Editor’s Note: This sponsored column is written by Nick Anderson, beermonger at Arrowine (4508 Lee Highway).
While cleaning out some stuff around the house last weekend, I found an old price catalog from one of my distributor partners from 2005.
In a blog post earlier this week, I had some fun going through it and seeing what was/wasn’t available at the time (no Bell’s or Founders, for example), but in this space this week I wanted to go in a different direction. With plenty of concern over rising hop prices and the impact they’ll eventually have on the cost of beer, and with the discussion of beer pricing in general ongoing, I thought it might be fun to compare 2005 beer prices to where they are today.
Now, I’m not about to go talking about how much a distributor charged or charges for something: what we’ll do today is compare by what I would charge. The results were interesting in ways I wasn’t quite expecting. Sure, some beers have notably jumped in price: in the 750mL format I prefer, Delirium Tremens has gone from $7.99 to $11.99 per bottle. Most increases are shockingly mild, however–Bear Republic’s 22oz bottles (there was no six-pack production in 2005) have only gone up a dollar, from $4.99 each to $5.99 now. Spread out over nearly ten years that’s actually quite impressive, especially for an industry comprised mainly of small businesses.
What really surprised me was how many examples I found of breweries whose prices have held, or in some cases have even gone down thanks to distributor quantity-deal pricing that wasn’t possible when supplies were more limited. Mainstay beers like Hofbrau Lager and Weissbier remain in the price range to hit shelves at $10.99, but prices of $9.99 or lower are possible with the right number of cases ordered. In the case of Anderson Valley’s six-packs — the Solstice seasonal beers to be specific — while the ‘frontline’ price has increased, it hasn’t gone up so much that the retail price has had to move up from $11.99.
Quantity deals on the Solstice beers helps keep it in its price point, as does the fact that the now-available cans cost less at wholesale than the bottles do. Lagunitas six-packs have held steady at frontline, but quantity deals open up the possibility of retail pricing at $9.99 or even $8.99 per six-pack instead of $10.99 or $11.99.
The trend seems to be moderate price increasing on six-packs, while 22oz or 750mL bottles have gone up more significantly. Bucking that trend is Stone, whose six-packs are notably more expensive now than in 2005, while its 22oz bottles have increased only a little bit (bear in mind, this is before special releases like Enjoy By, RuinTen, the Stochasticity Project Series and others that are more expensive than the core Stone lineup).
Even when a brewery’s lineup has jumped in price overall, today production levels are such that distributors will offer retailers deals to get pricing close to 2005 levels, if not outright matching them — provided the retailer is big enough to take on 50/75/100 cases of a single brewery’s beers at a time.
I dove into this old price book expecting to come out with a column that railed against how much more everything costs now than it did ten years ago, but instead I actually feel better about it than I have in a long time. If anything, retailers of all sizes are now in a better position to focus on beer — for example, I would’ve had to eat a ton of margin back in 2005 to keep up with a Big Box or grocery store on the sale price of Lagunitas six packs.
Today, I can put together a deal with my distributor that brings me a competitive price without having to give up on making anything off of those six-packs — or I can simply carry something else. With larger retailers, pricing on many craft breweries now matches up well against bigger brands, making them more attractive to an audience that continues to grow every year. Sure, there are breweries that are overpriced to distributors, and breweries that are overpriced by distributors, but the market tends to take care of such practices on its own. The system isn’t perfect by any means, but it works better than we tend to think it does.
Bottom line: if beer prices are going to explode, it’s going to be due to a hop shortage and not because the ‘middle men’ are suddenly deciding to gouge retailers and restaurants. If you want beer prices to come down, you’re going to have to wait for state excise taxes to drop; take a look at this excellent piece just posted this week by Tom Cizauskas for more on that. Until next time.
Nick Anderson maintains a blog at www.beermonger.net, and can be found on Twitter at @The_Beermonger. Sign up for Arrowine’s money saving email offers and free wine and beer tastings at www.arrowine.com/mailing-list-signup.aspx. The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.
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