MdV:
Merchant du Vin beer e-newsletter – Friday August 31, 2007: Beer Prices
We’re
very pleased to announce a fine new addition to our beer portfolio, Green’s,
the only Gluten-Free Belgian Ales available in the
http://www.merchantduvin.com/greens_intro_6_7_07.pdf
(People
with celiac disease cannot eat gluten - Sept. 13 is National Celiac Awareness
Day. http://www.celiac.nih.gov/Default.aspx
)
We
offer a moment of respectful reflection for the world’s greatest beer writer,
Michael Jackson, who died yesterday morning in his
Media
coverage of Merchant du Vin’s fine beer portfolio continues to grow: Orval
Trappist Ale was in the New York Times on August 22, 2007; Ayinger and
Rochefort are in the October ’07 Men’s Journal’s “Top Beers;” Samuel Smith’s
and Pinkus were in the San Francisco Chronicle on August 10; Samuel Smith’s Nut
Brown Ale and Lindemans Framboise were on NBC’s “The Today Show” on July 4;
Modern Brewery Age ranked Zatec Bright Lager as the top choice of their tasting
on June 25, then Ayinger Brau-Weisse was the favorite a week later, on July 2. Plus, beer festivals, dinners, and events are
offering beer lovers all across America more chances to discover and enjoy
great beer.
Full
national news & MdV event listing at:
http://www.merchantduvin.com/pages/1_about/news.html
Beer
Chat from the
Recently,
The Times of London ran an article comparing how many minutes it took a
nation’s average worker to earn enough money to buy a beer. The range was from 9 minutes (in
So
let’s take a look at the money you paid for that bottle of beer you bought at a
store, or the draft beer the bartender just handed you, and see how that cost
is divided up.
First,
your beer went through the hands of a retailer, someone working a lot of
evenings & weekends so they can serve you beer during your time off. All beer retailers must be licensed to sell
alcohol, and all must train their staff to follow state and federal laws. Some states require that bartenders and servers
attend a class and pass a test before they can sell beer. For many years, off-premise (that is, beer
you buy to take home) US beer prices and margins have been kept low by extreme
competition, by huge economies of scale from vast breweries, and by marketing
via price promotions. (Next time you are
looking at floor stacks of beer, note how almost every display is at a
discounted price.) Retailers have
leases, utilities, supplies, heavy staffing, and insurance to cover out of the
cost of their beer – all these costs come out of the difference between their
buying and selling price.
Most
beer arrives at a retail location on a beer wholesaler’s truck. In many states beer arrives on the same truck
as wine; sometimes it arrives with spirits as well. But beer never arrives on the same truck as
other groceries – which means that dollar-for-dollar, beer wholesalers have
among the heaviest loads in the food business.
The wholesaler’s fairly small margin pays the hardworking truck driver
who wheels all the heavy beer into the tavern or store, the warehouse and
operations workers, and the salespeople who are presenting new beers and asking
for sales.
Importers
& brewers do more than just buy grain, hops, labels and bottles. They invest a lot of time in reporting and
registration, because beer is a heavily-regulated industry: labels get approved
at federal and many state levels; employees must be registered with states;
warehouses are registered and bonded; there are myriad reports filled out for
barrelage produced, beer shipped, beer on hand, etc. For a brewery or importer of medium size or
larger, “legal compliance” is a full-time job. Breweries have other expenses that are
proportionally higher than other industries, too: utilities, marketing, and shipping.
Importers
have to pay for ocean and inland freight, a major cost, as well as customs
clearance and other federal requirements.
If an American importer is buying beer with currency other than US
dollars, they are subject to changes in the US dollar’s value to other
countries. (It currently takes about
$1.30 to buy one Euro.)
When
breweries buy grain, they don’t get it direct from a farmer – they buy it from
a specialist, a malting company, which germinates, dries, and kilns barley and
wheat. Grain and hops are often sold by
co-operative agencies that allow farmers some economies of scale and a sales
office that can negotiate with a malting company or brewery.
After
breweries have their malt and hops, they must make a number of labor-intensive
steps and decisions when they brew and package.
These steps and these decisions all come the hard way: by deep thought
and planning, by trial and error, and by inspired creativity.
Bartender
– wholesaler truck driver – distributor sales rep – inland freight driver –
sometimes an importer – brewery – malting company – hop co-operative – glass
bottle provider . . . that beer you
bought supports a multitude of hard-working folks that are frequently in the
beer business because they really like beer, not because of the many dollars
that can be squeezed out of each case or keg.
One
more note about the price of beer: the most expensive beer you can find might
be $20 for a two-person bottle. Think of
other high-end items, like cars, wines, Scotch, jewelry, shoes, clothing . . .
if you can’t afford a Ferrari or Manolo Blahnik shoes, might as well go out and
buy the finest beer you can find.
If
you are reading this newsletter for the first time, check our archive at:
http://www.merchantduvin.com/pages/1_about/enews_archive.html/
and
sign yourself up for e-news at:
http://www.merchantduvin.com/pages/1_about/guestbook.html
Merchant