The Price of Beer

Stan Hieronymus noticed that the comment threads to a recent story in the Chicago Tribune were pretty hot:
[I]t’s interesting to “eavesdrop” on comments posted about beer at a non-beer site.

Yesterday the Chicago Tribune published a story about two new microbreweries in the city. What seemed to get the most attention is that 6 packs of Half Acre beers cost $9. We’re not talking a knee jerk reaction about how that’s ridiculous, but a discussion. Check out the comments.

This in turn provoked some unusual commentary on Stan's own site. Every product has an invisible cost line, and when prices creep over it, there's a backlash. People thought it would happen with $3/gallon gas, but it actually too four to trigger the response. Nine bucks seems to be at or around the invisible line. Perhaps ten is the biggie.

For what it's worth, I think the outrage is misplaced. Until recently, beer prices have been artificially low. The hop and barley price hikes surely forced breweries to raise prices a bit, and the forces of inflation have their effect, too. But nine bucks is probably about right by historical standards. If you convert the price of a $9 sixer in 2009 back to 1990 dollars, you get $5.54. In 2000 dollars, it works out to $7.30. My memory is that the price of beer was probably hovering around six bucks and change a decade ago, and we regularly hit the $7 threshold a few years back. So prices have been low for awhile and now they're headed back to historical norms.

Beer naturally lends itself to class commentary. Beer is a blue-collar drink. This has long put craft brewers at a slightly uncomfortable crossroads--trying to appeal broadly to blue-collar drinkers while charging enough to pay the bills. The association between craft brewing and patronage by yuppies hasn't helped (an association I think is particularly weak in Oregon). But in any case, it looks like this isn't a function of real price inflation but rather a reaction to economic instability more generally.