News The Street: What You're Really Paying for That Beer

Discussion in 'Beer News & Releases' started by jmdrpi, Oct 21, 2013.

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  1. jmdrpi

    jmdrpi Poo-Bah (4,271) Dec 11, 2008 Pennsylvania

    Some interesting points on beer costs and sales numbers in the industry.

    However, my biggest take-away from the article is one of the quotes from The Beer Institute spokesman:

    "What you had was guys who build roads, hang drywall and deliver appliances out of work. These are guys who drink premium and premium light brands, because it's affordable and that's what middle-class Americans drink," Thorne says. "Meanwhile, Wall Street bankers, lobbyists and other well-paid professionals survived the Great Recession just fine and continued to plunk down big bucks for high-end beer, thereby growing their share of market."

    A lobbyist issuing a statement trying to associate craft beer with the negative reputation of lobbyists?
    Pahn and TommyLiam like this.
  2. Frankinstiener

    Frankinstiener Initiate (0) Jul 28, 2009 Illinois
    Beer Trader

    BMC sales went down because craft sales went up, and none of this was caused by the "great recession". It may be convenient for BMC to blame this on the recession but that's just a crock. The part about average beer prices is nearly useless too considering how much prices very by area. Terrible article.
    GotWad629 likes this.
  3. TdLJg

    TdLJg Initiate (0) Oct 6, 2011 Connecticut

    The article sucked. Complete waste of time.
    joelwlcx and Kreko7 like this.
  4. mrk829

    mrk829 Aspirant (221) Aug 1, 2008 Georgia

    i could not agree more. nothing new here
  5. Dracarys

    Dracarys Initiate (0) May 28, 2013 Alabama

    I wouldn't take this too seriously. It sounds like he's just auditioning to join the Ford F-150 commercial writing team.
  6. frazbri

    frazbri Crusader (733) Oct 29, 2003 Ohio

    The six-pack vs bomber pricing gets thrown around here often, and has merit, but the opening part about dry-wallers and "premium light brands" is bunk.
    ONovoMexicano likes this.
  7. LambicPentameter

    LambicPentameter Meyvn (1,469) Aug 29, 2012 Michigan
    Beer Trader

    I don't trust any website that has a hotlink to "what Jim Cramer's trading today" about anything.

    Let alone about a subject that they can't possibly know a damn thing about: beer.

    I'd never even heard of The Street before you posted this article. The idea that middle-class Americans only drink one kind of beer (read as: swill) is about as absurd a notion I've ever heard. Maybe that would make a bit of sense if there weren't craft beers at all number of price points or if the stratification between price points wasn't ultimately so small, but there are and it is, so the Beer Institute guy seems to be talking out of his rear end.
  8. Dupage25

    Dupage25 Aspirant (279) Jul 4, 2013 Antarctica

    Speaking of stereotypes...... someone who has spent some time in D.C., I can assure you that beer has made almost no inroads whatsoever amongst the well-heeled, $400 shoe-wearing lobbying class, who still scoff at anything less expensive than fine wine and high-end whiskey.

    Seriously, the part about the upper class drinking craft beer made me cringe-laugh.
  9. ONovoMexicano

    ONovoMexicano Poo-Bah (2,806) Jun 14, 2012 New Mexico
    Beer Trader

    Article was trash but I took it as a friendly reminder: I spend too much money on beer.
    SnowPackPR likes this.
  10. jmdrpi

    jmdrpi Poo-Bah (4,271) Dec 11, 2008 Pennsylvania

    Me neither, but the article was picked up by the Philadelphia Inquirer and was on their site. I just went back to the original source and found the "print page" so that it didn't require 8 clicks to read the whole thing.
  11. jmdrpi

    jmdrpi Poo-Bah (4,271) Dec 11, 2008 Pennsylvania

    Except that his organization spends about a million bucks a year influencing the government on how beer should be legislated:

    For example, the Beer Institute lobbied against the Small BREW Act:
  12. LambicPentameter

    LambicPentameter Meyvn (1,469) Aug 29, 2012 Michigan
    Beer Trader

    Sure--and I didn't mean to question your citing of the article so much as note that it was funny that they'd have an article about beer on their site.
  13. charlzm

    charlzm Poo-Bah (2,215) Sep 3, 2007 California
    Beer Trader

    I kept a job throughout the recession.
    I have been drinking nothing but craft since 2000.
    I am far from rich.
    The people I know in the craft beer scene are not wealthy, either.
  14. TommyLiam

    TommyLiam Initiate (0) Jun 10, 2013 Arizona

    Actually this is tangential to an analogy drawn by my first Microeconomics professor years ago. His analogy involved "animal beer" as an inferior good. Craft beer is a luxury good as a consequence not only weathered the recession better than normal beer commodities but recovered more quickly. The same happened in the retail department store industry. Nordstrum and Neiman Marcus are doing pretty well while companies like JC Penny and Sears are hurting.

    It's not a reason to change your drinking habits in any way but it is nice example of getting to ride rich people's coat tails.
  15. RBassSFHOPit2ME

    RBassSFHOPit2ME Meyvn (1,126) Mar 1, 2009 California

    Thanks man for responding so high up in the chain. Saved me the read!

  16. otispdriftwood

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

    So this article points out that a bunch of blue collar workers were out of work and the only segment of the economy that was affected was macro beer? And the only way these guys saved money was by not buying beer? And here I was thinking that alcohol sales increased when people had problems.

    charlzm and BeerKangaroo like this.
  17. bctdi

    bctdi Initiate (144) Dec 8, 2008 Georgia

    What the article was saying if you read between the lines : Craft beer is too expensive. If you are middle class you should be drinking BMC for a better value, and stay away from those awful bombers.
    This was a marketing article for BMC in my eyes. It's a ploy used all the time by attempting to create a false reality that we should all be adapting to.
    charlzm likes this.
  18. opwog

    opwog Defender (663) Jun 16, 2008 Minnesota

    Mmmm...I wouldn't say that. Guilt more from association than from inclusiveness; but I know many 1%'ers and several years ago, I would say that you were right. But as of right now, knowing your way around a Manhattan beer menu is a necessary skill set to be part of the in-crowd. About two years ago, I was getting panicked texts from some top tier players asking me to pop open a NYC establishments' beer lists and make recommendations. Now, many of those same people text or email me, telling me about their night at some arcane Hell's Kitchen beer stop that they went to.

    I am not saying that it has permeated any further into the wealthier classes than it has the working class, but I am saying that craft and higher end imports have found as solid a niche in those economic tiers. And while I haven't yet read the full article, the quote that the OP pulled out does, on the surface, appear to have an element of "truthiness" if I wanted to sit down and analyze the phenomena of craft's surge against an otherwise declining sector.
  19. afrokaze

    afrokaze Zealot (580) Jun 12, 2009 Arizona
    Industry Beer Trader

    So their grand solution is to buy 1/2 barrel kegs? Sage economic advice.
    JesusEffingChrist likes this.
  20. imbrue001

    imbrue001 Aspirant (213) Aug 6, 2010 Pennsylvania

    I like how bout 75% of everything I contribute gets deleted. Anyway, that's a bad article, yeah, and stuff.
    BrettHead, tzieser, jdaddy and 2 others like this.
  21. SnowPackPR

    SnowPackPR Initiate (0) Oct 26, 2013 Colorado

    I think the premise that craft beer is being consumed by upper income buyers is absurd. Craft beer's popularity is increasing because it tastes better. I don't drink as much beer as I used to, but I pay a little bit more for the craft beer I do buy. I think big beer will always keep its customers whose goal is to get drunk, rather than having a mellow tasting experience.
  22. Kumicho

    Kumicho Initiate (0) Mar 22, 2009 Wisconsin

    Wait, Bud and Coors are "premium" and Miller's High Life is the cheap stuff? Since when?

    As far as the article, here in WI the "premium" macro is almost as expensive as craft. 12 pack bottles of BMC are only $1 cheaper than 12 pack craft cans (all malt ale, like Capital or Point), and only $2-3 cheaper than 12 pack bottles like New Glarus, Ale Asylum, etc.

    The only real savings come from cheaper beer like 30-racks of PBR/Busch/etc. I can easily see how people would either splurge to get the better beer, or go down in quality to save a LOT of money and in the process squeeze the BMC beers...
  23. Crawfordesquire

    Crawfordesquire Initiate (0) Dec 20, 2011 California
    Beer Trader

    By living and working in the Napa Valley, I can tell you that the people who come here have a lot of money. You would think they all like wine, and you would be wrong. The majority of wine tourists know dog shit about wine, they just appear to have a subconscious desire to be part of the culture, as wine drinkers generally have a lot of money, they have a lot of money, and thus they think they should buy wine.
    People with money (300k + annual earners) do not drink (good) beer. This is fact with few exceptions. This is because as with wine, but completely opposite, beer is perceived as a middle class man's beverage.
  24. Crawfordesquire

    Crawfordesquire Initiate (0) Dec 20, 2011 California
    Beer Trader

    You couldn't be more right. Big beer's customers don't really like beer as much as they like alcoholic effect (to me if you drink bmc you don't even like beer). I really hate the term 'craft' beer, but those who drink what I consider to be good beer do so primarily because it taste's good. And people will always pay more for better taste and thus, a more pleasurable experience.
    gillagorilla likes this.
  25. SnowPackPR

    SnowPackPR Initiate (0) Oct 26, 2013 Colorado

    Agree - you stated this sentiment even better than I did!
  26. IAmJacksHopTongue

    IAmJacksHopTongue Initiate (192) Jan 19, 2013 Michigan
    Beer Trader

    I think The Street author just doesn't get/like good beer or see its value to those of us who do get/like good beer. I know that La Folie is more expensive than a 6-pack of Coors Banquet (or Fat Tire), but I sometimes derive more utility from the more expensive beer. I'm certain they wouldn't write an article clarifying that a Porsche 911 is more expensive than a Ford Fiesta.
    solo103 likes this.
  27. 5thOhio

    5thOhio Zealot (500) May 13, 2007 South Carolina

    I only skimmed it but it sounds like the usual "article on beer by a writer who has no real clue about beer."
    dedbeer likes this.
  28. rgordon

    rgordon Crusader (706) Apr 26, 2012 North Carolina

    See, that's how and why so much of what folks THINK is the crap they read, or hear. We are all very impressionable. The author probably really believes what he wrote. The lesson is to read as credible a source as possible, but how do we do that? The internet has scrambled real info with whatever any fool wishes to write, and our ultimate challenge is to champion not just what we believe, but what we believe to be true- and genuinely thought provoking and meaningful. Good luck, huh? Michael Jackson's writing about beer is awesome, for instance.
  29. Longstaff

    Longstaff Initiate (0) May 23, 2002 Massachusetts

    Run the numbers. 1.32% decrease in overall US beer sales in 2011 is a lot more volume than the 13% increase in craft sales in 2011. US wine sales were up 2% and spirits was up almost 3% in 2011 as well. Not all macro sales were lost to craft beer.
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