bigger is better

[Captain Mullet]

We are a small brewpub and doing pretty good this year. Because of the recent increase in raw materials we have been having frank discussions on the price of our beer. I am completely against raising the price of the beer. We are a small town brewpub and increasing our prices would be fine for the tourist season but we have a great local base that may not have that second beer after work or dinner if we increase the price.

I like to take the numbers from the third quarter and financially map out the up coming year. Being a fugal brewer and concerned for the financial health of our brewpub I constantly work with the numbers to find where I am at throughout the year. As far as labor and raw materials we are running at 23.9%, not bad. But with the increases we may run that up to around 27%, still not bad, but it is about the bottom line.

I had toiled with this for a long time. The solution I came up with is pretty sweet and I need to share it. The craft brewing industry is about QUALITY. As brewers we have to walk that fine line of giving our best product while being fugal. While filling a bourbon barrel with stout the other day it came to me. I get around 50 gallons of beer from my barrel and we sell that at $3.50 for 6 ounces, (pretty sweet), and the stout from the tap runs at 16 ounces for $3.50. The bourbon barrel beer is one of our specialty beers and it sells great, why not dedicate more tap lines to higher quality beers.

Smaller servings and higher prices on higher quality beers, Quads, Belgian fruit, barley wines, you name it. I have been spending a lot of time doing the number and talking to my guests and it looks to be a win/win situation.

[ECB]

And let them take a 6oz. glass with them if they behave.

Tom

ECBC

[Jephro]

I know of some breweries that are raising prices on the bigger, more expensive to produce beers. So say an IPA, your hop prices just shot through the roof, so up it $.25 a pint and leave the blonde alone.

I think too many of us in the craft brewing field are stuck on selling all of the beers at the same price, but the reality is if your ingredient cost is say 20% higher on a particular beer, and it is good, I don't think people will mind paying for it. That way you can still sell your blonde or your amber to the unappreciative Joe Shmo at a lower price. Although i do like the idea of Mr. Shmo keeping the cost down on my Double Wet Hopped Harvest ale, but if we raise his prices to pay for the better product is he just going to order a Bud Light??
6-Row had a good season you know!!

[Roughstock]

...I think too many of us in the craft brewing field are stuck on selling all of the beers at the same price, but the reality is if your ingredient cost is say 20% higher on a particular beer, and it is good, I don't think people will mind paying for it ...

The other advantage to this pricing structure is that it actually serves a marketing role, too. It tells the customer that not all beers are the same; premium beers command premium prices. It adds the value of quality to your higher priced beers, which is a selling point for many guests.

Those guests valuing budget will be happy to still have a selection to choose from.

Best,
Jess

[Larry Horwitz]

Why so averse to rasing your prices? Your suppliers did, you should too. Don't think for a second that big breweries aren't raising their prices too...just call your local bud guy and ask what the increase will be. Also, not sure where you are but $3.50 a pint are 1995 prices...we get $4.50-$7.00 for belgian specialty products (true it's Philly, but it ain't new york city!!)

[Greenbrewmonkey]

I second Larry's comment. I think you should raise prices, but do it correctly. If your costs are up 4%, raise prices such. So your prices would go from $3.50 (which I think is too low as well, by the by) to $3.75? I kind of doubt folks will decide not to have a second pint over $0.25. But your bartenders might hate you for losing them all those quarters. They do add up.

Cheers,
Ron
Jolly Pumpkin Artisan Ales