Announcement

Collapse
No announcement yet.

What is your new pricing strategy?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • What is your new pricing strategy?

    I realize there is a similar thread going but I'd like to limit this topic to your strategy for raising prices.

    We need to get to the nitty gritty of this issue, people!

    Here at Snake River (Jackson Hole, WY) we are seeing 100 - 300% increase in Hops, 67% increase in bulk 2 -row and so on. Crude oil will be $100 a barrel by the time this gets posted so...

    I'm not personally convinced the distributors will suck up any to keep the shelf price low are you?

    I'm wondering if the big boys will wait it out to make us look bad? Even they will not be able to put it off forever.

    We are going up .50 a pint in our pub(to $4) and .75 to $1 a case and we will do it either Dec 1st or Jan 1st.

    What will you do?

    Chris E.

  • #2
    maybe off-line?

    Hey, I'm not a lawyer, but I have always thought this type of discussion smacks of collusion to raise prices together. There was a similar thread started on the Brewers Association forum about keg deposit pricing, and Paul Gatza got online and warned all the brewers to avoid talking together about raising prices. I realize that most of us are not even operating in the same states, but who knows what fun a lawyer for A-B or Miller could have with it.

    I think if you do what you think you need to do to remain profitable, you'll probably fall in line with everyone else's prices.
    Linus Hall
    Yazoo Brewing
    Nashville, TN
    www.yazoobrew.com

    Comment


    • #3
      I have to agree with Linus. I think informal discussion about the issue is ok, detailed specifics about pricing and timing would not be a wise idea.

      Comment


      • #4
        We plan on pricing our 6packs at a premium but fair price, because they are just that... Premium!
        Hand-crafted, small batch beer deserves a higher price point.
        After running our numbers for our small startup self distro brewery... we found a price that we can live with and everyone else with live with it too.

        Plus, everyone else will be over the typical $8 6pack price soon enough... why raise our prices when everyone else does.
        ________________
        Matthew Steinberg
        Co-Founder
        Exhibit 'A' Brewing Co.
        Framingham, MA USA

        Head Brewer
        Filler of Vessels
        Seller of Liquid
        Barreled Beer Aging Specialist
        Yeast Wrangler
        Microbe Handler
        Malt Slinger
        Hop Sniffer
        Food Eater
        Music Listener

        Comment


        • #5
          Well, I guess I would consider this disscussion pretty informal, no?

          (I started the thread here because of the BA's (rightful) inability to tackle the issue)

          The knid of info sharing that I think would help is like this:

          I know a brewer who had a price increase in '06 that resulted in a 5% decrease in production but a 15% increase in profits.

          Now that it's ingredient costs driving our own price increases, we might get the decline in production but not the increase in profitability-oops!

          How many of us are expecting a decline in sales as prices go up?

          If you see that happening will you combat with a post-off or other discounting?

          Comment


          • #6
            Come on guys..... This is really simple. Take the increase you see and figure out how much that it increases your batch cost. Then you see what price increase you need to incorporate to achieve the profit margin that you want to obtain. It is not a difficult concept. Each brewery is going to be a little different. We don't need to have a "straight industry increase". Do the math. Its not that hard!!!

            Comment


            • #7
              Well, it's not as simple as passing the whole cost on to the consumer. There is not an inelastic demand for your beer. You have to figure out what a price increase will do to your sales. It will have some effect. How much it will slow your sales is the hard thing to figure.
              Linus Hall
              Yazoo Brewing
              Nashville, TN
              www.yazoobrew.com

              Comment


              • #8
                That's right - not so simple.

                Put your distributor in there too. They normally want to make a 25% (or so) margin. But the last time we raised .50 our guy also raised .50. He didn't do .50 X 1.25 = new price. His increases are totally outpacing ours.

                One of my big questions is will they accept any responsibility to control the shelf price? They have got to be weighing the whole thing out just as we are.

                Comment


                • #9
                  Your missing my point. You need to find a happy medium with the profit margin that you want and the price increase you give to the customer. Yes you will eat some of it, but the way to figure how much is to calculate your batch costs. It is that simple!!

                  Comment


                  • #10
                    German brewers

                    Just for your information: most german brewers have decided to raise their prices (sounds wierd, but if the don't all raise, then there are always LARGE shifts in sales numbers amongst the top 20 in Germany). Beer is still very price-sensitive here but it looks as though prices per case (10 liters) will go up about €1,00-1,10, this including the 19% sales tax. Included here is also the much-needed mark-up for wholesalers, due to exploding diesel prices.

                    To break it down, it looks like €,50-,60 for the brewery, €,30-,35 for the wholesaler and then 19% sales tax. This is also based on the strong Euro (read: weak dollar), which is surely 15-20% overvalued right now. Bad news for all importing from Europe, but things could get somewhat better if the dollar pulls up it's pants one of these days.

                    Prosit!

                    Comment

                    Working...
                    X