Craft beer is underpriced

Posted in Beer on April 9th, 2014 by Nathan – 8 Comments
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If quantity cannot increase fast enough, price must.I've written a lot about this topic in various other locations, but I figured it's time to talk about it here: much of craft beer is absurdly underpriced. I've touched on supply/demand before in this blog, but a quick refresher can't hurt. Basically, to the left is a supply and demand curve. It's basic. Where that dot labeled "equilibrium" is is the magical world where supply matches demand. In that world there's an equilibrium price and an equilibrium quantity. It's magical, of course, because it rarely exists with specific goods.

Craft beer is one of those goods where the equilibrium seems to be a fantasy, impossible to reach. Instead, we're at a point on the supply curve down and to the left of the equilibrium: quantity is low, price is low.

The symptoms of this are obvious in many craft beer scenes around the country: super quick sellouts, the recent Hunahpu's Day disaster, beer scalpers, etc. When demand outpaces supply, these types of things happen. These are simple market inefficiencies. And there's only two ways to fix these inefficiencies: increase supply or decrease demand.

Increasing supply is a somewhat nice idea, and in the market overall, this is already underway. More and more craft breweries are opening, expanding, increasing production. However, because beers are not perfect substitute goods, an increase in supply in the overall market does not translate to an increase in supply for particular beers. As a result, rare or limited releases continue to see the problems described above. In fact, this is precisely where the problem is most evident and these beers are the exact ones I would argue are underpriced.

Thus, demand must be decreased. And as the supply/demand curve image shows, if the quantity can't increase, the price must. And as it does, the consumer appetite will decrease, demand will drop as prices approach equilibrium. Note that there's nothing "fair" about this – it's a purely capitalist system, but it's also a system that, with the scarcity that exists, works.

Jester King's Aurelian Lure and Nocturn Chrysalis were priced at sixteen dollars per 500ml bottle. There were about 500 bottles of each. Every bottle sold out within three minutes. That's absurd. Jester King could have easily charged twice that and the sellout would still have occurred, albeit at a slightly slower rate. In fact, I would argue that Jester King could have charged ten times as much – an unheard of (some might say obscene) $160 per bottle, and still sold out in a reasonable amount of time. (Of course, they would have had to remove the "limit one per person" stipulation. And I wouldn't have gotten any.)

A six-pack of Saint Arnold Divine Reserve may run you as much as twenty dollars. Look on Craigslist a day or two after it's been sold out in Houston, and you'll see postings asking for fifty or one hundred dollars. No matter how often people flag the posts (myself included) as prohibited, those sellers will sell the beer they bought. If they wouldn't, then we wouldn't see the same thing after every somewhat limited release. The prices they request are closer to the market equilibrium, and the gray market rewards them for taking advantage of a massive market inefficiency.

Part of the problem, I believe, is that there seems to be some kind of "noble pricing" that breweries implement. Reputational risk is probably a concern, but honestly, a lot of breweries are owned by or started by people who find it abhorrent to charge more than what they think is fair. Freetail is a great example of this, and they have stated before that they purposely keep prices low, intentionally do not capitalize on the extreme demand for Ananke and other special releases, and do not plan to change this in the future. Honestly, I think that's noble, wonderful for my wallet and those wallets of my friends, and unsustainable.

The prices probably won't rise in the near future, unfortunately, because of this reason and other reasons. But I repeat that I believe this is unsustainable. The growth in craft beer demand looks to continue at ridiculous rates, while supply simply cannot keep up. The result will be increased gray market activity, more catastrophes at beer releases, more rapid sellouts and angry consumers, and ultimately chaos. It's not impossible to envision a future in which a brewer throws his hands up and sells out or quits, in retaliation to this chaos. And that benefits nobody.

The responsible but unpopular thing to do is to raise prices. Craft beer is massively underpriced and unless this changes, there may be a crisis ahead.

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On Voter ID laws

Posted in Opinion on March 31st, 2014 by Nathan – Be the first to comment
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If I'm gonna continue blogging, I'm gonna go full nine. Politics this time around.

"We need to ensure our elections are fair" – Tom Corbett, PA Governor who signed the state's Voter ID law.

"I think any person who does not want to see fraud believes in having good, open, honest elections. Transparent. One of the ways to do that, one of the best ways to do that, is to have an identification, photo identification so that you prove who you are and you keep those elections fraud-free." – Rick Perry, TX Governor who signed the state's Voter ID law.

I don't have too much to say on this topic other than that I think voter ID laws are political power plays (possibly with racist and definitely with classist implications) that do very little to combat "voter fraud," a menace that I do not believe exists.

I do however think it's very interesting that those in power are the ones alleging elections – those elections that got them into power – are unfair. I also think it's interesting that these laws are fought for almost entirely by one specific party, and only when that party is in charge.

And finally, I think it's interesting that with so few voters in each election, anyone would do anything to try to decrease that number. If we are going to require an ID to vote, maybe we should take it another step and require everyone to vote. Of course, the political landscape would massively shift if every American voted, and I guarantee those who support voter ID laws would find that shift hateful.

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A brief, open letter to Saint Arnold (Ode to Icon Red Bohemian Pils)

Posted in Beer on March 24th, 2014 by Nathan – Be the first to comment
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Dear Saint Arnold Brewing Company,

Please make Icon Red Bohemian Pils a year-round offering.

Love,

Nathan

++++

Last year, when the first in Saint Arnold's Icon series came out (Red: Belgian Pale Ale), I was immediately excited. Before Icon, Saint Arnold's offerings had changed very infrequently, or been limited release only. Icon represented a new world for the brewery: new, changing styles released with a volume high enough for everyone to have a ton of the stuff. And each quarter, that has remained true, each time with a delicious beer. The BPA was crisp and delicious, and then came the Cascadian Dark Ale (Blue), one of the few "black IPAs" (a term I dislike generally only slightly more than the style) I actually enjoyed. It was flavorful, malty, and unlike the typical CDA. Following that was the Amarillo Hefe (Green), which was unique and refreshing. And to cap off the first year of the Icon series was the Bière de Saison (Gold), a mixture of two styles, and in my opinion the best of the four.

When the second year of Icon began, it was clear that the series was going to continue brilliance, but it started with a letdown for me: Icon Red Bohemian Pils. I say "letdown" because when the style was announced I was immediately saddened; I simply don't consider myself a pilsner guy.

Or, more appropriately, I didn't consider myself a pilsner guy. The vast majority of pilsners I had had before the Bohemian Pils were disappointing, unbalanced, and not friendly to my palate. In fact, some of the worst beers I've had have been pilsners. So when Saint Arnold announced their second Icon Red, I assumed I'd give it a try, not like it very much, and wait a long three months for whatever came next.

I could not have been more wrong, as the "letter" above makes obvious. I drank a ton of Icon Red over those three months and now find myself wanting as it has dried up nearly everywhere, replaced by the newest (and also delicious) Icon Blue: Brown Porter. Don't get me wrong, I can't wait for more Icon beers, as each one has been delicious. But I want the Bohemian Pils to return as a year-round offering.

As Saint Arnold this past week added to their year-round offerings for the first time in two years (with the incredible Boiler Room Berliner Weisse), I don't think the timing could be more appropriate for yet another addition. So, I write the brief, open letter above to ask Saint Arnold to do exactly that. Make this one-time pilsner a year-round pilsner.

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I wrote something: Top Ten Breweries in Texas

Posted in Beer on March 21st, 2014 by Nathan – Be the first to comment
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After a shameful post on Thrillist about the top ten breweries in Texas, my friend Jason put together a panel to come up with a better list. Since I was one of the panelists, I figured I'd separate out my votes (very different from the final result) and post them again here. Best part is I get to revive this blog without actually writing something new for it…

Brewery Comments Top Beers
1. Real Ale Real Ale has been consistent and impressive for 18 years, in that time failing to produce a bad beer. They consistently nail "basic" styles (a big plus for me) while producing the state's best sours in their Mysterium Verum series and creating interesting experiments in the Brewer's Cut series. Scots Gone Wild, 4-Squared
2. Saint Arnold It was really hard to choose the #1 spot between RA & SA, and I'd entertain the opposite ranking. Everything I said about Real Ale, I can say about Saint Arnold, except change "18 years" to "20 years." They are the paragon of consistency, do not make bad beers, and their experimentation in the realm of Divine Reserve, Icon, and Bishop's Barrel has been marvelous. BB2, Icon Red Bohemian Pils
3. (512) Another brewery that does not make a bad beer. (512) makes probably the best porter in the state, and their anniversary beers are among my favorites in their styles. Like Real Ale, they aren't super flashy, and so I think they get overlooked often. Hype doesn't follow taste though, and (512) consistently puts out fantastic beers. Pecan Porter, THREE
4. Live Oak Again, hard to choose between this and (512) for the #3 spot, so again, I'd be okay with them switching around. Live Oak is singularly the best German brewery in America. There is no question about that. Even if you're not into traditional German styles, you have to admit that these are incredibly impressive. Best in class Hefeweizen, Pilsner, Weizenbock, and even a great Barleywine. Hard not to love these guys. Hefeweizen, Old Tree Hugger Barelywine
5. Jester King Jester King's new foray into fruited sours makes them my number five with a bullet. If they continue on the trajectory they've placed themselves after leaving behind the past mistakes, they'll be higher on my list the next time I have to make it. Farmhouse & Sour means a lot more in Texas today than it did when they first replaced their (fantastic) Black Metal with a (less so) Farmhouse Black Metal. The national recognition JK has achieved is very deserved. Atrial Rubicite, Le Petit Prince
6. Hops & Grain It's very important to me not only that a brewery can make one amazing beer, but that they can make a ton of amazing beers. If those are simple styles, that's even more impressive, as it's harder to hide mistakes in "basic" beers. H&G is very good at this. Very few misses, and the vast majority of their beers are fantastic easy-drinkers. I'm excited to see where the Greenhouse IPA series goes in the near future. Zoe, Greenhouse IPA (Jan '14)
7. Freetail Freetail has a lot of hype, and for some people, that's a bad thing. But I say most of it is deserved. Their beers, especially in the recent two years, have been incredibly complex and very impressive. Easily the state's best (traditional) brewpub, and also rising fast on this list. Peche'cus, La Muerta
8. Austin Beerworks ABW has managed in a short time to create some fantastic beers, a great IPA series, and only a few misses. Unfortunately, I think their misses were in the most important styles, those basic ones that can't hide mistakes. Nonetheless, an amazing brewery and the first one to bring us a truly great Berliner Weisse. Einhorn, Heavy Machinery Half IPA
9. Lone Pint It might be a bit early to put them on this list, as they're very young, but I believe they are currently producing the best single beer in Texas (Yellow Rose), and it would be blasphemy to leave them off the list. I can't conscionably put them higher though, as unfortunately the rest of their beers fall far short of where YR is. That's not to say they're bad – I would say I've only had two misses from them – but they're not on the level of excellence that YR is. I can't wait to see what the future brings though, as every new offering is fantastic. Yellow Rose, Zythophile El Dorado
10. Lakewood Very similar to Lone Pint in that they produce one fantastic beer (Temptress) and a ton of variations thereof. There's somewhat of a dearth of great milk stouts in this state, and Lakewood solves this problem with a fantastic one. Temptress, BB Temptress

And finally, the honorable mentions that Jason didn't put up on his post:

Missing from this list: There’s a couple breweries notably missing from this list and I’d like to very briefly explain them as “honorable mentions.” Peticolas: both beers I’ve had from them have been very good, but the keyword is “both.” I simply do not have enough experience with them to form a more realistic opinion. Community: very similar. I’ve only had four beers from them, three of which were absolutely fantastic. But still, not enough experience to include them. Karbach: hype doesn’t make beer taste better, sadly.

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September 12

Posted in America on September 11th, 2013 by Nathan – Be the first to comment
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I recall a few years back, politicians accusing each other of having a “September tenth mentality” toward homeland security. The imagery of such a statement is powerful, intense, and interestingly revealing.

Twelve years ago, we sat in fear and uncertainty after the events of only one day prior. I intend not to further illuminate that day that most of us conscious today remember vividly. I intend not to focus on 9/11 but rather that day after, a day after that I would argue that we have yet to begin.

The events of 9/11 lasted one day. But their effect has yet to end. We are still at war; indeed there are many Americans who do not remember peacetime. We take our shoes off at airports and cannot bring liquids aboard. We have untried prisoners sitting in Guantanamo Bay and who knows where else. We allow our government to spy on us, to threaten other nations, to endanger our civil liberties. We do all of this in the name of security, in the name of protecting our nation from the evils that we saw twelve years and a day ago.

We have allowed our America to decay from the inside. We have allowed those liberties upon which this nation was built to be stripped away, almost in an instant. In twelve years, we have seen ourselves become a nation ruled by fear.

And I believe it’s at least partially because every year, we focus on yesterday. Every year, the “never forget” statements ring, as we find it more important to focus on 9/11 than on the evils that have occurred since then.

We don’t have to relive the attacks each year to see that the terrorism has yet to stop. We are still prisoners of September 11, and it’s time for a new day. It’s time to welcome September 12.

September 12 is not a day of forgetting, or any of the other horrors implied by the phrase “move on.” But it is a day of rebirth. It’s a day of growth, of assessing the damages and seeing what work needs to be done to repair them.

Today is September 12. Today we need to realize that 9/11 is in the past, behind us, and that allowing the damage to continue cannot help us or heal us. It’s only been twelve years, a blink of an eye, but we must move on.

Some people think it’s awful that Memorial Day is a day for parades and sales. They think that celebration is not an appropriate way to mourn and memorialize. But it’s the American way. We memorialize by living. And in America, we do that by living free, happy, innocent, and unfortunately, by being a target. September 12 may look very similar to September 10. But what’s important is that it looks nothing like September 11.

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Learn Stuff: What is a Cornish Pasty?

Posted in Learn Stuff on August 18th, 2013 by Nathan – Be the first to comment
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cornish pasty

It's a pot pie in the shape of a calzone.

I had one while in England and found it somewhat tasty, though really the only improvement over a pot pie is that this can be handheld. Really other than that, there's nothing special about it.

Interestingly, the Cornish Pasty has geographical protected status to Cornwall, much like Champagne or Pecorino Romano. Of course, we don't care about European protected products in America, just like they don't care about Vidalia onions or Bourbon.

According to the official geographic protection document, a Cornish Pasty is "a savoury 'D' shaped pasty which is filled with beef, vegetables and seasonings." So not only is it quite literally a pot pie in calzone shape, but it also a means to continue misinforming the British as to the proper place of a 'u' in words that don't need it.

One last thing on the pasty: there's other types. When I had my Cornish Pasty, also available were Chicken Tikka Pasties, Fruit Pasties, and all manners of other types of meat pasty. I can't help but think that any one of those alternate flavors would have likely been better. A handheld pot pie, frankly, is not much of a treat.

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Give me ice or give me death

Posted in Travel on August 7th, 2013 by Nathan – Be the first to comment
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I was in London two weeks ago and I intend to be there again this coming week. I'll have a lot to say when I get back (I've been thinking about a few things related to restaurants and beer and London and will likely put them together in the coming weeks) but I want to get this one out now, in case the Queen reads this blog and can decree a change before I get there on Sunday.

There's a serious ice problem in England. Actually in all of Europe, but I believe you have to tackle a problem one step at a time, and England seems as good a first step as any.

The ice problem is this: there's no ice.

Seriously. You like ice in your drinks? Too bad. England operates on an interesting conversion system (something to do with the metric system, I'm sure) that appears to be as follows:
Ice water –> Water
Iced tea –> Jail time

I actually did see a few cubes of ice at one point (a rare sighting indeed) when I ordered a Sazerac at a restaurant. I was a bit surprised, because at other bars, I had seen liquor bottles stored in a cooler so that bartenders could avoid needing ice. I kid you not. "Ridiculous" does not even begin to describe that.

Now as it happens, I particularly like having ice in my water, so this is particularly distressing to me. Also distressing is that I can't understand it: England is a first world country. Surely they have freezers, ice machines, etc. available to them. It's not like ice is a luxury or a precious commodity. There's no reason why ice should be hard to find. But in England, it's a scarcity.

England, I'm calling on you to be the change I wish to see in the world. Start freezing water, preferably in segmented-cube-shaped plastic trays, and put the resulting cubes in your water. It will blow your collective minds. Or freeze them.

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