What is driving up beer prices?

Demand. Lots and lots of demand.

From a business perspective, beer scene is growing, and even with all the breweries and options, it's still not meeting demand. Certain premium and/or hyped higher priced products fly off the shelves fast so why not raise prices and see where the leveling off point is. Combine with increased cost of production relating to ingredients, BA programs, etc and the prices are going up. Only if we all slowed down buying beer dramatically would the price go down, but then you wouldn't see the amount of options or breweries either.

 

Us. We line up for hours, we happily pay whatever they charge, even more sometimes, and we gobble up as much as we can. Stop buying the stuff and the prices will drop.

 

Beer Geeks are willing to pay BIG BUCKS for beers they think are 'worthy' (Barrel Aged, Sours, Imperial Stouts, etc,).

The good news is there are plenty of quality beers on shelves available at more reasonable prices (think Sierra Nevada year round beers).

Cheers!

 

Wait until the 2017 comes out, then pick up some 2016 from the discount shelf. Year-old shelf-aged Expedition is awesome.

 

People stupid enough to pay those prices. Sure the demand is higher, but as long as the brewers, distributors, wholesalers & retailers know people are dumb enough to pay $30+ for limited releases they will continue to charge it. This is why I avoid buying limited release beers, and refuse to wait in line for those beers.

 

Agree Demand for specific beers and the willingness for some of the beer market to continue to pay higher prices for beer.

Certain beers flies off shelf, while plenty of others sit way way too long. To me the supply and demand, and distribution, for beer is not at all handled well by many breweries. So much expansion into new areas and new breweries opening up either they can't keep up or are not looking and using the data well enough. Not sure how much of it is they don't get good data back from the thousands (millions?) of places that sell beer to understand what sits and what they could sell a ton more of

 

Demand. Because people are willing to regularly pay $10 for 22oz bomber bottles. That's $0.45 an ounce, which would be a $32.40 six-pack.

 

Demand, caused by hype and an elitist counterculture....

 

I remember when Expedition was $12 a six. The good old days!

But I do get a bit tired of the constant sticker shock over Bell's 6 pack pricing when it is usually cheaper per ounce than most comparable bombers or 4-packs

 

A certain "limited " type of availability helps, too. If a store knows that their supply will sell out in less than a month, then you can't blame them for charging full markup on those beers.

 

The only discounted beer I ever see in my area are usually either pumpkin or christmas ales and the like. It'd be awesome if something like year old Expedition Stout would be discounted. And I agree, ES is really great with a year or more on it, and it's actually really easy for me to find older bottles on the shelf.

 

@firecracker87 - Not sure where you are in VA but don't forget that this time last year, Hops and Wine was distributing Bell's for the majority of VA but they transferred most of their craft brands, to include Bell's (everywhere but NOVA), so this is the first year that they are distributed largely by Loveland. Could have a little to do with it.

 

A lot of people here are missing some of the biggest causes:
1. Large brewery expansions: if you take on eight figures of debt to expand your brewery (and then presumably distribution as well) then depending on how that debt is structured, you have to start repaying that debt before you are seeing the cash from increased distribution and sales. How do you make that extra cash? Raise prices.

2. Increased expenses with larger size operations: When you have two guys running the brewery from grain to glass, there is significantly less expense on personnel than when they expand and add their third guy. As the brewery grows, there are more and more people for different aspects of the business, how do you pay those salaries? Raise prices.

3. Higher governmental/tax costs with expansion: This will of course depend significantly on locality, but Bell's was mentioned a few times, so let's use Michigan as an example. Federal excise taxes more than double at 60,000 bbl and Michigan taxes increase once you cross 50,000 bbl. Overall, excise taxes are a small part of total cost, but it's possible other tax rates will increase once you're no longer a "small business" or you'll lose some small business tax credits/grants once you reach a certain size.

3a. Loss of self distribution rights: There are several states where once you hit a certain production level, you have to go from self distribution to a third party. All that great extra margin you were earning delivering beer vaporizes overnight.

4. Macro beer price increases: Every fall, like clockwork macro beer increases prices across the country. The AB price increases just happened, Miller will probably hit in 2-3 weeks (different packages see different increases every year). This creates the opportunity for craft brewers to take a similar increase and keep the same ratio to macro beer they have been used to. Craft beer is generally a price inelastic product, so the craft brewer has little to lose.

5. Wholesaler price increases: Let's say a craft brewer is just in it for the love of the game and doing just fine, so they don't ever raise prices. Wholesalers are often in it for the love of the green and much more profit motivated, so they have no reason not to increase their margin. At that point, assuming the store wants to keep the same margin, guess who is paying for that increased second tier margin?

These are just a few of the many things specific to the beer industry (well...kinda) that may or may not apply in different situations. There are also the other constant increases in costs from things like healthcare, liability insurance, etc. and those get passed on to consumers.

 

demand.

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Pro tip for your (OP) specific case. Go find some Brooklyn Black Chocolate Stout. Sometimes it can be had for as little as $7.99 for a 4pack.

Everyone else is right about your broader question. At the end of the day, despite our bellyaching, we pay the prices for our perception of a better product. We can always turn to Sierra Nevada, Deschutes, etc. for great beer that is affordable.

 

General consensus is demand....It seems EVERY 'craft' beer is now 10 bucks or more a six pack in my town and never 'on sale'......

 

The only stuff around here on sale is stuff that sat for months without a single sale. Weve been carrying Atwater for 4 months and i can count on one hand what weve sold. Others like xocoveza sell out in 3 hours at $17 a sixer and that will consistently happen if people buy it. I saw Big Bad Baptist for $10 a bomber. An absolute steal because they dont realize what they have people would willingly pay double.

So its its also about knowing what you have and how itll sell.

 

I'd argue the opposite. Larger sized brewing systems should actually require less labor/overhead costs per barrel of beer produced.

There is no way that individual breweries can be as efficient as distributors that are spreading costs for warehouses, trucks, labor, etc. across larger volumes of beer and breweries.

Can we retire this "in it for the love of the game" trope? Brewers are in business to make money. They might enjoy their work, or enjoy the accolades when they brew good beer, but they aren't giving their beer away for free.