKombat14

    MortalKombat14 Initiate (0) Oct 2, 2012 Michigan

    They reversed that once they said All Day IPA would be year round. I hope this has nothing to do with All Day because Breakfast Stout blows All Day away
     
  8. Horbar

    Horbar Zealot (553) Feb 24, 2012 Rhode Island

    Is Founder's Harvest Ale still going to be in 4 packs?
     
  9. cetherid

    cetherid Devotee (406) Aug 23, 2010 Indiana
    Beer Trader

    Fresh Red's Rye is an excellent beer. I picked up a couple 4-packs this weekend. Drank a couple bottles and decided to pick up a couple more 4-packs at 12 bucks a piece as I haven't had red's rye taste this good from the bottle in a long time. I have zero problem paying an extra couple dollars knowing that my Red's Rye will be fresh. I can't tell you how many times in the past I've bought some 6packs only to realize they were old and pretty much had to drain pour them all which basically was me throwing my money away. I had pretty much stopped drinking the beer unless it was on tap somewhere.
     
    Hokenfloken likes this.
  10. LiquidCucumber

    LiquidCucumber Devotee (482) Dec 18, 2009 Ohio
    Subscriber

    I saw it for $14/4 here. No thanks when I can get $3.50 pints at the bar...
     
  11. chuckstout

    chuckstout Initiate (0) May 22, 2006 Ohio

    Damn straight! Vote with your wallet!
     
    russpowell, yemenmocha and Horbar like this.
  12. n2185

    n2185 Poo-Bah (1,745) Apr 14, 2008 North Carolina
    Beer Trader

    If memory serves me right, when Founders first announced that Red's Rye would be going to seasonal bottles and year-round draft that Red's Rye was an expensive beer to make and that they actually lost money by making it so regularly. While that is certainly a steep priced, it's not the most unreasonably priced beer out there. How many people buy $6-8 bombers of IPAs without complaining? That's about the same price per ounce. How many people buy $18 6-packs of Sculpin without complaining? Again, about the same price per ounce. If what Founders said was true, it's no crime for them to want to make money on a beer. They're not the cheapest brewery in the world, but they're far, far, far from the most expensive.
     
    juliusseizure and ScottyG like this.
  13. broodog

    broodog Aspirant (222) Jul 18, 2009 Illinois

    Wow, it's clear this event REALLY pissed you off. You've been a BeerAdvocate for 8 years, and this is the 1st time you've felt compelled to post in the forums.
     
    phooky likes this.
  14. BigJim5021

    BigJim5021 Zealot (581) Sep 2, 2007 Indiana
    Beer Trader

    I pay $9.49 for their year-round sixers. Overpriced my ass.
     
    Dr_Bahmbay13 and yemenmocha like this.
  15. Dr_Bahmbay13

    Dr_Bahmbay13 Devotee (462) Mar 10, 2013 Michigan

    Meijers a block away has it for 11.99 and the fricking sticker with the price say's " Founders Imperial Stout" for 11.99 I look up and see this Reds Rye with only 4 bottle's? So I side step and see TORPEDOS for 13.99 a 12 pack. California Dreaming Founders. I wish you could mix a six:rolleyes:
     
    rc51sport likes this.
  16. VictorWisc

    VictorWisc Devotee (463) Jan 2, 2013 Massachusetts

    Can't speak to NB, but SN has been very aggressively priced all year--it's not going to go down any lower. But these prices are still handled as "on sale". What BBC is supposedly slated to do is to slash prices on all their regular offerings across the board (not sure what that will mean to Small Batch, but don't expect Utopias to go down). And it's still only speculation. I'm not sure what we are arguing about here. I brought it up as a counterpoint against the claim that prices "keep going up". With NB, SN, BBC and Lagunitas slashing prices on widely distributed product, there seems to be no support for the argument that "prices keep going up". The rare and less widely distributed items are becoming more in demand, so, to a ticker, it may seem like prices are going up, but to an average non-BMC drinker the perception--at least this year--should be the opposite.
     
    yemenmocha likes this.
  17. VictorWisc

    VictorWisc Devotee (463) Jan 2, 2013 Massachusetts

    I'm not in Michigan so I can't pick it up. But the email was, at best, ambiguous:
    It refers to "proceeds" not "profits" and, although the word "all" is not there, this is the usual phrasing for "revenue minus material costs", which is a bit more than just profits. If the bottle refers to "profits", it may be more accurate. But you also might have misread it. Either way, Founders is not making any money on this, so, from their perspective there's no calculations involved. So I don't know what you mean by "incorrect".
     
  18. MortalKombat14

    MortalKombat14 Initiate (0) Oct 2, 2012 Michigan

    I was saying while consumers are getting screwed on Red's Rye, Inspired Artist is being sold for very cheap which benefits the consumer in Michigan at least. I wasn't comparing the two's production or profits.
     
    VictorWisc likes this.
  19. VictorWisc

    VictorWisc Devotee (463) Jan 2, 2013 Massachusetts

    Hmmm... give that one has national distribution and the other not and that the consumer base for each maybe overlapping, but not identical, I'm not sure how Johnny Consumer benefits. I'm not even disagreeing with you--I just don't see any compensation in this either from the Red Rye drinker's or from Founders perspective. In any case, seems to be OT and beating a dead horse...
     
  20. KS1297

    KS1297 Initiate (0) Apr 14, 2013 Wisconsin

    These things tend to work themselves out.
     
    SoCalBeerIdiot likes this.
  21. jacksonweite

    jacksonweite Initiate (0) Aug 6, 2013 Michigan

    They used to sell this beer at a loss every year, the increase is an extreme, but it might be justified
     
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  22. KevSal

    KevSal Savant (925) Oct 17, 2010 California
    Beer Trader

    but I heard its 78% better this year
     
    NoLeafClover44, KS1297 and rails like this.
  23. errantnight

    errantnight Meyvn (1,047) Jul 7, 2005 Iowa
    Subscriber Beer Trader

    Like their black rye...
     
  24. mc4z

    mc4z Initiate (0) Dec 6, 2010 California

    Man I loved when Meijer was selling Red's Rye/Centennial for $7.99/6 pack. Made a college kid's budget way more manageable.
     
    craigo19 likes this.
  25. ohiobeer29

    ohiobeer29 Defender (674) Feb 2, 2013 Ohio
    Beer Trader

    thy lost me after mango mang and whatever that ipa was can't remember the name right now.but i have faith they will come.back witb a super awesome imperial stout to regain my faith
     
  26. pixieskid

    pixieskid Initiate (0) Jun 4, 2009 Germany

    Pretty sure the price point you see is because of PA...

    In GA, Founders 6ers are typically in the $9 price point and 4 packs of Breakfast stout and Imperial stout are the same. How is that overpriced?
     
  27. pixieskid

    pixieskid Initiate (0) Jun 4, 2009 Germany

    Not all breweries are selling the same quantities as Lagunitas...Founders is a fair comparison, but not "everyone else".
     
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  28. pixieskid

    pixieskid Initiate (0) Jun 4, 2009 Germany

    I've always found them to be right in with the standard pricing and a good deal for their imperial stout four packs. What prices are you paying in WI?
     
  29. pixieskid

    pixieskid Initiate (0) Jun 4, 2009 Germany

    When Founders released that they were going to move Reds to 4 packs, they claimed they would bump Breakfast Stout to 6 packs and both would be at the same suggested retail price of $10. Granted, I believe they retracted the Breakfast Stout 6 pack plans, but I would guess that the intention is to still have Reds Rye at the SRP of $10. The reason for this change is because they said that for years Reds was selling at a loss. Just like Sierra Nevada switched Bigfoot to 4 packs because for years it was selling at a loss too. (How/why the fuck these breweries were selling a beer at a loss for years is beyond me.) So yeah, the price you're seeing is a bit higher than what they said it would be and frankly I agree totally unreasonable considering breakfast stout and their imperial stout sell for 8-9 bucks a 4 pack.
     
  30. drtth

    drtth Poo-Bah (2,864) Nov 25, 2007 Pennsylvania

    1) Founders doesn't set the price you were asked to pay and I have no idea of Founders case price to the distributor who sold the case to the retailer who set the 4 pack price you saw.
    2) Every case I've seen in the last couple of weeks has been 9-12 mos. old so I didn't check the price. I'm waiting for fresh.
    3) The case I ordered *will be* fresh.
    4) I'll enjoy it over the few weeks it lasts before the case is gone and I'll probably get another case next September.
     
  31. imbrue001

    imbrue001 Aspirant (213) Aug 6, 2010 Pennsylvania

    what a shyster ole Red is
    78% straight greed
     
  32. hopfenunmaltz

    hopfenunmaltz Meyvn (1,222) Jun 8, 2005 Michigan

    It looks like we are both arguing about how economies of scale can result in lower prices.
     
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  33. BryanA

    BryanA Initiate (0) May 12, 2013 Michigan
    Beer Trader

    In michigan the case cost from the distributor is $51 per case, divided by 6 (because there 4pks) put the stores cost at $8.50 with the correct pricing formula they should run $11.99-$12.99. So from a retailers point of view thats the correct price for the package.
     
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  34. otispdriftwood

    otispdriftwood Crusader (736) Dec 9, 2011 Colorado
    Subscriber Beer Trader

    I love the Cane and Ebel but it's $19.99/6pack here in NY - and that's at 2 different places so I can see how the distributor/store/taxes could jack up a price.
     
  35. rxeight

    rxeight Aspirant (289) Feb 5, 2012 Illinois

    Founders used to be one of my favorite breweries, but their stock with me has been dropping a lot over the past year. KBS was less than impressive, not sure if this batch got worse or if everyone else surpassed them with Bourbon barrel offerings. And the last 4 backstage offerings were a dissapointment after CBS and CBH. All day is fantastic if you can find it super fresh, but why cant i ever seem to find it less than a month old, even at the 4/1 launch this year the bottles were late feb bottling. Citra hop ipas need to be consumed in a week or two. Then they did an about face with the 6 pack of breakfast. At least imperial stout is still solid. Might be the only beer i buy from them from now on.
     
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  36. beercanman

    beercanman Initiate (0) Dec 17, 2012 Ohio

    12.99 in Ohio
     
  37. BryanA

    BryanA Initiate (0) May 12, 2013 Michigan
    Beer Trader

    It's not the distributors price hike it's Founders, all there seasonal's are all the same case price minus there backstage releases ( Rubaes. Double Trouble, Breakfast Stout, ect...) all of them are on the same price line and all 4pks. Its Founders way of making a little extra money to keep there staple packages and a reasonable price ($9.99-$10.99) a sixer
     
  38. TheNightwatchman

    TheNightwatchman Zealot (506) Mar 28, 2009 Pennsylvania



    Yeah, that really sucks. I might be slightly off in saying that it cost $40, but I know it was close to that price. It's been about a year or so since I actually picked up a case. I like the beer, but I'm not paying significantly more for it.
     
    FatBoyGotSwagger likes this.
  39. rundownhouse

    rundownhouse Initiate (0) Sep 15, 2005 Tennessee

    EDIT: Toned down response: If that's your palette, fine, but don't expect any commercial beer to reach that standard. That's what brewpubs are for. And homebrew.
     
    Bung likes this.
  40. nc41

    nc41 Meyvn (1,371) Sep 25, 2008 North Carolina
    Beer Trader

    So let me get this right, here's a beer you love enough to create a thread on it and the pricing, but at $3 a bottle you walk away from it? Do you drink a case a week? A 4 pk every now and then? You go to just about any bar and you can't buy a Budweiser for $3. Your not making a statement that Founders will pay any attention to, the guy behind you will buy it, all your doing is shutting yourself out of a favored brew. If it's a little pricey then you cut back not cut it out. Sorry such trivial price differences don't concern me, and no I'm not rich where it doesn't matter either, but if I'm buying a beer I love, whether I pay $2 or $3 a bottle for that brew is immaterial. It only makes a difference if you drink this particular brew in volume where it might hurt. I'd rather spend the the extra $1 on something I've been waiting for than another beer I can drink any day at a better pricing point.

    Like it or not 4 pks are going to be a growing trend, with the craft explosion if your a supplier you ask what the market will bear, or think it will bear.
     
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