musing

Beer pricing: Old Rasputin vs. Old Rasputin XII

North Coast Brewing barrel roomWelcome to my fool’s errand.

Last week in the responses to my “The business of beer” post I started a quick exchange with Alan McLeod. I made a reference to a Beer Advocate thread I didn’t have a link to at the time and Alan asked another question I started to answer off the top of my head before I decided collecting a few more facts seemed in order.

As a result I’ve got a mess on my hands. I still don’t really have a definitive answer to to Alan’s questions/statements because it likely doesn’t exists.

So here are the facts. Do with them what you want. (I have an opinion, expressed at the finish).

This began with a fair enough question at Beer Advocate about if Old Rasputin XII from North Coast Brewing — a version of its popular Russian Imperial Stout aged in bourbon barrels — is worth $22 for a half liter bottle, and the responses were interesting if at times curious. I was struck by the logic in a couple of them:

Old Rasputin is a relative bargain in the world of imp. stouts. That makes the pricing of the BA version all the more aggravating. $22 for 500ml?

And . . .

The pricing always left me scratching my head. I understand BA beers cost more to make but you’re talking one of the cheapest RISs out there thrown into some barrels. I know there are cheaper BA RISs where the original version is twice as much as Rasputin.

(Translations: BA means barrel aged and RIS means Russian Imperial Stout.)

Thus I asked: So to justify a higher price for the bourbon barrel should they raise the price of the regular version ($8.99 a 4-pack in our parts, and one great beer bargain)? And Alan responded.

I sent off an email to Mark Ruedrich, one of the founders of North Coast and the brewmaster who wrote the recipe for Old Rasputin, to confirm a few facts (learned when we were in Fort Bragg in June; recently emptied barrels are pictured at the top of this post) and get a little more detail.

– North Coast sold Old Rasputin X and XI only at the brewery and brewpub in Fort Bragg, California (they are across the street from each other). We bought the XI in June for $12.95. We wish we had more.

– This year the brewery packaged Rasputin XII for larger distribution, a little over 2,000 cases (12 bottles a case). They sold out in advance to distributors and not every market North Coast ships to received the beer.

– Distributors will mark up the beer 28 to 32 percent before selling it to retailers, and retailers will mark that up another 30 to 35 percent. Special beers, like Old Rasputin XII tend to get marked up more. Take the middle of both those ranges and you’ll see a bottle of beer delivered to a distributor (which isn’t cheap when the bottle starts in Fort Bragg) for $10 would cost you $17.29 (more likely $16.99 or $17.99). Who’s making the real profit along the way?

– Now as to the difference in price between the “regular” Old Rasputin and one in barrels. Barrels, which hold around 53 gallons, cost $125 and more. They don’t add as much to the price as the fact that California charges $3.30 per gallon tax on the barrel aged beers (same rate as distilled spirits rate) compared to 20 cents per gallon for beer. Still my math indicates barrels and taxes add less than 75 cents to the cost of a half liter. The real expense is how inefficient and labor intensive small-run batches are.

– What’s changed is that if you really wanted to drink Old Rasputin X or XI you had to travel to Fort Bragg (or find somebody to buy you a bottle or three and ship them, only somewhat illegally) and pay $12.95. Today if you live in the right place you can buy it for $5 to $9 more, depending on the largesse of your local distributor and retailer.

Should you? That was the very fair question asked in the Beer Advocate thread. And one you are going to answer yourself.

So we’re back at the beginning, and what follows is opinion.

As I began typing this Ron Pattison wrote, “I don’t want innovative beer. I want tasty, refreshing beer. Beer I want to drink more than a mouthful of. Beer that’s a joy to drink rather than an exercise in endurance.”

I don’t know why a beer can’t be both innovative and tasty, but I appreciate the point he is making. However some people do want the new, new thing (although I’m not sure that 14 years after Goose Island brought Bourbon County Stout to the Great American Beer Festival for the first time that bourbon-barrel beers count at innovative) no matter what.

In this case I don’t think that North Coast is simply taking advantage of that fact. The brewers wanted to do something special for Old Rasputin’s 10th anniversary and priced it accordingly. Ruedrich wanted to package it in a substantial and expensive bottle finished with a cork and cage. As you read earlier, Alan believes such presentation fakes “the price up to create exclusivity.” Sorry, I love the heft of this particular bottle. It adds to my drinking pleasure.

Bottom line, despite the length and detail in this post, North Coast isn’t obligated to provide an explanation for why Rasputin XII costs what it does. After 21 years in business they’ve proved they are pretty good at delivering value (which is why last week construction workers were pouring footings for the new fermenters). Likewise, consumers aren’t obligated to pay $18 or $22 for any bottle of beer.

 

Brewing with corn and potatos

Thank goodness for Google books. Otherwise if you wanted to read The theory and practice of brewing, from malted and unmalted corn, and from potatos it would cost you $602.75 plus shipping.

But you can read this argument for brewing with potatoes, apparently spelled “potatos” in 1829, for the price of your Internet connection. Author John Ham (not that John Hamm) makes an elegant case for the spud.

“This root contains, intermixed with its fibrous part, a juice which is not pleasant to taste, (although a great detergent or substitute for soap) and also a large quantity of fecula, or starchy matter, a great part of it to no degree inferior to the finest arrow-root. It is this fecula alone that constitutes the value of the potato in brewing . . .”

Time to add another category at the Great American Beer Festival?

More on the myth, or not, of handcrafted

Ashton Lewis, a sometimes book author and “wizard” for homebrewers, but more important brewmaster for Springfield Brewing Co. in Missouri, takes the notion that “manual brewing equipment produces beer with more ‘character’ than beer brewed using automation” to task this week.

His post, titled “Progress Is a Funny Thing”, concludes:

So the next time you take a brewery tour at some a brewery with awesome automation, like New Belgium, Boulevard, Sierra Nevada, Harpoon, New Glarus, etc, etc, don’t bag on this great modern technology. Rather look at all the details of brewing that are given more attention because the brewers are not busy raking out spent grains by hand or manually turning valves that, thanks to modern automation, are being controlled to do what the brewer has pre-determined should be done.

The topic of “hands on” always gives me reason to pause. It’s important to be skeptical about change. But what we should be focusing on is ingredients and process, not if a brewer manually opens a valve or uses a computer to control that valve.

 

Call me irresponsible – I drink ‘craft’ beer

If you are . . .

– 105% more likely than the average person to drive hybrid cars
– 77% more likely to own Apple Mac laptops
– 65% more likely to purchase five pairs or more of sneakers every year
– and 32% more likely to not be registered voters.

Then you are probably a Blue Moon drinker.

I’m not making this up. It’s all in an Advertising Age article headlined “What Your Taste in Beer Says About You,” reporting research by Mindset Media. Of course any story in which the “the concept of beer-as-window-to-the-soul . . . (is based on) psychographics” is required by law to be silly.

What kind of beer do these guys drink?Let’s go straight to the stereotypes: Budweiser drinkers are 42% more likely to drive a truck than the average person and Blue Moon drinkers drive hybrids. Corona drinkers are 38% more likely to own three or more flat-screen TVs and Michelob Ultra drinkers are 34% more likely to buy life insurance.

As you might have already guessed I’m a psychographics skeptic; so much so that I didn’t believe in it even before it was invented. But why let that get in the way of a little fun? Consider this:

[xxxxx] are socially liberal and usually quite willing to go against convention. They really hate moral authorities, and believe children should be exposed to moral dilemmas and allowed to come to their own conclusions. They can also be sarcastic and snide in order to get a point across.

“Blue Moonies” or “craft” beer drinkers?

The former. Real “craft” beer drinkers are lumped together into one category that does not include Blue Moon drinkers.

This group is more likely to spend time thinking about beer rather than work. They are more open-minded than most people, seek out interesting and varied experiences and are intellectually curious. Craft-beer drinkers also skew as having a lower sense of responsibility—they don’t stress about missed deadlines and tend to be happy-go-lucky about life.

Craft-beer lovers are 153% more likely to always buy organic, 52% more likely to be fans of the show “The Office” and 36% more likely to be the ones to choose the movie they are going to see at the theater.

Like looking in a mirror, right?