Price bubble?

Theres no bubble if people are willing to pay for it.

 

you raise a good point. i'm often surprised by the low quality that many new breweries are bringing to the market when the price point on these mediocre offerings is that same as much higher quality offerings from stone or firestone walker, etc. it may not be a bubble per se, but i think that some of these folks churning out slightly better than average home brew are going to run into trouble sooner than later.

 

That's fundamentally ridiculous.

 

There's absolutely nothing unreasonable about that at all. It's the new breweries dropping ten dollar bombers of their regular offerings that will be in trouble.

 

people will pay whatever they think is affordable, then that bubble will burst. Then we have the stock market crash, housing market burst, etc or whatever.

 

There is a limit to what people are willing to pay but it has not been hit yet. If it was, we would see prices coming down across the board, not continuing to rise. I think some of the average to below average stuff is eventually going to see an adjustment; either that or a bunch of them are going to go broke.

I know my limit has been reached. If beer gets much more expensive, I may find another hobby and go back to cheap macro shit exclusively. I can afford the beer(at least for now), but don't know how high I'm willing to go.

 

I don't think anyone could really argue that there isn't a bubble. But will it pop in the foreseeable future? I would say no.

The 'pop' is typically sparked by concerned and apprehensive investors. The vast majority of the craft beer industry is still privately owned/controlled though.

There may be an eventual decline in price but a pop? I'm not sure how that would even look...

 

I know that I will buy Great Lakes 6-pack lower gravity seasonals (Oktoberfest, Christmas Ale, and Holy Moses) in NC. I just bought Oktoberfest at 8.99 for a 6.

 

I fixed that for you.

 

Are you ready to get into a debate as to whether markets are fair and rational?

 

Wouldn't that only apply if people are investing in beer? A small fraction may be, but most people are only going to pay what their budget allows.

 

Of course! I responded that way simply because his original post was logical flawed:

An increase in prices does not automatically lead to the conclusion that there's a bubble, but the presence of people willing to pay the price does not mean that there isn't a bubble.

 

Eventually enough capacity will be in the hands of people who can produce quality product and the $10 bottles of mediocre beers will either be at a lower relative price or the company will be out of business. (Will also need that same capacity in quality hands for the "buy (hype) mostly local" segment of the beer geek population.)

 

As prices creep up then I see people mostly sticking to what they consider "best", and there's some rather solid trends on best beers and breweries out there. The flip of this is that people will be less inclined to drink the mediocre stuff, especially if it was only fueled by motives of "buying local" and such.

 

I'm dumber than that kid you knew growing up that had a pet rock, but if EBay stopped "allowing" the sale of beer, would that help the craft price market at all?

My pockets are stretched THIN, but I still buy what I want, and if I can afford it, I'll trade. When purchasing beers lately, I've been deciding more often than not to buy a couple to share one with friends now and cellar one for later, rather than to stock up and hoard for the future.

 

I am in the same boat porkinator. 6 months ago or so I was buying as many BCBCS, Brambles, KH's, etc as I could and now I buy a bottle of something new just to try or maybe 2 if I want to cellar one.

 

The sort of price mentioned by the OP would be considered quite cheap here.Price doesn't seem to affect sales too much.
The supermarket I visited today was running an offer of 4 bottles of everyday beers (500 ml) for roughly $9

 

If a craft brewery offered a $5 or $6 six-pack, I would be all over it. That is about all I know about the subject.

 

From the production side, there is so much more that goes into pricing than what people are willing to pay. Price of ingredients, overhead, debt service are all factored in to what a product sells for. As far as beer is concerned, the 3-tier system also provides an additional price bump between the brewery and the consumer. It may take some time since craft beer is growing but eventually the overpriced less desirable products will sit on store shelves, in warehouses, and at the brewery. Soon enough, these breweries will either get the message or fade away. A bubble exists, I believe, for the rare seasonals and extremely limited distributed beers. But when there are plenty of people to take the place of people who will no longer pay the price, the bubble abides.