Hoosier Beer Geek,Do we have any ideas? Well, we're not sure we completely agree with Brad's assessment of local beer prices - in an email conversation Matt noted that on a recent trip to a Chicago liquor store, most beer was priced at 50 cents to $1 more than what we pay in Indianapolis. Gina and I regularly shop in the St. Louis area, and liquor store prices there seem to be generally in line with what they are here, apart from the occasional craft import. As for pub prices? In conversation we thought that perhaps they're a little higher here than elsewhere.
I was recently transferred to Indianapolis by my company, and I've found an incredible amount of value out of your website. This has been just a tremendous resource for someone from California that knows no one here in the city. I hope you keep up the great work, and I am looking forward to attending one of yours events that I've read about on your website.
Here is my question for you, and maybe you can't answer it. I work for (Name Deleted) and Indianapolis is the seventh city I've lived in in just under ten years, including my college days in Arizona. I've lived in Tampa, Chicago, Atlanta, Charlotte, Tempe, Cleveland, and now Indianapolis. Why is Indianapolis the most expensive city I've ever been in for beer? The price of living here is the lowest I've seen outside of Cleveland, but when I go to the bars the drinks are $6, $7, and $8 dollars for a pint of local beer. The beer prices in the liquor stores are even worse - six packs all over $10 and four packs of pale ale for $12. This is not what I've experienced around the country. In Charlotte it would be downright shocking to see a six pack over $10 dollars. I am certainly not knocking the quality, but the price point is a good 15-30% markup in comparison to the other cities I've recently lived in.
Any ideas?
Thank you again and keep up the fantastic work!
Brad
So we'll open it up to our readers. What's your impression of beer prices in Indianapolis versus everywhere else you've been? Leave a comment.
Brad since you're in Indy, why not stop by all the great places that produce the beer itself and save yourself some money. Buying six packs at the brewery is cheaper than the package store. Get a growler from the brewery, stop by the pubs that brew the beer and have a pint, much cheaper than some bar they sell it at. Buy it from the source!
ReplyDelete@Rodney: Check. But growler beer just doesn't stay fresh long enough sometimes.
ReplyDelete@Brad: I agree. I have been buying bombers of Avery, for example (hesitantly available still I think, but not sure) for roughly 5 years now. Hog Heaven when I started was $6 - $6.50 if I recall. Now it's $10 - $10.50. I do not have the data for what this relates to outside of central Indy (other than to Chicago, which I would probably go with Mike's assessment), however, it appears to me that supply and demand is at work. Our local demand for outside products has gone up, while the supply has gone down. Naturally, price goes up.
I don't know if this is really the reason, but something made things jump and stay higher than they used to be, and a 65% increase in product cost is not at all relative to increases in commodities and ingredients by themselves IMHO. I don't buy bombers any more because I can't stand paying for one large beer the price for a whole sixer! Specialty fours are even difficult to buy for the same reason, but occasionally, you go outside of your comfort zone.
This is an interesting discussion, but not necessarily one which has many answers as questions.
One more solution, a la Rodney: Brew you own my friend. Tuxedo Park Brewers will get you brewing your favorite beer for 1/3 the cost or less in no time. Fountain Square: www.tuxedoparkbrewers.com.
This is a difficult subject to tackle since it has many variables in the equation. Brewer's overall do not set the final price of the pint you are drinking. They sell to the distributor and then it gets sold to the bar/restaurant. Many places around town have great drink specials during the week for 3.50, 4.00, or 5.00 bucks a pint. If you don't catch them on special I've lamented the death of the five dollar pint for several years.
ReplyDeleteI actually wrote my MBA thesis on this subject for beer and market equilibrium prices. Right now the market in Indianapolis allows for this pricing structure, but at some point it won't support these prices any longer. This term pricing model isn't sustainable for the long run. The proof lies in cities like Portland, Seattle, San Francisco, Seattle, Chicago, and even NYC. They have established calculable and historic sales records that show the exact same bell pricing curve we are experience in Indianapolis right now. A stable middle market has found that the average pint price in the United States is 5.35(My data was 2010) a pint for craft beer excluding BMC products. Indiana is on the backside of that pricing model right now because the market equilibrium price is higher because of the infancy of where the market currently is, but the continuation of this pricing model will find many brewers priced out of the market. My research ultimately led me to show that the craft brewing companies that do the best in the United States do two things with their pricing model. 1. They produce a line of beers that could be considered market oriented pricing and 2. a line of "bigger" beers that are perceived as premium pricing to attract certain types of buyers. The ultimate issue will be for competition and the shock some brewing companies will feel when reference market effect happens to them. More competition and pricing will move lower because if you saw a six pack for 12 bucks and then another six pack of the same style for 9, even using the term "local" will only take you so far and the consumer will eventually vote with their wallets. I wish I could tell where on the bell curve we are right now, but the data certainly supports a peak is nearing in the future.
Sorry for the rant, but I love this type of stuff. Final answer: market pricing will have to come down for craft beer to continue its meteoric rise of 15, 20, 25% each year.
My wife and I went to Santa Fe, NM a year and a half ago - I was really surprised by how inexpensive the beers were (and we were shopping at a Whole Foods a few blocks away from our hotel). Odells, etc 6-packs were more like $8.
ReplyDeleteI think Indy is a draw when compared to the prices in and around the Tampa Bay area. And we're a hair less than Chicago.
Brad, I get some decent brands and values at Kroger... not sure if I've seen this anywhere else on HBG, but they've recently picked up some Cavalier Distributing products.
I don't buy a whole lot of beer in liquor stores, but sometimes the bars really gouge you... I hate going out, getting a sandwich and like 2 beers, and then ending up with a 30 dollar bill. But it happens all the damn time. I think i probably need to get a masters or something so i can afford 1 night out per week. i literally do not have enough money to become an alcoholic!
ReplyDeleteI'm not sure which bars he's going to, but I've never paid more than $6 for a local beer. The Beer Sellar has a $3 Indiana pint night Wed which I do frequently. Most places range from $4.50 to $5.50. My advice would be choose better bars?
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