When New Yorker magazine publishes cartoons about the price of beer and the Wall Street Journal runs front-page stories about high-priced beers, beer drinkers in America’s heartland should start to get nervous. Trend spotters guaranteed higher prices at the moment they labeled beer an “affordable luxury.”
How much should I pay for a beer? Why do some beers cost more? How could higher prices possibly be good?
Face it. The high-end beer segment is where the action is. We’re not only talking about the fact that American craft beers sales were up 7% in 2004 and growing at a similar rate the first half of 2005, but also about imports with similar cachet. The discussion needn’t be limited to beers that cost (yikes!) $1 per ounce or more in restaurants, but may include less expensive 6-packs sold in national park campground stores and even 750ml bottles in neighborhood gas stations.
These beers stayed out of the fray as America’s largest brewers engaged in summer price wars, reminding us they are different and giving us reason to ask a few questions. How much should I pay for a beer? Why do some beers cost more? How could higher prices possibly be good?
Stephen Beaumont — a veteran beer writer and partner in Toronto’s beerbistro, a beer-friendly restaurant — has long advocated higher prices, occasionally ruffling beer consumers’ feathers. He explained why via e-mail:
“To the American consumer in particular, price tends to equal quality. Charging higher prices for beer is a) a means of garnering respect from the average consumer; b) a path out of the cheap six-pack ghetto of mainstream beers and a point of differentiation; and c) a way to reflect the quality of ingredients, rarity and amount of knowledge, effort and risk that goes into the creation of some beers.
“The industry should take its lead from the wine business. All wines are made from crushed grapes, yet there are massive gaps in wine pricing. Ignoring those wines from long-passed vintages, the justifications for the difference in cost are quality of the goods, expense of the vineyards (lower yields, hand-pruning and harvesting, difficulties in irrigation, climatic challenges, etc.) and rarity of the wine on offer. All of those traits are echoed in the production of some high-end beers.”
