Ron has posted a great interview with Minnesota brewer Kristen England brought to us by Northern Brewer, the US home brew supply shop. I don't normally like web video due to production values (or surprisingly squeaky voices) but this is a straight one camera interview that does not pretend to be anything it isn't. And they use good microphones. And they recorded it in the home brewing room I lust for.
Plus, there is a great observation at around 27 minutes in about beer being priced by the gravity units. Somewhere around here I made the point, years ago, that lower priced session beers would gain traction when brewers priced them according price inputs. I recall receiving a scolding. It was at a time when craft brewers could say things like they had to train drinkers to pay more. Such silliness.
Comments
Alan - December 11, 2011 9:41 AM
Another sort of correlation between price and sales.
When did happy hours get to be "so called"?
Adam - December 11, 2011 5:34 PM
The idea of gravity-based pricing displays a fundamental ignorance of the economics of commercial brewing. A low gravity beer, brewed not as second-runnings, and not watered down after brewing as some industrial light lagers, is not significantly less expensive to produce than a similarly-hopped beer of disproportionately higher gravity. The different in malt costs from a 4% to a 6% beer could liberally be estimated at $30/bbl for good quality continental Pils malt. This is approximately $.12/pint additional cost. Event at 4x markup for bars and pubs in larger cities, this is a $.50 margin for retail, and with US 2-row pale malt and 3x markup this is more reasonably a $.20 retail difference.
Alan - December 11, 2011 6:36 PM
"The idea of gravity-based pricing displays a fundamental ignorance of the economics of commercial brewing."
I'll let Europe know.
Adam - December 12, 2011 1:04 AM
Certainly those european beer pricing structures aren't based on historical gravity based taxation systems, but I'm sure the monarchists would be proud of your fallacious argument.
Jeff Alworth - December 12, 2011 1:32 AM
Apropos of this discussion, Beeronomics <a href=http://beeronomics.blogspot.com/2011/12/british-beer-prices.html>has a nice post on English pricing</a>.
I think taxation does account for much of the disparity, and I think Adam's right when he points out that the difference is marginal in similar beers. But surely there's a point at which the disparity in ingredients is so great as to affect the actual cost of a beer. Comparing a medium-hopped 4% bitter or porter to a 9% imperial IPA, for example. Especially at brewpubs where the cost of a beer is exclusively the cost of ingredients and labor, not packaging or distribution.
Alan - December 12, 2011 8:30 AM
Adam, you are being a silly moo. As Jeff admits, the US structure is riddled with $6.99 to $9.99 (or more) bombers of 22 oz craft beer that is allegedly based on increased price inputs but which are more often mechanisms for generous return.
Besides, the point is that Kristen English took the position it and apparently practices it. And why not? I was chatting with a brewer yesterday who popped by and admitted the many ways that generous revenue streams are leveraged.
But, given all those primary sources of knowledge, I am sure you are right. We cannot trust them. We have to trust that there is a baseline of session beer pricing that we are told to pay. That is our role, a marketplace of sheep. Do as your are told.
Adam - December 13, 2011 5:38 PM
...
Alan, Kristen is obviously smart and passionate about beer, but...
Alan - December 13, 2011 8:02 PM
Zzzzzzz.... I can't work with such belief systems. Having invested in breweries and having seen their financial reports and having talked with brewers and being a professional purchaser and on and on and on... I think we can leave it there. You have a wish and a dream and I just can follow you down that yellow brick road where the elves who brew beer live. And you have not linked or cited one authority.
Plus, you have a comfort with using tediously superior language ("fundamental ignorance", "your fallacious argument," "the informed argument") and I don't care. You are a stranger who hasn't the decency to identify yourself. So you are suspended from comments.