What happens when you use about twice the malt and as many as five times the hops of a mass-market brew, like Budweiser or Miller High Life and commodity prices go up?
The Wall Street Journal joins the conversation about looming higher prices for craft beer that’s been going on in multiple beer blogs the past month.
It appears the Journal has posted the story in its free area (I hope I have that figured out) so just a couple of highlights – since I’ve written about it here, while Lew, Rick, Jay and others have reported much that’s in the Journal.
– “The cost increases have been the largest we’ve ever faced, both in barley and in hops,” says Boston beer (Samuel Adams) founder Jim Koch.
– Larger brewers won’t be forced to increase prices as much – in part because of buying power and in part because they use less malt and hops.
– Malt prices are up 40% to 80%, hops prices 20% to 100%.
– “I think there’s going to be some brewers out there,” says Dogfish Craft Brewery brewmaster Andy Tveekrem, “if they haven’t looked that far ahead, that actually might run out of malt or hops, which would be a catastrophe.”
And as they go up, retailers will adopt a variety of ways to manage the increase, including shrinking glassware, not prices. Demand an honest pint!
(Sorry, it’s a hobby horse I just started riding….)
Jeff, can we say make sure you understand what you are getting?
I was talking with a brewpub owner Thursday who has the good fortune to have his 2008 hops assured under contract (though at a higher price) and is feeling pretty confident about 2009.
The malt increase will hit him harder, but even in beers in the 1.060 range and accounting for inflation (and that beer profits help subsidize rising food costs) he figures that 25 cents per pint should cover everything.
Of course, that’s in-house. No glass. No shipping water (the bulk of beer).
I think it’s fair for pubs to give consumers a choice – beer costs more, don’t want to pay for it then get less for the same amount of money – but they should be honest about serving, 12, 14, 16 ounces. Whatever.
So that’s a long-winded way of agreeing with you. And adding a link to your latest on the subject.