Tandleman's Random and Particular Thoughts on Beer.
Saturday, 26 February 2011
Ker-ching!
Here's a question. Anyone care to explain to me why (British) craft keg beer is nearly always sold at a more expensive price than cask, even when the gravities are roughly the same?
Good stuff. I had all of these on my list except installing into venues, which simply didn't occur to me. Certainly at the brewing end there is more complex handling and processing, but won't that be countered by less wastage, longer life etc?
Pasteurisation? I thought the whole idea is that they aren't?
Anyone care to explain to me why (British) craft keg beer is nearly always sold at a more expensive price than cask, even when the gravities are roughly the same?
They'll charge what they can get away with - simple as that. Example from a different sector, but the principle's the same: a friend of mine worked in a posh London shop which had sky-high prices to match (because the posh want to pay more to show their good taste and exclusivity). Told she could buy anything from stock at cost price, she decided to splash out on a pair of shoes costing well over £100 (this is at least 15 years ago). She was amazed to find cost price was around £15.
If you keep on saying how good craft keg is, with some of you even saying it's better than cask, they'll notice and put a premium on it, and you'll pay it to show your good taste, etc.
@Tandy - some US craft-brewers pasteurise & somehow do it carefully enough not to knacker the beer! Anchor I think is one & I've loved anything of their's I've had.
Most I think don't, but do filter, force carb & then do their best to keep the kegs cool & sold reasonably quickly.
@Nev Some outlets sell cask beer at what they can get away with too. Some don't sell well-kept or well-brewed cask beer either.
I don't subscribe at all to the idea that craft-keg is better than cask, but to me, some beers might be better suited to the cooler temps & higher levels of carbonation in keg (e.g. wheat beers & lagers). But 9 times out of 10 I'd go for good cask over keg.
Interesting. It is the exact opposite in the US. Buying, cleaning, and using casks is almost identical as kegs for brewers so I do not think the extra cost comes from that end, it probably just has to do with economies of scale. Brewers tend to put money towards equipment for one or the other. This is why I suspect you will never see keg and cask on a level playing field price-wise. One will have to supplant the other.
Sorry Flagon, but no. It has little to do with actual costs and a lot to do with what they can con us into paying: they'll charge what they can get away with. And if craft[y] keg can be sold as a premium product, and while there are some insane beer bloggers saying we should be charged more for quality products, the prices WILL go up and fewer people will buy it, and we'll lose it all.
Except for you rich aesthetes who'll happily be ripped off if it's a premium product - indeed demanding that you be ripped off - and stuff the rest of us.
I don't think Jeff was talking about London cask ale pricing. Our local Spoons for instance still manages to sell a local pint of real ale for under 2 quid...that is staggering.
The point I think Jeff was making is that 'real ale' is undervalued and that is what you should be questioning. I think that this comes from 1) A market that has 600 breweries fighting for the odd Guest hand pump. 2) A proportion of these 600 breweries who aren't that good at maths or running a business.
I can't speak for all brewery owners, but our beer is priced where it needs to be for us to stand a chance of surviving as a business, not what the market will bear and not what we think the punter will be willing to pay. And that price typically works out higher than StellaStaroBecksRubbish once it hits the bar.
Producing beer for the keg does have some technical challenges that do cost more money to solve. You can produce flat beer in tanks that don't take pressure. These tanks are cheap compared to one that is rated to 2 bar.
I can also build you a cask washer in about 4 hours, whereas on the other hand I just spent 10K on a keg washer.
Funnilly enough we had this exact conversation with Dave Porter while on a trip round Outstanding last week.
He basically said that there are ups and downs to his keg operation. In his opinion, cask is easy - brewed, femented, straight into cask, shive in, ready to go. To keg beers after fermentation, the beer needs to be stored for maturation (more vessels needed - especially when doing a lot of lager style keg as Outstanding does), then kegged, pressurised, sealed - all extra work that cask doesn't need.
However, he said on the positive side, some of the ingredients are cheaper (e.g. lager malts). Also there is better turn around on kegs - where casks can go out to pubs for weeks and months before they come back, keg accounts tend to be steady business where he can drop the kegs one week and pick them up the week after.
@RedNev, you may be right, but just repeating your point isn't a very convincing way to make it. What evidence do you have that it's just price gouging? The thought that every brewer who does craft keg along side reasonably priced cask are engaging in some sort of collusion seems pretty far fetched to me. I have spoken to and seen several breweries locally here who do cask along side keg. It usually involves cleaning and filling the former by hand which is why costs more. I'd encourage you to go ask your local breweries just why their kegs cost more if you suspect it's something else.
I don't really agree with RedNev either. There are higher costs associated with keg, but that in itself doesn't explain it all away. I haven't made the enquiries, so I don't know what is being charged pint for pint by breweries for their keg product and whether than inevitably means higher prices at the bar.
The other aspect is that keg is usually sold in less price sensitive environments which may allow a bit of margin stretching.
Either way, it is a precarious business model as higher prices are ultimately going to limit any broader extension of keg.
You could probably take a fairly relaxed view of all this I'd say.
Product positioning. 'Craft keg' is a niche product within a niche; charging a premium tags the product as premium so enough punters are prepared to pay more.
Why the brewers imagine that we should want to pay a quid a pint more for lower quality beer, I have no idea. Enough of us apparently do to make it worthwhile.
Steel kegs cost more than steel casks? (more complicated engineering & built to take more pressure)
ReplyDeleteKeg-washing/filling plant is way more expensive than the basic (& fine) cask alternatives).
Keg often involves more processing - filtration, flash-pasteurisation, cold-conditioning, etc - all takes time/kit, all = £.
Installing keg fonts into venues is trickier & more expensive than using existing handpulls.
But do I think it should be vastly different in price? No.
Hoegaarden and Erdinger cost more, that's what the market will accept in this sector. "Craft keg" = better margins. Why would they do it otherwise?
ReplyDeleteGood stuff. I had all of these on my list except installing into venues, which simply didn't occur to me. Certainly at the brewing end there is more complex handling and processing, but won't that be countered by less wastage, longer life etc?
ReplyDeletePasteurisation? I thought the whole idea is that they aren't?
Barm - they come from further away. Countries away. Why do they do it? Follow the money I guess.
ReplyDeleteIn the U.S., the reverse is so: a patron will be charged more for a pint from a cask than from a keg.
ReplyDeleteAnyone care to explain to me why (British) craft keg beer is nearly always sold at a more expensive price than cask, even when the gravities are roughly the same?
ReplyDeleteBecause they can get away with it?
They'll charge what they can get away with - simple as that. Example from a different sector, but the principle's the same: a friend of mine worked in a posh London shop which had sky-high prices to match (because the posh want to pay more to show their good taste and exclusivity). Told she could buy anything from stock at cost price, she decided to splash out on a pair of shoes costing well over £100 (this is at least 15 years ago). She was amazed to find cost price was around £15.
ReplyDeleteIf you keep on saying how good craft keg is, with some of you even saying it's better than cask, they'll notice and put a premium on it, and you'll pay it to show your good taste, etc.
@Tandy - some US craft-brewers pasteurise & somehow do it carefully enough not to knacker the beer! Anchor I think is one & I've loved anything of their's I've had.
ReplyDeleteMost I think don't, but do filter, force carb & then do their best to keep the kegs cool & sold reasonably quickly.
@Nev Some outlets sell cask beer at what they can get away with too. Some don't sell well-kept or well-brewed cask beer either.
I don't subscribe at all to the idea that craft-keg is better than cask, but to me, some beers might be better suited to the cooler temps & higher levels of carbonation in keg (e.g. wheat beers & lagers). But 9 times out of 10 I'd go for good cask over keg.
Anchor...funny, my only complaint is how I wish they'd bottle-condition instead of flash-pasteurise!
ReplyDeleteYour question arse over tit?
ReplyDeleteIt should be "why is cask ale sold so cheaply?"
Jeff, spot on!
ReplyDelete"Non craft" keg is also more expensive than cask in the pubs of our local family brewers, of course.
ReplyDeleteLike it or not, some drinkers are prepared to pay a price premium for consistency.
Also at present craft keg has considerable novelty value.
JP says: Your question arse over tit? It should be "why is cask ale sold so cheaply?"
ReplyDeleteReally? If you think that, I wish I had your salary.
Interesting. It is the exact opposite in the US. Buying, cleaning, and using casks is almost identical as kegs for brewers so I do not think the extra cost comes from that end, it probably just has to do with economies of scale. Brewers tend to put money towards equipment for one or the other. This is why I suspect you will never see keg and cask on a level playing field price-wise. One will have to supplant the other.
ReplyDeleteSorry Flagon, but no. It has little to do with actual costs and a lot to do with what they can con us into paying: they'll charge what they can get away with. And if craft[y] keg can be sold as a premium product, and while there are some insane beer bloggers saying we should be charged more for quality products, the prices WILL go up and fewer people will buy it, and we'll lose it all.
ReplyDeleteExcept for you rich aesthetes who'll happily be ripped off if it's a premium product - indeed demanding that you be ripped off - and stuff the rest of us.
You selfish gits.
@rednev
ReplyDeleteWhat I really meant was ""why is cask ale sold so cheaply WITH RESPECT TO MASS-PRODUCED DREK?"
And FYI, I earn piss-all - probably because i work in beer.
Jeff and Jeff. None of what you have said answers my question, so I'll help you out on your basis while you have another go.
ReplyDeleteI having been paying over £3.50 a pint in London, £3.90 in some places. How much under your pricing proposition should I have been paying?
And how much more should the equivalent keg have been?
Now back to the original question.
I don't think Jeff was talking about London cask ale pricing. Our local Spoons for instance still manages to sell a local pint of real ale for under 2 quid...that is staggering.
ReplyDeleteThe point I think Jeff was making is that 'real ale' is undervalued and that is what you should be questioning. I think that this comes from 1) A market that has 600 breweries fighting for the odd Guest hand pump. 2) A proportion of these 600 breweries who aren't that good at maths or running a business.
I can't speak for all brewery owners, but our beer is priced where it needs to be for us to stand a chance of surviving as a business, not what the market will bear and not what we think the punter will be willing to pay. And that price typically works out higher than StellaStaroBecksRubbish once it hits the bar.
Producing beer for the keg does have some technical challenges that do cost more money to solve. You can produce flat beer in tanks that don't take pressure. These tanks are cheap compared to one that is rated to 2 bar.
I can also build you a cask washer in about 4 hours, whereas on the other hand I just spent 10K on a keg washer.
Funnilly enough we had this exact conversation with Dave Porter while on a trip round Outstanding last week.
ReplyDeleteHe basically said that there are ups and downs to his keg operation. In his opinion, cask is easy - brewed, femented, straight into cask, shive in, ready to go. To keg beers after fermentation, the beer needs to be stored for maturation (more vessels needed - especially when doing a lot of lager style keg as Outstanding does), then kegged, pressurised, sealed - all extra work that cask doesn't need.
However, he said on the positive side, some of the ingredients are cheaper (e.g. lager malts). Also there is better turn around on kegs - where casks can go out to pubs for weeks and months before they come back, keg accounts tend to be steady business where he can drop the kegs one week and pick them up the week after.
@RedNev, you may be right, but just repeating your point isn't a very convincing way to make it. What evidence do you have that it's just price gouging? The thought that every brewer who does craft keg along side reasonably priced cask are engaging in some sort of collusion seems pretty far fetched to me. I have spoken to and seen several breweries locally here who do cask along side keg. It usually involves cleaning and filling the former by hand which is why costs more. I'd encourage you to go ask your local breweries just why their kegs cost more if you suspect it's something else.
ReplyDeleteI don't really agree with RedNev either. There are higher costs associated with keg, but that in itself doesn't explain it all away. I haven't made the enquiries, so I don't know what is being charged pint for pint by breweries for their keg product and whether than inevitably means higher prices at the bar.
ReplyDeleteThe other aspect is that keg is usually sold in less price sensitive environments which may allow a bit of margin stretching.
Either way, it is a precarious business model as higher prices are ultimately going to limit any broader extension of keg.
You could probably take a fairly relaxed view of all this I'd say.
Could it be that beer geeks being happy to be fleeced, are indeed fleeced?
ReplyDeleteProduct positioning. 'Craft keg' is a niche product within a niche; charging a premium tags the product as premium so enough punters are prepared to pay more.
ReplyDeleteIt's a self-fulfilling prophecy.
This comment has been removed by the author.
ReplyDeleteWhy the brewers imagine that we should want to pay a quid a pint more for lower quality beer, I have no idea. Enough of us apparently do to make it worthwhile.
ReplyDelete