Single Cask Brews: Manufacturing Scarcity Or Pure Genius?

I just about flipped out when I saw this post over at 2 Beer Guys (from the April 16, 2008 issue of The Coloradoan) about the Odell Brewing Co. (with whom I am not familiar but which I am sure is nice and run by fine folk, and all) doing a limited run of a series of single cask beers – each brew never to be repeated and the cask retired:

…Each batch of the ale, which will have more vanilla and caramel tones, will make enough for only roughly 120 cases before the recipe is retired, creating an exclusivity factor not usually associated with beer. Each 750 mL bottle – hand-corked, hand-signed and numbered – will sell for $24.99. “It’s a one-time kind of thing,” John Bryant, Odell chief operating officer, said of the process they hope will put them at the forefront of the market.

Excellent. Because we all need another mechanism to raise prices through exclusivity. But am I being fair? Am I being a rogue consumer who is too tight with the wallet. I would encourage, first, that you consider two posts by Stan from last January in which he makes a number of points relating to overly limited runs of barrel-aged beer and the effect on price and popularity. And isn’t that very last point, popularity counter-intuitive? Makes me wonder whether some of these high rated beers are a lot like the 60’s – that many who claim to have experienced them were never really there.

But my point is more, I hope, to the point. What is the basis of a $24.99 price tag on these bottles of beer? Is anything else at that price point? I trust that each of you will consider your responsibilities as an active player in the market and avoid artificial inflationary events. And, sure, it will be a price that is paid but so is “jerk tax”, that premium you pay whenever a vendor can get you for one reason or another. Why not $18.99 or $35.99? Using the math from the story, scrapping the barrel after only one use adds 450/1440 or 32 cents to each bottle or about a tenth that the corked bottle does (if what a US brewer told me last month is true.) Are you so out of control that you don’t care? Are you the sort that will run to this, that will try to profiteer even? Or will you just say no? What do you fall back on to make this decision?

One thought on “Single Cask Brews: Manufacturing Scarcity Or Pure Genius?”

  1. [Original comments…]

    Stan Hieronymus – May 5, 2008 8:47 PM
    I agree that it makes no sense to pay more for something just because it is produced in a small quantity or with a high pricetag.

    But reading The Coloradoan the emphasis is on the higher production costs – buying barrels and aging the beer.

    Plus the effort to keep the creative juices flowing.

    In fact, Odell’s does make outstanding beer. But as a consumer (who won’t be here when these beers are released, so won’t even be tempted) I can pass on a $24.99 bottles and be happy to stick to there excellent every day beers.

    Stan Hieronymus – May 5, 2008 9:37 PM
    Make that “their excellent every day beers.”

    It must be time for me to pour a beer . . .

    Knut Albert – May 6, 2008 4:59 AM
    BrewDog in Scotland does something similar with their Paradox series. But not at these prices.

    Andy – May 6, 2008 9:46 AM
    I understand there must be significantly higher costs to brewing these types of beers, as Stan points out. That said, I still believe there is something going on here akin to every other “luxury” item industry; if you sell something really expensive, a) it must be really good and b) if you sell something really expensive and I can’t afford it, I should buy your lower priced goods because at least that way I’m still getting your brand name. Like you said, Alan, there’s a definite element of the “jerk tax” going on here. I know some of these exclusive beers are supposed to be outstanding, but I can definitely live without them. But as long as good craft beer remains affordable I don’t see this as being bad for the industry. It’s just an indication of how the craft beer industry is changing as it “grows up”

    Alan – May 6, 2008 12:02 PM
    The elephant in the room is sometimes these beers are not as uniquely wonderful as one might be told. I can think personally (the only important factor to each of us I would argue) of a number of 4.99 to 9.99 bombers that are indistinguishably wonderful from some priced two to three times as much. All wonderful, none a joke – but value to the consumer needs to be a factor in the market equation.

    Andy – May 6, 2008 1:54 PM
    absolutely, they should have more value. sorry, i was implying that when i suggested people would assume it was good if it is expensive. i just didn’t write my thoughts clearly. no doubt, some of these really expensive beers are no better and in some cases, are not as good as the more conventionally priced bombers. then we can get into that whole argument of is a beer judged by it’s true quality or it’s reputaion…

    Marc Rikmenspoel – May 8, 2008 6:32 PM
    I live in Fort Collins, as old readers of my Celebrator Beer News column will remember, and I am a frequent consumer of Odell’s multi-award winning IPA (somebody needs to send Alan a sample of it, already!). Around here, New Belgium has seen some success for their magnum bottles of La Folie, which sell for $18-25. I imagine these Odell specialties are designed to appeal to the same customers who currently purchase the La Folie.

    JJ – May 8, 2008 7:20 PM
    I don’t really think it’s a problem since it’s not like this segment is replacing beers at a traditional price point and making them unavailable to those of us unable to buy $25 beers.

    We now just have one more choice, in addition to what was already available, and there’s no one forcing you to take advantage of this new choice. On the flipside, if someone thinks it’s worth it, I’m not going to try to stop them from spending their money.

    Plus, with the internet, it should be much easier in the past for these beers to make a reputation for themselves, good or bad, without each one of us having to try them. If one of you here on the comment stream reviewed it and said that it was expensive but worth it because it was the best beer you ever had, I might go try it. If you said it was average, I’d save my money.

    And on a related thought, small-volume, high-margin products (which I’d assume this is, though I don’t know their margin on it) like this can help brewers make up for the margin cuts they’re facing right now due to ingredients prices. So, if Odells can sell out on their $25 beers, it means that they can afford to buy enough hops to keep making a reasonably priced IPA I might buy.

    So, I think it’s an all-around net gain for beer drinkers that these beers being available. I’m not sure if I’d be a fan of the beers themselves, I think I’ll wait to see what the early adopters say.

    Alan – May 8, 2008 9:05 PM
    I can’t think of another consumer market in which the raising of prices without direction connection to costs would be so welcomed. And, given each beer will be limited to 1440 bottles, if you wait for the early adopters to speak it will be too late – creating artificial pressure to spend, even at more than 100% increase over even La Folie – presuming by magnum Marc means 1.5 litres.

    Marc Rikmenspoel – May 10, 2008 3:00 AM
    Actually, the La Folie bottles are 750ml. They are like Champagne bottles, I’m uncertain about the technical term for those. Sorry for any confusion!

    Alan – May 10, 2008 10:05 AM
    No problem – the names for the sizes of wine bottles like the sizes of Aussie beer glasses are a complexity which likely do not need to hit our fair shores in North America.

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