On an Atlanta beer listserv in early April, a conversation about the pros and cons of climate-controlled distribution and its effect on craft beer prices pivoted into a more general thread about whether or not said prices are rising at a rate that is incongruous with the rise of beer-production expenses. Like any great listserv, this one is a combination of invaluable niche-topic information and opinions of people who are incredibly passionate about said topic. As a result, threads often spin out of control, changing subjects altogether or sometimes they become devoid of a point entirely. So it wasn't entirely surprising when this thread, ostensibly about refrigerated units carrying beer all over the country, started examining the following question: Are craft beer prices out of control? Eric Ohnemus, a 50-year-old computer programmer/systems analyst and Atlanta resident of 17 years, got things started.
"My opinion is that the cost of beer is ridiculous already," Ohnemus wrote. "Paying $9-$20 for a six pack of beer is outrageous. Bomber prices are even worse."
I got in touch with Ohnemus to flesh out his thoughts. He first noticed the price escalation a few years ago, when grain and hop shortages started driving up the prices of those commodities. But Ohnemus points to the fact that craft beer was also gaining popularity and larger markets. He doesn't think the added expenses justified the end price, but then again, it's hard to say. "Terrapin Rye Pale was a staple beer for me," he says. "When I first started buying it, a six-pack cost $5.99. The price went up to $6.99 after the hop and grain shortage. The same beer now costs $8.99. That's a fairly substantial jump for what I consider a session beer. What's causing this type of price increase? I don't know. But I am not buying or drinking as much as I did in the past because of this."
"Making beer is an extremely expensive operation," says Crawford Moran. Moran should know, he was an avid homebrewer for years before founding Dogwood Brewing in 1996. Following that company's dissolution due to distribution issues, he co-opened 5 Seasons Brewing, for which he still serves as brewmaster. "It ain't cheap. We're also one of the most heavily taxed industries in the country. We pay an insane amount of taxes. That's just one part of the cost equation, but commodities have increased, steel has increased, insurance rates are skyrocketing, energy prices have increased, water in Atlanta has increased, etc. At a certain point, breweries — like any other business — have to pass higher costs on to consumers. So far, I think beer pricing has been kept in check for the most part."
As a relatively young person — with no children — who loves craft beer and writes about it regularly, I don't spend a lot of time worrying about the amount of money I spend on it. I don't wear fancy clothes and I don't spend extravagantly on gadgets or most other luxuries, so the money I spend on craft beer fits into that portion of my disposable income. Not to mention that writing stories like this one gives me an excuse ("It's research, maaaan ...") to spend a little more than maybe I should sometimes. As such, I've happily dropped down $20 or more for a single bottle of beer in a bar or a retail shop on more than one occasion. To me, it's about trying something new, expanding my palate, seeing if the latest limited release is worth the hype or not.
I'm not alone, either. In a Salon.com story even more hyperbolically titled than this one ("Can beer save America?"), David Sirota begins, "The grand unifying theory of the American consumer has been that we are, first and foremost, low price fetishists." After wading through various examples on both sides of the quality/price spectrum, such as Walmart, Apple, and Philips, he lands on the macrobrew versus microbrew battle, noting how craft brewers have seen big increases in overall year-to-year sales (15 percent in 2011 alone) while only owning a minuscule 5.7 percent share of the entire beer-market volume. His conclusion? "Contrary to previous trends, a growing share of consumers are willing to pay more for less, as long as the product is the comparatively higher-quality product that craft brewers provide."
"The fact that our country is in an economic downturn and the craft beer world is growing out of control surely has some traditional economists scratching their heads," says Nathan Berrong. Berrong, who writes his beer column, Berrong on Beer, for CNN's Eatocracy blog, thinks this should be a point of pride for craft beer enthusiasts. "It's exciting, and something every beer drinker, or even American, should feel really good about. It could be the catalyst of America getting back its reputation that we care about what we do and the products we make."
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