CBIA Executive Officer Chris McNamara discusses whether craft beer is ‘expensive’.
When comparing the price of most small-scale, Australian-made products versus those coming from mass production facilities owned by multinationals, it seems people have a reasonable appreciation of the factors impacting the retail price difference.
However when it comes to beer, feedback to craft brewers suggests that in some quarters there’s an expectation that all beer should be similarly priced. (Not to mention that all brewers should be able to give away a whole bunch of free stuff, but that’s another story.)
So how does it work in reality?
In the first instance, it’s obvious to point to higher ingredients and packaging costs for craft brewers. The buying power of an Australian craft brewer is obviously not that of a multinational. So yes, ingredient and packaging costs matter very much. Particularly for craft brewers who are committed to brewing with only malted barley and conventional hop products and avoiding cheaper fermentables, hop substitutes or downstream additives.
However these elements are but the tip of the iceberg. Other factors are also very relevant to the price of craft beer on the retail shelf or over the bar, as compared with multinational brands, whether brewed in Australia or overseas. For example:
- The time allowed by craft brewers for fermentation and maturation; when yeast is allowed to work at its own pace, this process is a matter of several weeks, not days and as we all know, ‘time is money’.
- The scale at which things are done – more ‘hands-on’ means more hands on!
- Retailer margins are generally higher on craft beer (largely due to lower sales volumes), so compared with multi-national brands, often a larger portion of the shelf price stays with the retailer.
- Craft brewers generally brew to demand, without relying on product stockpiling.
- The logistics of moving beer around – economies of scale (or lack thereof) have a considerable impact.
Each of these factors impacts the overall price that we pay for craft beer at the bar or bottle shop.
A number of them also impact the overall nature of the product we’re purchasing.
Yes, mass production is a considerably more cost effective mode of manufacture. That’s a no-brainer. But for those who value such things, craft beer offers something different. Craft beer offers something that’s not mass-produced. And in a nutshell, that’s the point. It’s made differently from mass-production methods. It’s made by people who think and act differently from mass producers. By and large its economic impact remains cycling in the local economy.
So is it worth it? It depends what you want. Mass-produced beer can be offered at a mass-produced price. Craft beer comes at a craft beer cost. The main thing surely, is to ensure you get what you’re paying for.