Carolina Beer Guy: Local beer costs continue to increase

It has been almost 25 years since the first pints of Highland Brewing Co.’s Celtic Ale (now Gaelic Ale) turned up in taprooms and restaurants around town, launching the Asheville craft beer revolution.

In those early days, only a few selections were available. Today, however, hundreds of area craft beers are on sale, both on draft and in cans and bottles. But while there are many more brews from which to choose, they cost noticeably more than they once did.

A six-pack of craft beer will often fetch $9.99, up from around $6.99 two decades ago. And a pint has increased from $2.50-$3.50 to about $5, while some specialty and higher-gravity beers are even more expensive.

The reasons for price hikes are numerous. Ingredients are more expensive. Weather can be tough on barley and hops crops. The cost of packaging and distribution is up, according to brewery owners, and labor is also a factor, especially in a competitive market like Asheville. It all adds up at the cash register.

“The price has gone up because costs have gone up across the board,” says Asheville beer pioneer Oscar Wong, founder of Highland Brewing. “When you have a bad hops harvest, the price spikes. The thing that we are facing today is that the big breweries are locking up certain kinds of hops, and that makes it hard for the little guys.”

Wong believes that craft brewers could eventually face a limit on what they charge for a six-pack or a pint of brew but adds that what that number is remains uncertain. “It’s all a function of what options are out there,” he says. “If it goes too high, some [beer consumers] might start drinking wine.”

Beer price hikes are nothing new. A report published in the Nov. 20 issue of USA Today tracked the price of a six-pack starting in 1954, when the cost was only $1.63. But adjusted for inflation, the cost was actually $11.67. The report finds that the real price bargains were found in the 1980s. In 1989, a six-pack was $4.76, which inflation adjusts to $8.32.

Asheville Brewing Co., which has been turning out beer for 20 years, is also no stranger to price increases. When company President Mike Rangel took over the old Two Moons Brew-N-View in 1998, the average pint price was $3.50. “We did specials for $2.20,” he says. Today, Rangel charges $4.50, with Perfect Day IPA going for $4.99. The brewery charges $9.99 for a six-pack.

“It’s the cost of living in general,” Rangel says. “It costs more for the aluminum for cans. Certain hops are more than they used to be. And the labor market is more competitive. You want to train and keep great brewers — they’re salaried positions with benefits.”

Despite the elevated figures, Rangel says the price of beer in Asheville is an “absolute bargain” compared to what is charged elsewhere. “If you were in Charleston, beer is $6 or $7 a pint because there’s a smaller craft beer impact,” he says. “Here, there’s a lot of competition.”

Rangel and his Asheville Brewing colleagues use a computer program to determine what its brewing expenses are and what it charges for beer — including Tuesdays, when select house beers cost $2.99 a pint — but they don’t monitor what other brewers charge. “That can drive you crazy,” he says. “We work within what we feel is a fair profit margin.”

As for New Belgium Brewing Co., spokesman Michael Craft says Asheville’s largest brewery hasn’t significantly raised its prices. On the local scene, a six-pack of its flagship Fat Tire Amber Ale sells for $8.99-$10.47, depending on the store.

“I don’t think it’s gone up much, but it hasn’t gone down,” he says. “I can’t think of anything that I choose to buy that has done down in price.”

Craft adds that consumers decide what they can afford to buy based on their own financial resources and that the craft beer scene reflects a healthy economy. “When folks are feeling financially secure, they tend to spend money on enjoyable items,” he says.

Like many breweries with a wide variety of products, Catawba Brewing Co. has a range of pricing. “White Zombie [Ale] sells for about $10 per six-pack at retail. Specialty beers are priced at $12-$14 for a six-pack. And our one-of-a-kind barrel release products like Apple Pie Barleywine sell for $16 or more for a four-pack of 16-ounce cans,” says co-owner Billy Pyatt.

But within the array of offerings, Pyatt says Catawba has held the line on prices for its flagship beers and feels that the dollar amounts tied to its rarer and deluxe products are merited.

“We have really stepped up innovation efforts over the years,” he says. “We now offer many, many more higher-value beers than ever before. So you could say that our mix of price levels has certainly changed to include more higher-priced offerings.”

Pyatt says his pricing is determined by a number of factors. Catawba considers the markets it’s trying to reach with every beer, investigates products and prices that already exist in these markets and tries to position the brewery’s own pricing to be competitive. Then there are the costs of ingredients, packaging, labor, shipping, taxes and overhead.

“We are getting squeezed by raw materials and packaging increases,” Pyatt says. “However, market forces may not accept [price increases]. There are 7,000-plus craft breweries out there, each offering their own unique beers and price points.”