Has craft beer priced itself out of the market? Other, less depressing stuff too
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Labor Day Weekend is in the rearview mirror. The summer is coming to a close. We don’t mean to bring you down, but there it is. That’s all. Nothing pithy or clever to add. Let’s get to it.
Has craft beer priced itself out of the market?
In general, the average price of beer has increased by 16.7% since 2019. For craft beer in particular, the average price increased by 11.5% since 2019. (Based on full-case, grocery store prices.) The information comes from Bump Williams Consulting (BWC), which analyzes and reports on this kind of data. The question is whether prices have impacted consumer decisions about beer. According to BWC, the answer is yes. The beer category has now “priced itself out of competition compared to spirits and perhaps even wine,” said this week’s report from BWC.
So how have the price increases impacted sales? When the average craft beer case price passed the $40.99 mark, sales velocity declined 10.8% compared to 2019. Last year, when the average case price climbed over the $42.99 mark, sales velocity declined 9.6%. Craft isn't the only segment of the beer biz realizing these kinds of sales velocity declines. In fact, the only segment that seems immune is Mexican imports, which have increased in price steadily but have not realized any decline in sales.
That all sounds pretty dire, but there is a bright side. The report from Bump Williams notes that it is particularly hard to make generalizations when talking about craft beer. Also, the data for this report was based solely on prices and sales volumes at grocery stores. The majority of craft breweries in the nation do not sell beer in grocery stores, but consumer consternation over beer prices is also a reality away from the supermarket’s beer aisle.
How do we get consumers to recognize and accept the reality that the cost of making beer has increased at a steeper rate than the cost of buying beer? How do we get them to understand that the breweries they love are operating on ever-shrinking and dangerously thin margins?
We'd love to hear your thoughts and your ideas. Leave some feedback or shoot us an email. (Read more about the report on Brewbound.)
Here's a quick follow-up to a previous story. A few months back we reported that North Carolina's Appalachian Mountain Brewery regained its independence when the founders bought the business back from Anheuser-Busch. The deal, basically, involved the brand and the brewpub in Boone, NC. The company has since opened a second taproom location in Mills River, NC.
This week we learned that Appalachian Mountain Brewery is set to expand distribution by virtue of a joint venture with Green Man Brewery of Asheville, NC. The arrangement will see Green Man produce AMB's beers for wider distribution, something Aheuser-Busch was doing at its own facilities. So, cheers to you, Appalachian Mountain Brewery, independence looks good on you!
Brewers Association launches online training and it's free, for now
The Brewers Association just launched a new and improved online training center designed for brewing industry professionals. Topics include safe brewhouse and cellar operations, line cleaning best practices, and the foundational techniques for managing beer quality. Through the end of October, the courses are free.
Starting in November, online courses will be available for individuals and teams to purchase at member and nonmember rates. Beer and brewing professionals can expect exciting new content and feature releases over the next year, including training modules on beer quality management, beer ingredients, and human resources. It might be worth taking a look at what they're offering, especially while it’s still free. You can check it out here.
Some feedback from last week’s newsletter. Tim@.... said: “One thing that may be nice is if you give a review of different tap rooms/breweries that you have been to around the area in each newsletter.”
We don't hide the fact that The Taster Tray is based in Seattle, but much of our audience is elsewhere. That said, reviews of taprooms around Seattle wouldn't interest too many people in other parts of the country. We'd love to spend more time touring the nation and checking out new breweries and taprooms. If someone would like to sponsor a nationwide tour, ping us. 😉 🍻
So how did we do this week?
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This week's Taster Tray was composed by Kendall Jones.