LEADER OF THE 4-PACKS – BEER PRICES GET PROBED BY BRENT

LEADER OF THE 4-PACKS

Hobbies cost money, especially those that you love. Some require more than others. But most people have hobbies, so it’s just another part of their monthly budget.

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Look at me for example. One of my hobbies is playing in a band, and as the drummer, my hobby is pretty darn expensive. Sticks, drum heads, cables, and other parts help me maintain my status as a regular at music shops across Houston. Tony buys lots of sneakers, and while he’s always on the hunt for a sale, that gets expensive pretty easily too.

Much like him, I take advantage of promotions to keep my inventory full. Mine is mostly consumables (sticks and heads). So, from a budget perspective, I’m good. But it’s still something I have to keep an eye on to keep in stock.

Craft beer is very similar. Since a lot of it is made in much smaller batches, with ingredients that are often locally sourced or purchased in smaller quantities, production costs are higher. Resale prices are forced to be higher too. That’s the name of the game.

Before my craft days, I remember the days of $6 6-packs and $15 30-packs. If I wanted to splurge a little, I could do it without going nuts.

The singles section at the grocery store began to lure me in with their $1.79 bottles and cans. Great deal if you’re looking for variety, but multiply by 6, and you’re at almost $11 for a 6-pack. Technically expensive but still manageable. (And still something each of us at Beer Chronicle does often – who said shelfie is a derogatory term?!)

As I explored various single bottles, I would find ones that I enjoyed enough to purchase a 6-pack. Those would set me back anywhere from $8-$12. Up there with the 6-pack of singles but this time, you’re getting 6 of the same beer.

Jump forward to today and prices have moved up. S I G N I F I C A N T L Y in some cases. Between the increasing amount of offerings at stores to brewery-only releases to beermail, the $6 6-pack days are LONG gone.

Take away natural inflation and material cost increases, local craft beer still sits on a higher price point than macro beers and even those offered by the biggest craft breweries around the country.

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In the Houston area, the average price point of a 4-pack of a 16 oz. hazy IPA or double IPA from a Houston-area brewery is ~$18. Imperial stouts, collabs, and many adjunct beers can be more expensive.

That’s only $4.50/can. Not terrible, right? You’d probably spend about that much on a pint at the bar and the cans you’re buying will likely have limited draft distribution around town. So, those cans feel kind of exclusive.

When compared to prices around the country, ~$18 is on par. The biggest names in the hazy game are selling cans in other large markets, such as Los Angeles or New York City, for about the same on average.

But we’re also seeing some local prices trending higher, topping off at the $26-$28 price point. Sure, one-off beers can cost more to produce, but where do we draw the line? Are they so much better that we’re willing to pay 30-40% more for the same amount of beer?

Also, most people seldom buy just one 4-pack. I mean, if you’re going to make the trip to the brewery, you might as well stock up for shares, trades, and terrible Mondays at the office.

Let’s round up for easy math. At the $20 price point, 3 packs would set you back $60. Going up much more on those packs moves you quickly towards $70 and beyond, a much bigger pill to swallow.

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To further complicate things, some of those same brewery-only released beers are now on retail shelves at competitive prices. Plus, we are getting more packs from breweries outside Houston priced well under $20.

Let’s take a quick step back, though, and look at the most popular style, the New England IPA. Why are these beers so expensive in the first place?

For starters, hazy IPAs are pricey primarily due to the enormous amount of hops used in production. Citra hops, one of the preferred NEIPA hops, runs about $23/lb. The average amount of hops in one barrel of a hazy IPA is 8 lbs, with one barrel producing roughly 248 16 oz. cans (a little over 10 cases).

Multiply that across a 10, 20 or even 30 barrel batch, and it adds up significantly. And that’s just for hops!

But not all hazies have Citra. Other hops, such as Galaxy (the best hop!), are much more expensive. Therefore, you may see those beers produced less frequently and sometimes priced higher.

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Another driving factor for beer prices is hype and Houston is no stranger to it. The haze craze that has swept the nation is driving up demand. It’s putting a strain on hop producers and substantiating the beer prices being demanded by breweries. Hype’s not just for hazies either. 11 Below sold out of this year’s Coconut Negative Space cans in a few mere hours.

Finally, the desire for new beers from consumers means breweries are continually developing new recipes, experimenting, and ordering all sorts of ingredients. It’s more challenging to buy ingredients in bulk when each new beer has a different list of components.

From one perspective, cans are selling, even at prices well above $20. Now, some single cans are selling for $10 or more!

We’re still seeing secondary market action happening, but the days of big releases selling out are looking like a thing of the past. Between appealing can art (that we’re helping design now), matching glassware, and relentless hype, it’s hard to blame any brewery for demanding the beer prices that they do, but how long is that sustainable? Those of us at Beer Chronicle have drawn a hard line in the sand for what we’ll pay for a four-pack, and we’re far from the only ones.

At the same time, your beer budget can expand quickly, even if you aren’t hitting up every release. Add in tax, presale fees, and gas money, and you’re spending quite a bit on only 64 oz. of beer. As if that wasn’t high enough, some people have to consider tacking on mule fees or Hop Drop shipping costs, and all of a sudden you’re in for $35 for a four-pack or more.

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Yikes.

It does seem like the market is shifting a bit in Houston though, at least at the lower price point. Recently, we’ve seen new beers priced at $16 (with very expensive Galaxy hops), and that’s pretty dang attractive, especially when you consider the aforementioned scale and all the extra costs that come along with keeping a beer fridge well-stocked. Hazy or not, sometimes it’s nice to leave a brewery with a little more cash in your wallet.

So what does this all mean? To begin with, it seems that Houston’s beer prices are in line with the big boys throughout the US. Based on the investments that local breweries are making in additional equipment, plus the new breweries scheduled to open in the next year, brewery owners don’t seem to expect any slowdown.

That’s great news for the industry and for the economy.

But that still means we’re paying prices that support the hype. But how much is too much? Will it last? Will we continue to scramble to every release and request something new every week? The answer varies depending on who you ask, but for many, it’s a hard no. We’ve heard enough complaints from our friends about it to want to put this article together and ask these questions.

At some point the supply will meet the demand, and breweries will begin pricing themselves beyond what the hype can support. Me and the rest of the Beer Chronicle team will be there either way because that’s what we do – we LOVE Houston beer, but everybody’s not as committed as we are.

No matter how you look at it, our craft beer hobby is costly. We love it, and we choose to participate. But we have to pay to play. If prices continue to increase, we may have to get more picky about how often we play or who’s on the team.

Beers to you, Houston

Source:

http://beerchronicle.com/leader-of-the-4-packs-beer-prices/

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