Variable Pricing?
So I had this thought. Why is it that beer isn't priced based on the cost to the brewery except in a very blunt way? If you go to a pub or grocery store, you'll find sixers or pints priced at roughly the same price. There might be a second category for specialty beers on which you pay a premium, but everything else is standardized.
To pull one case at not-quite random: Widmer Hef v. Widmer Brrr. In this corner, WidmerHefeweizen, weighing in 11.75P, 4.9% abv, and 30 IBUs. In the other corner, Widmer Brrr, 17 P, 7.2% abv, and 50 IBUs. For the sake of argument, let's imagine that the Plato and IBU values correspond to ingredients.* The ingredients alone would make Brrr the cost of 1.5 Hefs--if there were additional aging or other methodological complexities, the cost could be twice as expensive. Yet a sixer or a pint of these beers would cost you the same in a grocery store or pub.
I don't know that this is unique to the beer world, but it's odd. Tillamook doesn't charge the same price for its medium and sharp cheddar--it sets prices proportional to costs. So why is it that beer isn't priced proportionally?
I asked Rob Widmer, and he explained their method this way:
Which begs a point Rob already identified: what about brewpubs? They set their own prices and could sell beer at a variety of different points. Why don't they? Is this by convention or because of a business decision? Imagine walking into a brewpub and seeing a chalkboard with the following beer menu:
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*Brewing techies will point out that we can't know the correspondence without identifying the grains and hops, and I grant this. We're running a thought experiment here, though. Bear with me.
To pull one case at not-quite random: Widmer Hef v. Widmer Brrr. In this corner, WidmerHefeweizen, weighing in 11.75P, 4.9% abv, and 30 IBUs. In the other corner, Widmer Brrr, 17 P, 7.2% abv, and 50 IBUs. For the sake of argument, let's imagine that the Plato and IBU values correspond to ingredients.* The ingredients alone would make Brrr the cost of 1.5 Hefs--if there were additional aging or other methodological complexities, the cost could be twice as expensive. Yet a sixer or a pint of these beers would cost you the same in a grocery store or pub.
I don't know that this is unique to the beer world, but it's odd. Tillamook doesn't charge the same price for its medium and sharp cheddar--it sets prices proportional to costs. So why is it that beer isn't priced proportionally?
I asked Rob Widmer, and he explained their method this way:
"For the beers that we focus on (our bottled beers) we spread the cost of more expensive beers over our entire portfolio rather than charging more for some beers and less for others. Our retail customers appreciate this consistency. An example might be a restaurateur who spreads a cost increase in beef over his entire menu instead of just charging more for a burger. However, at the Gasthaus we do charge a differential for more expensive beers."(He also pointed out--delicately, after a boneheaded question on my part--that the brewery doesn't set the price at the grocery store, the grocer does.)
Which begs a point Rob already identified: what about brewpubs? They set their own prices and could sell beer at a variety of different points. Why don't they? Is this by convention or because of a business decision? Imagine walking into a brewpub and seeing a chalkboard with the following beer menu:
Best Bitter $3.50Would this offend you? Excite you? Assuming all were well-made beers, which would you order, and would price be a factor? Hmmm....
Pale Ale $4.00
Pilsner $4.00
IPA $4.50
Imperial Stout $5.00
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*Brewing techies will point out that we can't know the correspondence without identifying the grains and hops, and I grant this. We're running a thought experiment here, though. Bear with me.