Beer Prices

I just finished a tasting of Hair of the Dog's Adam. The beer is priced a bit steep at $5.00 a bottle, but it is 10% abv.

Today I went to BevMo and saw that Stone increased their prices this month, so that it now costs $13.99 for a six-pack of Oaked Bastard, and almost $10.00!!! for a 6-pack of their 4.4% abv Levitation.

Why should a 10% beer cost twice as much (or more) than a 7% beer? Well, for a brewery like Hair of the Dog, where all but one of their beers are high ABV, it takes increasingly more malt to get the required fermentables from their beer. Breweries in London around the turn of the century had offerings of both high and low gravity beer, and they used the same mash to produce 2 beers with the early runnings going toward the higher gravity beer, and the later runnings saved for lower gravity beer. Brewing in this way permits the brewer to extract the maximum utilization of the malts they use, but it requires 2 boil kettles or somewhere to store the wort and isn't used in the US by craft brewers I have heard of.

High gravity beer also takes longer to ferment and since Adam is conditioned in the bottle, it takes longer to cellar the beer before it is sold.

So the same facilitty can produce 3-4 times the amount of force carbonated beer at 4.4% than it can a 10%, bottle conditioned beer.

Where Stone can make a bottle of Levitation for 25 - 40 cents in under a week, but charges over a dollar at wholesale, a bottle of Adam probably costs well over a 80 cents a bottle and requires several weeks before it can be distributed and probably sells for $2.00 at wholesale.

Visit: Pizza Port Carlsbad

My wife and I had a few hours without the kids last night so we went to Pizza Port, rated the best small brewery in the US at the recent American Brew Festival. The pizza was great, I had a pint of the California Honey beer, which was very good. The problem is the place is so crowded (on a rainy Wednesday night) that my wife doesn't ever want to go back.

From an owners perspective, having standing room only, everyone with a pint in hand, is a good thing. I wouldn't expect them to change anything. How much money flows through that place each evening/week/month I wonder:

We paid $22 for a ceasar salad and a 3 topping medium pizza, plus 4.25 for the beer. The pizza was baked in a normal conveyor pizza oven, so I imagine the gross margin on it was 80%, and the margin on the beer must be at least 80%. Our only staff interaction was an order taker for 1 minute, a bartender for 1 minute, and a bus-boy for 15 seconds. Of the $27 we paid, I estimate that 21.50 was gross profit. If my wife had had a beer it would have been $25, or 12.50 per person.

The capacity was listed at 145, and I am sure that they were at capacity or above it. People appeared to be staying for ~1 hour which permits 3 turns easily since we arrived at 6:30 and left at 7:30 and the place was still crowded. During nice weather more people can fit comfortably since they have at least 40 seats outside. So 145*3*12.50 = 5437 per evening. Lunch should bring about 1/6 that (smaller portions, less alcohol, fewer turns), so roughly $1000. I saw 8 staff members, each probably paid ~ $12/hr (burdened cost), and working 12 hours per day, for a labor cost each day of $1150 (Excluding management). That makes for a daily gross margin after labor of $5400 on weekdays, probably $7600 on weekends, that is $42k per week in gross margin, or $182,000 per month, probably quite a bit more since I think my estimates were conservative.

Not too shabby.