Beer Pricing: A Little Less Hyperbole, Please

In my morning edition of The Globe and Mail newspaper yesterday, wine critic Beppi Crosariol wrote about the Sam Adams Utopias, Boston Beer’s high-end, high-alcohol, outrageously complex beer, the tenth anniversary edition of which has just come up for sale in Ontario at a price of $114.95 for the 710 ml bottle.

While he does a pretty good job at describing Utopias and placing it within the current state of beer and brewing culture, Crosariol does get a little hung up on the beer’s cost, variously employing such phrases as “nosebleed prices,” “exorbitant prices” and “stratospheric prices,” and comparing it to “Rolex watches and Prada purses.”

Really?

A Rolex goes for tens of thousands of dollars, and although I know nothing about the cost of Pradas, I’ve got to assume by dint of their reputation that they hit the same sort of price points. So how, pray, does that equate to a $115 bottle of beer, one which is intended to be consumed in small potions over days or weeks, rather than minutes or hours. Or, in other words, more like a single malt whisky or cognac than a Coors Light or Bud?

To answer that question, or at least further the debate, let’s take a look at what it all means. The last time Crosariol wrote about something to be sipped and savoured over a lengthy period of weeks or months, the Balvenie 17 Year Old Double Wood, he described the $167.95 bottle as “expensive.” Not stratospheric or exorbitant, just expensive. Before that we had the 15 year old Nikka Miyagikyo with nary a mention of the cost, despite the Japanese whisky’s $189.20 price. So, double standard?

Now, how about breaking down the cost of Utopias on a per drink basis? There are 24 ounces in a bottle and, at 29% alcohol, a generous pour would be about 2 of those ounces, making for a dozen total servings. Do the math and that comes out to less than $10 a serving, or about what one might pay for a glass of ho-hum wine in a restaurant. Still stratospheric? I think not.

By coincidence, on the same day that Crosariol was simultaneously adulating and excoriating Utopias, Clay Risen was over at the New York Times bemoaning the rise of big bottle beers, suggesting that, counter to every indicator imaginable – store sales, restaurant sales, brewery sell-throughs – there is some sort of backlash brewing against “expensive” 750 ml bottles of beer.

Jay Brooks does a thorough job of dismembering Risen’s story here, so I won’t go much into it myself, but in keeping with the tone of this post, I would like to take a moment to address the supposed price-based revolt.

At a high of $30 in stores, these beers are in the same price class as many wines, including a good number that lack complexity equivalent to the best of such brews. (And to be fare, many that provide equal or better value.) Yet it would be a brave writer indeed who took issue with $20 – $30 wines as a group, implying that drinkers are sick of such high prices and long for a return to jug wine. Which is not to say that I in any way agree with Risen’s characterization of the emergence of 750 ml bottlings of beer as being part of “what is being called the “wine-ification” of beer” – really? By whom, exactly? – but rather that I see no reason to discriminate against beer simply because you can still buy a twelve-pack of Bud Light for ten bucks.

And as for those individuals interviewed by Risen who suggest that they recoil at the notion of sharing their big bottle of beer with anyone else, I have but one piece of advice: Grow up!

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37 Comments

Filed under beer prices, drinking quality, beer blogs, "extreme" beer

37 responses to “Beer Pricing: A Little Less Hyperbole, Please

  1. I have to admit, I fall into that pricing double-standard trap. I have paid $125 for a fifth-growth Bordeau and considered it good value. But when I pay even as little as $10 for a 750-ml bottle of ale, I gasp.

    We need to change people’s attitude towards exceptional craft beer, and I hope that your post is the catalyst to that change.
    Cheers!

  2. All those headlines about Utopias selling out in a couple hours of phone in only ordering would suggest to me that it was under priced by half.

  3. With greatest respect and a deep bow to my west, that is a bit thin logic. The $30 is the freak of the beer world and deserves quite a back story to justify it especially give quality competitors. Then the market of consumers (in a demand side economy) decides. Given that there is pressure from one end of US craft beer to make or maintain craft beer as a supply side market, it is good for these sorts of stories to hit big media.

    I probably have little interest in the Utopias portion of the discussion except to note that other than as maybe an illustration of that the market can create, my money would march to good fortified wine well before buying the product. But when a run of the mill brewer like Dogfish Head is aiming at the $30 buck a bottle range, the real message is (as it always should be) buyer beware. I agree that the bottle is something of a side track but the costs passed to the consumer are not. And the well informed consumer is quite aware of the limitations of overpriced beer and the vast selection of similar or even superior beers at a lower price.

    So rather than “grow up” the right message is “speak up!” And that includes you, Mr. B, in your defence of these practices. We need discourse not indignation, mock or otherwise.

    • stephenbeaumont

      What took you so long, Mr. McL? That post was up for over an hour before you commented!

      You may prefer a fortified wine to the Utopias — in certain circumstances I might as well — but that does nothing to discourage my comparison. Basically, in placing Utopias within the same context as Coors Light, which he does in the second paragraph, Beppi compares apples to oranges. My point is that the comparison is not valid.

      I am fully on board with buyer beware, sir. Some beers are worth $20 or $30 a bottle, others are not. Same with wine, whisky, gin — I’m looking at you, recently “premiumized” Plymouth Gin! — rum, etc. What I object to is the tarring of an entire price category with a single brush stroke.

      And as for the “grow up” comment, that was in reference to the “many beer drinkers” who are “uncomfortable” with the idea of sharing a 750 ml bottle of beer. That is just childish behavior.

  4. I have a job to do!!!

    I agree with the Coors Light false comparison which was I had hoped implicit in my reference to something like a vintage port for 2/3s of the price. The tarring of the category, however goes both ways. Too often we face if not the polished turd when the $20-30 dollar beer is opened but an 8.99 bomber beer or one that fails. The “format” (to borrow from Dogfish in the Risen article) in fact conveys nothing but heightening the need for buyers to beware. Suggesting that it conveys quality is as bad or worse than tarring with a single stroke – worse because it conveys presumption.

    PS: I gladly share. But so few visit. Drop by. The onion seedlings are coming into their glory.

  5. I read that article yesterday too and felt pretty much the same way Stephen writes. Mr Crosariol might have been even more mortified by the Newfoundland pricing of $199.99 per bottle. Not that he would have gotten one as the rep had an allotment of only 12 bottles that were all bought by the first two people he emailed. A little research into provincial price discrepancy returned that the LCBO was selling their Utopias at a loss? Congrats to all of you Upper Canadians who got a bottle for such a nice price.

    In response to sharing 750 ml bottles, I fall into the same boat as Alan: I have very few visitors to share with, so I also extend an invite. (Sorry, no onions)

  6. Thanks for this Stephen. Although I wish I could say that it baffles me, realistically it just frustrates me that people still see all beer as the single image projected to them by some of the world’s largest beverage enterprises. All the higher priced beers, large format bottles, and myriad of breweries and styles surely should be proof that beer is more varied and complex than they have been led to believe… No… Somehow all the saisons, barleywines, rauchbiers, dunkels, india pale ales, barrel aged stouts and more all get lumped together as a six-pack of bud… Whats worse, is that people in love with wine, spirits and food can think this way.

    Great article. Cheers!

  7. Gary Gillman

    Speaking of sharing, I recall your own generosity, Steve, in offering what was I believe the first release of Utopias at a tasting at your place about 10 years ago. At the time, and probably more so now, it was akin to a rich sherry or even brandy. Considering that a young vintage port, or even a colheita, must go for at least 100 smackers at LCBO the price of the current Utopias seems not out of line especially as it contains some aged reserves. I think too the Globe writer’s comments about how much light beer you could buy with the same money were rather unfair, it gave the impression, or to me anyway, that all beer is still “beer”.

    On the other hand, I wouldn’t buy this beer except perhaps at a restaurant where four or six could share it. I am sure it is very good but there are rich beers I can buy for much, much less that I think I would enjoy more.

    Gary

    • Just as an FYI, young vintage port or even a colheita can be 30 to 60 bucks for 750 ml at the LCBO which is why I pointed out that this was arguably out of line, Gary. Here are some examples of Warre’s line and the associated pricing. Hey, vintage 1983 is 2/3s of the price.

  8. Gary Gillman

    Good point Alan, I recall Warre’s generally being on the lower end of the price range in vintage ports and e.g. Graham and some other names are higher, but point taken. (It sounds too like vintage port is a particularly good buy these days possibly reflecting the stronger Canadian dollar!). It’s a lot of money, yes, but considering the reserves in it, the package too (probably a lot of coin went into its design and materials) and the small quantity made, what they are asking still broadly doesn’t seem that way out to me. But again it is not something I would wish to buy. Many better alternatives in the market both in other drinks and beer itself – IMO.

    Gary

    • You bet! One of the best things about the LCBO is there is a particularly good range for price and quality on a lot of these sorts nippy sweetie drinks. Madeira, sherries, ports, brandies and calvados all at reasonable prices. Which leaves Utopias in a bit of a spot. But that spot is filled with eager nerds with money to burn who know nothing of colheita from manzanilla. Yet, without that knowledge, how can they understand whether Utopias is well priced or even worthy?

      • stephenbeaumont

        That’s really startlingly dismissive, Mr. McL. “Eager nerds with money to burn”? Why not eager enthusiasts who see it as a unique opportunity to buy a rare and critically-lauded beer? (I know the “critically-lauded” part to be true, since I’m one of the critics who have lauded it, based on tastings of multiple vintages, I might add.) Just because some would see value where you do not doesn’t mean they are “eager nerds.”

  9. Surely not startling. Surely you would have expected this of me. Would it not be more the case that you should have written “this is the sort of rubbish I have come to expert from you?!?!”

    See, I don’t know how rare this is and have noted it being slightly beyond criticism due to the nature of its roll out. Are its production levels kept low to create and inflationary pressure? I don’t know. Have you asked? Has anyone asked how long it will be until they can up production to lower costs so more people can enjoy it?

    And, I say I say, how is its pleasure in complexity compared to other complex pleasurable things? Even if you are yet to make it I take your point entirely that it costs twice as much as the four tickets I bought for Fenway in AUgust and would last longer than the game against the Yankees. But that is the point. Value and pleasure are relative. So we need to describe such things in full context and based on the best information available – which is why we need to speak up about such matters.

    Plus there is nothing wrong with eagerness or being a nerd. Even if they have lots of cash. You should see my map collection. Spent an armload on that. Now that is the making of a real nerd.

    • stephenbeaumont

      I made the erroneous — or so it seems — assumption that you would have read Beppi’s column. Seventh paragraph: “Once fermented, it takes a long detour through the land of brown spirits, maturing for years in a variety of oak barrels, in this case ones that previously contained bourbon, port and rum. The blend is assembled like Cognac or Scotch, from multiple casks spanning various years. The current 10th-anniversary edition contains a proportion of beer that had been aging since 1992.”

      It’s rare because there are only so many such barrels, and likely to remain so because there is only so much space the brewery is able, or willing, to devote to it. It may be $115 at retail, but I’m willing to bet the brewery makes a better margin on their Boston Lager.

      • See, that is not a response. I could accuse you of not doing, thinking, understanding or otherwise being subject to conflicts of interest. But, thankfully, I don’t.. Yet I know you know that production could be expanded. The idea that “there is only so much space the brewery is able, or willing, to devote to it” is just this side of silly given the deep and expanding financial resources this craft brewer has at its disposal.

      • stephenbeaumont

        That wasn’t an accusation, and I apologize if it came across that way. I had a pig of a day yesterday and was probably getting testy near the end of it. My point was that the barrel-aged beers play an important role in this beer, and as with the expansion of single malt whisky production, it takes time to build reserves. If Boston Beer puts down more barrels of the component beers, as they may well be doing, then production can be expanded ten to twenty years down the road.

      • I know it was not an accusation. You and I are quite well between us. And you know and I hope all others appreciate that this is 47% performance art when you and I banter. It is 49% exploration of these good ideas and, yes, 4% being snappy for shits and giggles, too.

        So, having said that, I did and do expect the expansion to take time but I expect Boston Beer to be years into that expansion mode already as they should be anticipating demand increasing due to their own perceived excellence of the product. I would be quite curious to know if they are not and if they are not why they are not.

  10. The average beer costs about two bucks (US) per bottle. I suppose you could quibble and say that the average price of a 22 oz/750ml bottle is, what, 8 bucks? Fair enough. That puts Utopias at a bit over 14 times the price of the average bomber (58 times the price of the average beer). I don’t know what you’d say a beer would have to be priced to be “exorbitant,” but that fits my rough definition. (Alan is not a big fan of dictionary definitions in comment threads, but it fits that, too.)

    The average bottle of Scotch goes for what, $25, $30? Would you not say that a $350 to $420 bottle of Scotch was exorbitant? What about $1450? My point is that you gotta compare beer to beer, not beer to Scotch. A pair of Prada shoes look like a trifle compared to a BMW, but who cares? Compared to Walmart tennies, they’re outrageous. Utopias is the Prada of the beer world.

    Apples and apples, please.

    • Jeesh… just when you think you don’t like people making their arguments for you…

    • stephenbeaumont

      Apples and apples indeed, Jeff, and if I were inclined to sit down and drink a bottle of Utopias in one sitting, or even do so with with a friend, comparing it to a Sierra Nevada Pale Ale would be valid. But that’s not the way Utopias is intended to be consumed, hence the lack of carbonation and replaceable screw-cap top. No, it’s meant to be consumed in small portions over a period of time, hence the comparison with Scottish single malt.

      And no, a $400 bottle of Scotch is not exorbitant. When reviewing one, I might comment that it is a little pricey, but I wouldn’t say exorbitant or nosebleed or stratospheric. Not at all.

      • I think you’re attaching a judgment to the word I don’t see. I’m not outraged by the price, but I don’t see how you can say it’s anything but exorbitant. It “exceeds the customary limits in amounts,” to paraphrase Webster’s.

        What would a beer need to be priced to merit a Beaumontian “exorbitant?” Is there such a limit?

  11. Gary Gillman

    Jeff, how would you factor, if at all, the 30%+ ABV?. The average ABV of the average bomber surely doesn’t exceed 10% and perhaps is under by a couple of points. I’d think the multiple of 14 you mentioned viz. the average bomber price should be adjusted for the huge ABV of this beer.

    Gary

    • I don’t because the market doesn’t. I know that the process to freeze distill a beer is ungodly expensive, so that’s where I think the price comes in–and as a buyer I would account for that. But a gueuze may be 6% and three years in the making–also a damned expensive beer to make.

      • But that is the same process as ice ciders we have around here and they are in no way jacked because of the freezing machine through which they are processed.

      • Gary Gillman

        Right but I meant not in the sense of the producer incurring greater cost to make such a high alcohol beer, but of the consumer getting in effect the equivalent of 4 or 5 standard ABV beers in that one bottle. Like if I drink a 12 oz 10% ABV beer, I always figure I’ve had two standard drinks from the standpoint of how much alcohol I take in so I really look at the cost as half of the bottle price so to speak.

        Gary

      • stephenbeaumont

        To further your point, Gary, I know we would both expect to pay more for a cask-strength whisky than we would a 40% or 45% one.

      • We’re off in the weeds here, but I do wonder if it’s more expensive for breweries. I was talking to Jurgen Knoller at Bayern recently, and he described what happened when he tried to make an eisbock. It was just a simple one-freeze process, and he still blew out his electrical work trying to freeze the beer. It ended up taking weeks longer and cost him a mint. I don’t have any idea what freezing cider is like.

      • stephenbeaumont

        The ice cider process is actually quite simple: Harvest apples, leave outside in a large bin until frozen, press, ferment. The not inconsiderable cost is obviously in the much lower yield, same as with ice wine.

      • Not the freezing equipment process I’ve seen but I suppose old style apple jack possible, too.

      • Hey look! I don’t know what I am talking about. I recall an operation in Haldimand Co., Ont that froze the apple juice with a big whacking machine but you are right – that is a big no no now: http://www.vermontagriculture.com/buylocal/documents/Making_Vermont_Ice_Cider.pdf

      • stephenbeaumont

        *Resisting temptation to express complete lack of surprise at the fact you don’t know what you’re talking about*

        The two operations I visited in Quebec, including originator La Face Cachee de la Pomme, both used the big bin of apples in the cold method. La Face even has (had?) one label made from apples that would actually freeze on the tree without falling. They said it was a variety of tree that was on the property when they bought it and that they had no idea what it was.

      • Further… was also unaware that some Quebec ice cider was aged on wood. Picked up a couple today in the name of science.

  12. I find it a bit amusing that you guys are into this price discussion with many arguing that the price is too high yet the price you’re using might just be the cheapest retail price in North America? Why don’t you stop for a moment and consider just how lucky you are to have that?

    I like the port comparison, go price a bottle of Scion and then ask yourself if the Utopias is expensive? For us only 7 bottles of Scion came to Newfoundland and you will pay more for an ounce than you will for the afore mentioned Samuel Adams in the one restaurant that has it; who cares?

    Sorry, I know nothing of colheita, then again up until fairly recently I knew nothing of jenever either, so what? I still know how to enjoy a beer when I have one in my hand.

    Price be damned, I’m looking forward to my first opportunity to actually taste Utopias and thankfully that time will be soon.

    • Brian Mc

      Errr production of Scion can’t be expanded, that would be an apples to t-rex filet comparison.

      • Yes, I do know that and yes your t-rex filets to apples comparison is apt. I just couldn’t help making the mental leap. I think that filet might be a little tough when you find it.

  13. I really don’t understand the indignation. When something like Utopias becomes available, I take a look at the price and decide whether or not I can justify the purchase. In the case of Utopias, the answer was no. In 1994, $110 for a case of Sam Adams Triple Bock got a yes.

    Every purchaser makes a similar decision. Clearly, since Utopias is selling, the price is not excessive. That’s how markets work.

    • Clearly, supply outstrips demand. That is how markets work. Whether the price is excessive is not defined at all at this point. Note how the Newfoundland market worked in the comments above. There were two purchasers sold a total of 12 bottles. Limited diffused supply is not the open market, but a controlled one. It would be interesting to see where price would settle were a tightly controlled supply not part of the planning.

      You can play this game in the penny stock markets. When no one is buying a multimillion share company on any given day, offer your few shares low and it will sell. The marketplace will send out the news that the corporation is at risk. Low volume transactions are manipulable and as a result not that indicative.

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