Category Archives: value

Craft Beer: More Costly. Better Value.

When spending more makes sense.


To borrow from Sam Calagione’s business philosophy in Brewing Up a Business, it strikes me that education has to be a very large component of the expansion of the craft beer movement beyond the realm of the enthusiast. One reason that the consumer needs to be educated is because craft beer costs more, on average, than industrial commodity beer. If the consumer merely sees “Beer 1” and “Beer 2,” and Beer 2 is cheaper, then the rational decision is to buy Beer 2. Aside from price, the consumer doesn’t know the difference between the two products. Beer is just beer.

The craft beer community must continue its efforts at education in order to give the consumer a reason to buy Beer 1 where Beer 1 is the pricier craft beer and Beer 2 is the industrial commodity beer. The question then becomes what sort of education is necessary, or desirable. Now let me stop here and acknowledge the fact that there are plenty of people who will never be ardent craft beer drinkers. That’s fine. I don’t judge them negatively. If they like to drink Bud Light that’s their business. All I will do is kindly tell them that I think there is beer out there that is a better value, even if it costs more. If they choose to inquire further, then I am more than willing to explain myself.

Also, I will acknowledge that for some, beer is merely a means to a drunken end. That’s also fine. As long you don’t hurt anybody but yourself I couldn’t care less. I will however advise you that there are cheaper and more efficient means to reach your desired result (read: clear liquor).

I suppose craft beer education for me comes down to a single concept: value. Every effort at education must be geared towards letting the consumer know why craft beer is a better value even though it’s more costly, perhaps even because it’s more costly (two italicized words in one sentence, eek!).

Why do I find craft beer more valuable than industrial commodity beer? First, craft beer has personality. I don’t just mean the hop-related pun names or the label art or the fact that the beer is generally more flavorful. What I mean is that there are people behind craft beer, rather than mega-corporations whose main goal is to raise their stock price. Where craft beer is your local restaurant whose owner cares about the food coming out of the kitchen, industrial beer is McDonald’s, a faceless entity churning out low-cost, low-flavor food designed more to make money than it is to satiate. In other words, part of the value of craft beer is knowing that my dollar is going to a person who cares about what they make.

Another portion of the value quotient is enjoyment. As I said above, if your enjoyment is derived solely from getting blitzed, there are better ways to “enjoy” (and they’re cheaper too). However, if you care about the contents of your glass and want to drink something that not only slakes your thirst, but dazzles your tastebuds, craft beer, almost regardless of cost, is a higher value proposition. Here’s how I explain it. Let’s take a six-pack of Budweiser and a six-pack of Deschutes Black Butte Porter. Each sixer contains 72 ounces of beer and roughly the same amount of alcohol (making degree of possible intoxication a nullity as far as decision-making goes). Let’s say Bud is on sale for $4.99 a six-pack and Black Butte is going for $8.99. I’m buying Black Butte every time because I derive greater value from Black Butte.

I will not enjoy a single ounce of that Bud sixer. Thus, every cent of that $4.99 is flushed down the drain as far as I’m concerned. However, I am virtually guaranteed to enjoy every ounce of my $8.99 sixer of Black Butte. Thus, it is a much better value. Beer is a luxury, not a necessity. No one needs to buy beer to live. So, if you’re going to spend money on beer, shouldn’t your dollar go farther? If thirst-quenching is the motive, buy a soda. If getting drunk is your motive, buy hard liquor. However, if your goal is to truly enjoy the beverage in your glass (and maybe catch a little buzz, which I willingly admit is quite pleasant) then your money is better spent on craft beer than industrial beer.

“But Alex,” you say, “I can get twice as much Bud as I can Black Butte.” I say, you’re missing the point. When drinking a beer with full flavor, satisfaction can come in a few ounces, rather than a few bottles. Greater enjoyment of the beer itself makes the beer a better value and also argues for more moderate consumption.

Let’s say you agree with me that craft beer tastes better, but you still can’t justify the cost. I would answer that good ingredients, and more of them, cost more money. You don’t expect to pay the price of a gourmet burger at McD’s. And why not? Because the components of the burger are of a lower quality and the labor to make the burger was cheaper and McD’s has no ambience and no personality. The same is true of your beer. Industrial beer is often made with one of the cheapest commodities there is in America: corn. The government subsidizes corn production to the point where farmers have no choice but to grow it. Since the price is artificially depressed, it makes a great substitute for barley; that is, if you don’t really care what your beer tastes like and you’re merely trying to capitalize on economies of scale.

Craft beer on the other hand, makes a point of using the best ingredients. Craft brewers must take this approach in order to ensure that their beer tastes good, because they can’t compete on price. Do some of them use corn occasionally? Sure. But they do so because it helps them achieve a certain flavor, not because they want to produce their product as cheaply as possible. They also generally use a helluvalot more hops than industrial brewers. Hops are expensive, but they contribute oodles of flavor and aroma in the hands of a talented brewer. Craft beer thus justifies its cost many times over.

So you say you can’t afford craft beer all the time and you want some booze in your life. That’s fine. Grab a handle of vodka. Take a few shots. Problem solved. Way cheaper per ounce of alcohol than buying industrial beer. However, if you aim to truly enjoy the product in your glass (and catch a little buzz), then buy craft beer (or fine spirits, which I also enjoy; pick your poison). You’ll spend more money, but you’ll get a better value.

More Information. Smarter Consumers. Better Beer.

In this article, Budweiser is quoted as attempting to re-attract the under-30 crowd through the offer of free beer. They even have a catchy slogan: “Grab some Buds.” Perhaps this is meant to evoke a feeling of camaraderie in the consumer. It seems Bud wishes to create some sort of Pavlovian response which tells the drinker that it must be a good time with friends if one is drinking a Bud.

Foolish attempts at image marketing are something I’ve recently discussed at great length with close friends. Granted, these friends share a great number of my opinions, but they’re also very smart and are also members of the under-30 set (for the most part). We’ve come to an interesting consensus.

Those of us in the target age range have basically had the internet at our fingertips for our entire adult lives. Over that time, we have learned to use the internet as an informational resource. Further, we have learned to avoid the pitfalls of sourcing one’s information from the web. As a result of the availability of at least quasi-accurate information, our bullshit meters have gotten a lot more sensitive.

We look for products that appeal to us due to their quality and value, not due to the image their marketing projects. It is this writer’s opinion that this phenomenon stems largely from the fact that looking for such products is far easier than it used to be. I loathe the term “crowd-sourcing”, but it has allowed younger and older folk alike to find the opinions of like-minded people and base their purchasing decisions on those same opinions.

The availability of information also democratizes the marketplace to a higher degree. People need no longer be satisfied with the products thrust in front of them by ad men who work for the highest bidder. Easy information means it’s easy to find alternatives to mass-produced, mass-marketed, low-quality goods.

And so it is with beer. There are few industries that have used the internet more effectively to raise awareness than the craft beer industry. Just look at the Monster Energy fight with Rock Art Brewery a little while back. The beer geeks of the world rose up against a large corporation and beat them back with an e-stick. People are increasingly aware that there is something better than [insert industrial macro-lager here] because it is easier to tell them so and it is easier for them to find out.

Since more people know that there are vastly more flavorful and higher-value alternatives to products like Bud, Bud’s advertising has become increasingly more offensive to the intelligence of the under-30 consumer-with-disposable-income that they’re going after. When people are buying for taste and value, image matters less and less. While the ads are very clever and even enjoyable at times, they have become less effective at driving sales. Yet Budweiser continues to sell an image, rather than a product. And Budweiser market share continues to ebb, because people want to buy something from a producer that cares about what they make.

Nowhere is the difference more palpable than in beer. When one sips an artfully crafted beer such as Victory’s Prima Pils next to something like MGD, there is no contest. The former is clean, spicy, crackery and delightfully bitter. The latter tastes like carbonated urine (or at least what I imagine that would taste like). This comparison is precisely why I think Bud’s free beer “strategy” will ultimately fail.

Offering a free taste of something fundamentally untasty seems like a poor business decision to me. Just because you hand me stale bread for free doesn’t mean I’ll suddenly become hooked on it. I assume that is why Bud needed a snappy title such as “Grab some Buds” in order to sell the “event.” More and more people are finding out that, in terms of advertising and product quality, Bud and its ilk are the McDonald’s of beer. You drink it when you don’t care about flavor or quality. So here’s to Bud’s ad strategy continuing to fall flat on its face. Further, here’s to the internet providing easy self-education and thereby spreading greater consumer intelligence, higher-value products and allowing people to avoid a massive…