Tuning in to the feedback, and feeding it back to you
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We interrupt our regularly scheduled programming to bring you something a bit different. A couple of weeks ago, one of our topics focused on a question: “Has craft beer priced itself out of the market?” That topic generated a lot of great feedback. This week we share some of that feedback. (Need a refresher on the topic? You can read that week’s newsletter here.)
Sorry for the diversion. We’ll get back to our regularly scheduled programming when our well-earned vacation concludes. In the meantime…
Economies of Scale Sale
The first feedback we received was from someone in the beer industry who seemed well-acquainted with the issues at hand. Here’s what Colin@... said,
“As someone who manages purchasing and cost analysis for a regional brewery, I can attest to the steep growth in costs in the past two years. However, as a consumer of craft beer, I'm appalled at the price of beer at bars, restaurants, bottle shops, and many breweries. There's pricing based on the cost of production, and then there's pricing as it's usually practiced: what is the max the market will pay for this style/brand/pack type. I personally don't believe there's much of anything craft breweries can do to reassure price-shocked consumers except, well, not raise prices."
"The reality is craft beer is a boutique product except at the high-capacity end of the production spectrum. Sierra Nevada, Bells, New Belgium: these are just as Craft as Reubens, Fort George, and Ex Novo. They're operating on a completely different economic scale, yet their pricing drives the market in chain retail and in the consumer's mind.”
Yep, Colin, it's something to think about. The difference in the economy of scale between the largest craft breweries and the nation's average-sized craft breweries is vast. Whether you brew 2,000 barrels per year or 2 million barrels per year, you sit on the same shelf and consumers consider you the same kind of product. If they are not priced the same, consumers vote with their wallets. Something to think about.
Sharing the Burden
The next comments come from Jeremy. He is the owner/brewer at a brewery in Seattle. Not a big brewery by most standards, but not a nano brewery either. There are thousands of breweries of this size across the nation. Jeremy@... said,
“Regarding inflation, we haven't had an issue with taproom customers and price increases. They seem to understand that inflation is hurting everyone, including their favorite breweries."
"Wholesale accounts are the issue for us. We routinely see them charging $1-$2 per pint more for our beer at their locations than we charge at the taproom, yet some of them still don't want to pay more for the keg!”
Jeremy, I suppose your loyal fans understand the situation and are willing to help absorb the impact. To be fair, those wholesale accounts are facing their own challenges beyond the cost of beer. If it is impacting craft beer sales, it's unfortunate that those kinds of outlets see craft beer as a place to make up ground.
More Raptors, Please
Our final comment comes from Raptor, who sounds like a right-minded kind of beer consumer. Raptor231575@... said,
“When I purchased a 4-pack of a beer from one of my favorite brewers for $16 and some change, my wife was amazed that I would pay that much. I told her that if I went to a beer bar and paid approximately $4 for a pint, I’d be ecstatic. The price doesn’t matter to me if I’m buying a beer that puts a smile on my face and has my taste buds dancing.”
Cheers to you Raptor! That's the spirit!
So how did we do this week?
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This week's Taster Tray was composed by Kendall Jones.