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Discussion in 'Beer Talk' started by chuckstout, Apr 25, 2020.
Agree to disagree.
I'm fine with that. Just one more thing:
I'm willing to pay the small local guys extra, but I complain about the regional and national guys using reverse volume pricing, or switching to 4x16 for a "hidden" price increase.
In answer to the original thread question I think it boils down to smaller craft breweries that brew only a few thousand barrels a year - so they have less product to can and sell. The 4-pack is more convenient.
It has been my experience that most of the 6-packs I see are from the larger breweries that put out hundreds of thousands of barrels per year.
Are canning lines easier and cheaper to install and operate than bottling lines?
Yeah, I'm sorry Mr. Johnny Come Lately Brewery. I'm not paying $15/4pk for your pilsner when I can get a beer like Konig for $6/67.6 oz
No. But, that depends on if you have five figures to drop versus six and how how fast you want to run your line at. That said. You tell me how much easier it is to do the math for a 30bbl yield when it goes into pounder cans versus 12 oz bottles.
I'll be here waiting for your answer, because as you scale up the answer gets to easier in the opposite direction.
Cans are appealing for a great number of reasons, (too many to list here right away) but the specific 4 pack pint format is largely about hype. That's how NEIPAs were presented when they first became mainstream (I.e., The Alchemist, and then Tree House/Trillium) and now people associated "hype hazy beer" with 4 pack pints.
I do also think that it is a very visually appealing format, although per ounce 4 packs are obviously less frugal than six packs.
Which benefits the brewery. And if consumers are willing to provide them with 'extra' profit then...
As we've established, that's not universal. For instance I know I can buy 16 oz SNPA for 1.99, call it 8 for a 4 pack. The 6x12 is going to be 8.99. Both are basically 12.5 c/oz.
Did anyone find an example of the same brand being a worse deal as a 4x16? And I wouldn't count situations where availability changes from 6 - 4 packs but price stays the same because.that might just be.inflation, brewery looked at needing to raise price and switching format seemed like the better bet. So far everyone has reported that when both options are available they tend to be the same price or (in one report on 2 hearted) the 4x16 is actually the better deal
When we got Bells, the 4x16oz and 6x12oz packages were about the same $/oz. for most beers (2 Hearted and seasonals like Oberon, Best Brown, Winter Ale). I want to say they were priced at like $7.99 for 4x16 and $8.99 for 6x12 at my grocery store.
That said, I don't see many (maybe not any) other breweries that do both a 4x16 and 6x12 for the same beer. SN has singles 16oz cans but I think they are like $2.49-2.99, haven't seen the 4 packs in years.
Spoiler alert: Having just polished off a 32-oz crowler of a local RIS, I take no credit/responsibility for the following observations:
There might be an economic principle at work here. Sixteen ounce cans are cheaper than 12 ounce cans. You process a few hundred thousand of these puppies and we're talking some significant bottom-line dollars for the brewery.
OTOH, there is no reason why that should be the case, since optimizing the amount of aluminum used per can results in a shorter, fatter can (I knew that my college calculus courses would come in handy someday - I actually sort of understood this). Apparently the optimal beer can should look like a condensed milk can. Yuck.
So maybe taller skinny cans just look cool and are probably more saleable, materials efficiency be damned.
Me, I am OK with 4-packs of pounders but I'll buy singles whenever I can.
Right now Boulevard is phasing in 16 oz. 4 packs to replace 12 oz. 6 packs at same price point in the Wegmans I go to. Same price 8 oz. less, but I'm going to continue to buy it. More profit to them and probably better for the beer not being exposed to light. Oh well....
I am probably in the minority here, but have grown to like the 4 pack of 16 oz. beers. Most of the time 16 oz. of beer is the perfect amount of beer for me. When I go to a restaurant or tap room, I want a pint of beer, not 12 oz. I think it's really just what we've gotten used to. Ten or more years ago, I would neve have bought any beer that did not come in a bottle. Now, the majority of what I buy is in cans. I'll tell you what is annoying, those dadgum 11.2 oz. bottles some German beers come in. THAT bugs the crap out of me!!
You should have stopped drinking after the first half of that growler. Your link to what cans cost says the empty 12 oz cans are 4 cents cheaper than the 16 oz cans, so your theory has at least one hole blown in it. I didn't read any further to see if you recovered.
El Segundo packages their Mayberry IPA in both formats.
Cans 4x16 = $14.99
Bottles 6x12 = $12.99
My only thought for the cost is El Segundo has a bottling line but they have to use a mobile canner.
Because some hipster thought a 16 oz can was cool and an overpriced 17.00 4 pack was way more budget friendly than. 18.99 six pack. Oops. Careful what you wish for.
That's pretty blatant.
72 oz for $13 in old fashioned bottles.
64 oz for $15 in the cool package.
Yup cool factor = $$$
For me their bottles are actually the cooler format as they are the stubbies.
I like it because I gauge my drinking by the pint so it fits my personal system of drink measurement. Plus better for sharing imo, 8oz for two is better (though not by much) than 6oz a person lol
Damn I'm regularly shocked by how bad we are at math as a country buy that's brutal. Why would anyone buy the cans?
The modern generation of beer drinkers have been trained well. 16oz cans are cooler, and coolness comes with a premium.
If, as posted above, they have to use a mobile canner, the extra price likely comes from there being a premium on blank cans, the cost of buying labels separate, and the added production step of labeling the blank cans.
Mobile packaging companies, generally, work on a per case of finished, saleable product (They get paid x$ per case) basis. The minimum order for printed cans is still in the 200,000+ range. So, to order short runs of sleeved cans, or to use blank cans and add sticker labels, that's just an extra layer to the process. It might not be as egregious as it seems at first glance.
Oh I don't blame the business at all. I'm just shocked and confused by the customer is all
1. trendy - no explanation needed. See NEIPA.
2. consumer perception. Most people would balk at the idea of a ~$15 6-pack (maybe not here, but i bet, even here, a fair amount of us think twice about a $15 6'er) $9/10 4-pack (assume 12oz) just 'feels' more reasonable.
You are talking about the Haze Bros here (and others).
And they get to vote!
I don't know if there's a real right answer here. When we were opening in Tombstone, we wanted the option to do both 16's and 12's and we bought one of the few canning lines that can switch between both sizes with ease and we've never done 12's. 16 oz just feels right. It's really not more complicated than that for us. After reading a few responses, I did briefly run some rough numbers and what a lot of people don't realize is that packaging expenses are very high for small breweries, even those of us that don't do contract canning. If you contract can, I just don't see how you can make money long term and have a "good" price point. I know in our area, I wouldn't be able to justify charging less than $14 per four pack at the brewery for our cheapest beer. Our pricing has evolved over the last couple years to where we are currently at $10 per 4 pack for pilsners, amber lagers, pale ales (which are basically lower gravity IPA's with our hopping rate); $12 for IPA's and imperial stouts; $14 for DIPA's or wet hop beers; and $16 for triple IPA's (normally 10% ABV with 10 lbs of hops per bbl) or Imperial Stouts that are 15% ABV or higher. We sell our beer at wholesale for slightly less and retailers charge slightly more than we charge at the brewery.
Although this wasn't our though process, I did just now decide to look at 12 ounce pricing... With our numbers as my guide, I would say our price point would have to be higher for 6 packs as we already skate on thin margins with those prices for 4 packs. Using my last check on packaging cost (it's gone up since that time), we were at 32 cents per can for 16 oz, shrink sleeved cans. That price includes the case trays and pack holders. We buy everything at a "bulk" discount that isn't as great of a discount as large breweries... Basically doing reasonable high volume purchases for a small brewery. With 12 oz cans, we'd be at 28 cents per can. The difference to can the same volume of beer comes out to about $200 per batch, so we'd be looking at $1,200 more in packaging expense per month with fewer packs to sell... and again, we already have pretty low margins at our current price point. Although we didn't really consider doing 12 ounce cans, looking at those numbers it wouldn't have worked for us anyways.
Edit to add:
The most common contract canning line is manufactured by Wild Goose. There lines are set at either 12 or 16 ounce so if you want to switch, you need a new line or an expensive kit to change out parts and the time to do so. Contract canners must have looked at the numbers and realized that 16 oz cans were the way to go as almost every contract canner I know of uses mostly 16 oz Wild Goose lines. So for breweries that don't own lines, they don't have much of an option anyways. But again, for me, 16 oz. cans just feel right. It really was that simple of a thought for us.
I think it’s more of a trend than anything else. The majority of Illinois breweries have moved to 4pk 16oz cans. They provide the illusion that the consumer is getting more beer when in reality they get less while paying more.
A four pack of 16oz vs a 6 pack of 12oz. The four pack is less product but gives an illusion that you are getting relatively equal amounts. Breweries can charge more per oz. It’s a simple marketing ploy to maximize profit. Also, less canning costs, which also maximizes profit. Don’t think we need to make it any more complicated than profit maximization.
Indeed, I am once again reminded that the ideal government would be a dictatorship (run by me of.course, the rest of you nut jobs would just make.it worse)
To, again, quote Don Corleone "competition is very inefficient. Monopolies are very efficient ".
I guess his Genco Pura olive oil must have just been that much better.
16 oz (4) packs:
"Limited can releases". (I revert back to points 1, 3 & 5.)
Because they "can". (Based on our habits as a beer community being collectively passionate "enablers".)
My breaking point is around $18+ for a four pack although I'm guilty of spending more on some occasions.
Amen to that! Beer before and after being a parent is really a two different lifetimes equation. Cheers!
Agreed on all points. It's also what the consumers seem willing to bare. Guilty as many on paying more then fully comfortable with, but I've acquiesced to the notion that economies of scale, if the product is worth it, forgives the higher cost model. At least, in the short run. For me, I tend to move from new breweries after two years or so, to spread my dollars to those that need it more, at least on the regular consumption type beers.
Thanks for illustrating the thought process and circumstances that breweries have to consider when making these decisions. I sometimes get frustrated when I see people write off the pricing/packaging choices as the breweries trying to maximize profits. Of course breweries need to be profitable to survive, but sometimes I feel it's portrayed on here as the brewer trying to bleed the consumer dry. I think sometimes I need to keep in mind that although we can all be talking about independent brewers, there is a wide spectrum of sizes and profitability within the independent world. There's a big difference between the Sierra Nevadas, Bells, and Great Lakes of the world and the hyperlocal spots scattered around my city. A big run for most of the locals is 160 cases at maximum. I have much less tolerance when I see a national or regional brewery charging what I feel is an unfair price for a mediocre product, than I do for a local charging $18 for a beer that they've labored over and feel proud to release. I'll always give my money to the people that live, work, and invest in my community. This is just the kind of consumer that I am, not just in regards to beer. Of course I recognize that not everyone is in the same situation, so YMMV.
I too support my local breweries and many of them produce beer in the six-pack/12 ounce format at reasonable prices. They get my dollars.
We are now living in very challenging times with millions of folks no longer employed. Hopefully those folks will be able to purchase locally produced beers at prices they can afford.
Hopefully, in the privacy of their homes?
Thank you Weedy for sharing your information with everyone. I really think people need to understand the costs involved for breweries and why decisions are made, etc. Your one of the few people that will tell it as it is. I hope folks read what you wrote and maybe change their views some on why breweries use the 16oz. format. My view is that people should look at each brewery and not the industry as a whole when it comes to why they sell certain size cans as they do, it most likely has to do with their business model and costs, etc.
Cheers and thanks again for sharing some info, its always nice to get a real world view verse speculation on things.
This is why I support Tombstone and always will. They make awesome beer and are awesome people, always open about business and fair on pricing. Love having them in our community, wish every brewery was the same way. On a side note, Tombstone makes some of the best beer in AZ, when the cans hit they are gone in hours. So Weedy could raise his costs on them without issue and they would sell, but they don't raise them. Their pricing has remained consistent even though demand indicates they could get more, shows you how they are class acts by leaving the costs as is.
@honkey, thanks for the insight. It is, as you say, from the small brewer's perspective.
But, doesn't it kind of prove the point some of us are making? Doesn't your argument say that a 6x12 can format is more expensive for a small brewer than a 4x16 format?
That would explain why small brewers use 4x16.
But, it doesn't explain why brewers who use both packages for the same beer price the 4x16 higher. That is (IMO) pure profiteering from the coolness factor.
What am I missing?
4 packs = new wave bombers