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A Beerfly's view. If you see anything here that seems crazy, click here.

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January '03: Taxes

February '03: Coffee

March '03: St. Patrick's

April '03: Liquor Taxes

May '03: Extreme Beer?

June '03: Screw 'Em!

July '03: RIP, Corner Bar

August '03: Subtlety

September, 2003

Get Out Your Wallet

This is not going to be a popular Buzz. Itís going to sound like Iíve been paid off by the brewers I write about, and Iíll probably get mail about the supposed tons of Ďfree beerí I get (I wish!). But like it or not, itís got to be said:

Youíre not paying enough for beer.

I don't mean you, personally. I mean all of us, including me. We're getting away with increasingly good beer at pretty cheap prices. "Cheap" is relative, I realize. But look at the price differential between mass-produced beer like Bud and Yuengling -- $4 to $5 a six-pack -- and craft-brewed beers -- $7 to $8 a sixer. Now look at the price differential between Sutter Home and Chateau Ste. Michelle, the difference between the sashimi 'krab legs' and hand-picked lump crab meat, the difference between 80% ground beef and porterhouse, the difference between Maxwell House and your local micro-roaster's whole bean Sumatra. Isn't the difference between Red Seal Ale and, say, Genny Cream worth that kind of difference in price? I say yes, and I say craft-brewed beers should start at about $10 a six. I know most craft brewers would agree. 

So why isn't it? Because almost every craft brewer out there right now is scared to raise prices. Listen to what Alan Pugsley up at Shipyard in Portland, ME said when I talked to him back in May. Alan's been involved with New England brewing since 1986. "It was $5.99 a sixpack then, itís about $6.99 now," he said. "A big place like us or Harpoon can probably get away with an increase. Even $7.49 regularly would offset some of the cost increases (There have been big increases in the costs of health benefits, glass, and energy for firing the kettles, not to mention the record-setting bad barley harvest last year). But the marketís going to have to determine that. If Shipyard decides to raise prices, what does that do to our cash flow when the sixpack next to it is $2 less?"

Keep in mind that the New England market is one that went crazy with discounting in the mid-1990s, when craft brews went as low as $4.50 a sixer. It killed Catamount, stunted the growth of Otter Creek, and killed some Massachusetts breweries. But Pugsley's right: if Shipyard and Harpoon went to $7.50, someone else would be crazy enough to try to grab some of their volume by lowering their price, and discount themselves right out of existence. But they'd do damage to other micros on their way out by convincing people that craft brewed beer should be cheaper.

It's not just New England, either. You know that. How many markets have Sierra Nevada or Sam Adams for under $7 a sixer? Lots of them. How many of you look at an $8 sixer or a $28 case of beer, and think, "I dunno, that's kind of high." 

I gotta ask you, pal: High for what? High for sop-'em-up suds, yes. High for excellent beer? You cheap booger. What do you pay for a decent entree in a restaurant: $10, $15, $20? And you won't pay that for a good six-pack of beer? How can you figure that the same six-pack of Sierra Nevada you paid $6 for in 1990 should be $6 today? Remember what gas was in 1990? Remember what you earned in 1990?  

But really: why should you pay more? There are some excellent reasons. How about a really human one to start with: most brewers don't make squat. Except for the lucky ones (who are not always the really good ones), brewers are scraping along on wages that would make a parochial school teacher laugh. They say the passionate brewers are the greatest ones; it's because if you don't have passion, you'd have to be insane to work for those wages when you have a degree in biochemistry and a family to support. More money for the beer you love to drink means more money to keep the better brewers in the business.

Here's another: survival and growth. For the craft brewers to get big enough to spend the kind of money they need to survive in their own markets, let alone expand, they need bigger profit margins, more cash to spend on advertising and promotions. "If you brew it, they will come" makes a nice mantra for starry-eyed start-ups, but even idealists realize by now that it takes more. You need attractive packaging, you need a real website, you need point-of-sale, you need cool taphandles, you need T-shirts and pint glasses and stuff to give away at promotional nights, and you need money to pay the smart, creative people who come up with that stuff. 

That may sound like marketing garbage, but it's real. It's not just how the megabrewers do it, it's how the imports and regionals do it. Yuengling is okay by me, I'm a big fan of them and the way they came back from the brink, but they are killing the craft brewers in the markets outside of PA, where the craft brewers aren't used to dealing with their kind of market assault. Some more money would give them a fighting chance...just like it did for Yuengling, whose prices have definitely gone up.

Here's another reason: because it's better. How many bad beers have you had lately? A lot fewer than you used to get five years ago. Brewers are better, wholesalers and retailers are better, the whole process is better. Brewers have got the process down, they know how important consistent, fresh beer is, and they're working hard on it. Wine drinkers pay more than we do for their tipple, and they know that 5% of what they buy is going to be corked! We're closing in on that kind of consistency, and there's no reason why beer can't surpass that 5%.

Do I want to pay more for beer? Of course not. I can't just go out and buy anything I want now; higher prices would mean more decisions to make. 

Do I like the alternative? Not at all. If the price of craft brewed beer doesn't go up soon, you're looking at brewers cutting corners, pulling out of markets, closing. More ominous is the sure rise of a few bigger brewers that will push others out of the market: Sierra Nevada, Sam Adams, Widmer, New Belgium, Mass Bay, Alaskan, Redhook, Great Lakes, Deschutes, Goose Island. Good brewers all, good people, but this whole thing was supposed to be about variety. If your local brewers can't pay themselves a decent wage, they're going to go into some other business. If costs rise, something may have to be cut, and you can bet some places will cut something stupid, like the lab, or they'll discount prices further.

What to do? I know I always try to come up with a take-home assignment for you in these editorials, but there's not really anything you can do in cases like these. Except to open up your wallet and keep buying. If you like the beer, it's only fair.

I'll fight tooth and nail against another dime of beer taxes. But when the money's actually going to the brewers (and the wholesalers and the retailers), the people who are doing the real work, brewing, shipping, storing, selling, keeping, and displaying the beer...I'm willing to go a couple bucks more.

How about you?

 

Copyright © 2008 Lew Bryson. All rights reserved. 
Fee required for reprints in any commercial media.
Revised: October 31, 2003