Beer Pricing. Up? Down? Follow-the-Leader?

Harry Schuhmacher of Beer Business Daily (subscription-only) has an interesting interview with George Fisher, a craft beer distributor whose territories are Ohio and Indiana.

The always-lovely Harry gave me permission to post a couple of quotes from the interview. The context is a discussion of beer prices that unfolded recently over at Jeff Alworth’s Beevana. I posted links to it here. Fisher’s comments, again, coming from the perspective of a distributor, are fascinating:

Operating in Ohio, we lost about 350,000 jobs in the last few years, and some of my craft guys want to price like there’s a big party going on. I think some brands are getting ahead of themselves. I think there are brands like Bell’s or Stone or Dogfish or Rogue and a few others that really do set the tempo for high prices. And then there is the next level of brands that look at that pricing and say, ‘hey, we should be there too.’ I’m as big believer in pricing there is. I think it sends a message to consumers about quality. And at the top end you should be priced where it’s not available to everybody. But I am concerned that some suppliers who don’t have the reputation in the market are trying to move up to that top tier of pricing, and I think it’s a mistake.

Equally interesting: Fisher’s assessment of the potential for another craft-beer “bubble,” similar to the one that unfolded in the 1990s (which I discussed on pp. 321-332 of my book.)

I can already see — not quite the mid 1990s — but almost there. I get sent a lot of samples of contract-packed pseudo crafts, at a discounted price point, and that worries me. We stay away from those and try to stay true to authentic crafts. But I can see it coming. Some of the more gimmicky stuff. . . . I’m seeing a little of that froth, and I’m concerned about the pricing. But I think the products are better. I’m cautiously optimistic.”

Again, many thanks to Harry for permission to quote.

3 thoughts on “Beer Pricing. Up? Down? Follow-the-Leader?

  1. That is an interesting wrinkle. Wish I knew more about econ. Individual actors and entire segments are separate but linked. If everyone’s “signalling” their quality, then the whole market becomes over-inflated, and the consumer must begin to disbelieve the hype.Wasn’t this part of the problem with the first craft bwewing bubble of the late 90s?

  2. The “beer bubble” in the 1990s was a bit different. It had less to do with people over-pricing or wrongly pricing their beers than it had to do with the appearance of too many people who knew nothing about beer (and, worse, who didn’t care about it) trying to cash in on a trend.Anyone who could round up $ to buy a vat was claiming to be a beermaker and hoping that the cute name (eg, Moose Drool) would mask the fact that the beer tasted awful.I think what’s going on now is a lot of mid-range brewers trying to cash in on the high-end without making a high-end product, if that makes sense.

  3. True, it was a different bubble, but perhaps only in fine texture. But I hope I’m being overly pessimistic. I think the Moose Drool is still in production, btw.

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