Happy New Year! Happy New Beer Price!

29 December 2014
1 comment

Happy New Year! Happy New Beer Price!

Merry Kegsmas!

 ... and a happy new beer!

 

2014 was really something, especially for craft brewing. There were exciting developments all over Ontario, but nowhere more so than right here in Hamilton.

 

We started 2014 with just one lil' nano brewing operation in our city.

 

It was, of course, The Ship, which was brewing up occasional batches of the award-winning Ships Rations on a tiny-towne brew system with our Brewer at the helm. We began brewing at The Ship in 2013, the same year that The Shed announced their plans for their as-yet-unbuilt brewery in Dundas. Before these developments, Hamilton had been without locally produced beer- or even the hope of locally produced beer- since 2010. That dark year in our history (“2010” Imperial 'Empire' Stout anyone?) was the year that Labatt achieved cartoonish super-villain status in Hamilton by ruthlessly gutting our historic Peller brewery on Burlington street. The brewing equipment was removed, but they didn't stop there. They also pulled out the wiring and plumbing, ripping the very veins of the building out to ensure that no one else ever made beer there. ever. again. They probably also “Burtonised” the very earth, but we can't know for sure. Hamilton entered a dark period, roughly equivalent to Episode V: The Empire Strikes Back.

 

We broke that dry spell, in our small way, in 2013. But the times were still dark. Still, like a tiny hole in a massive dam, our small trickle of local beer was an indicator of the flood to come... The Shed was announced, which gave us hope. Shortly after that, The Hamilton Brewery (THB) announced their plans to build a brewery! 2013 brought us hope, but we still began 2014 with only our scrappy little nano putting out a dribble of beer...

 

 ...and we are finishing 2014 with no fewer than SIX new breweries of various types either opened or announced!

 

BOOM:

The Shed is still working away at, from what rumor holds, is a massive, knotted ball of red tape. (That's no moon...)

 

Arts & Science was announced in March – this was the big one!!! They are going to defy Labatt and restore life to the empty shell of the Burlington Street Brewery! They hope to open in 2015 (with an Ewok dance party?) and officially end Labatts 5-year long history of cruelty to our city. Wooooo!

 

We launched in April (!!!) ,

 

THB launched (Now as a contract brewery, like ourselves) just recently at the end of November,

 

BRUX opened its doors at the same time, with plans to open and operate a nano (Which will be nice, because the nano operation at The Ship was forced to shut down in 2014, leaving us without a nano in the city.)

 

…and finally, our friend Brad Clifford announced in early December that he will be joining us (and THB) as contract brewers based out of Hamilton! We will welcome Clifford Brewing to Hamilton in early 2015!

 

We also got our first full-scale beer festival in 2014! Because Beer was incredible, and an incredible boon to the beer culture of Hamilton. It's set to return, and to be even better, in 2015!

 

2015 is totally our Episode VI year! It's The Return Of The Brewski, cats and kittens! Also- did you know? We are getting a new Star Wars movie in 2015 as well... it looks pretty OK and my enthusiasm for it may be affecting my writing style. Well, enough of that, lets talk about the new year- I've got a GOOD feeling about this!

 

We intend to not just be along for the ride in 2015, but to continue to lead the charge! And we're starting with a great new price: 140$ a keg. (Dropped from 155$ per 30 liter keg) 

 

This price puts us more or less in line with the current Ontario "standard" for a 30 liter keg of craft beer. It is -as near as we can figure- about the average price. We decided to drop our price after several months of sales and experience. Explaining why should perhaps be it's own entry, there is certainly enough ground to cover that it could make up a whole different blog post, but it would likely get tedious. Still, I'm assuming anyone coming here actually has an interest in reading some of that "how your sausage gets made" stuff, so I'll cover it in brief.

 

The short version is that publicly listed keg prices (upon which we based our price) are not necessarily the prices that licensees actually end up paying- for a variety of reasons. So, we priced our kegs too high, and as a result our beer was more expensive for you to buy. We're hoping that with our new price, some savings can be passed along to you when you order our beer! We are big believers in beer, and we cherish the idea that beer ought to be accessible and affordable! Inexpensive to buy and easy to share! As such, we'd like to price our beer as low as we can while still remaining a viable company that can continue to exist, and to create more beer! This is a difficult task for any brewer, but we're finding it especially difficult as a small contract brewer. Still, we know we can do better. Thanks to all our licensees who ordered kegs, and to all the beer drinkers who ordered a pint of our Piperales in 2014! We promise we'll do the best we can to get you the best beer we can at the best price that we can possibly manage. 

 

The longer version (skip to here if you're tired of this already): something we've learned in our pricing adventures that surprised us is that -often, but not always- craft beer is "The Cheap Stuff". For example, the most up-to-date beer store licensee prices at the time of writing places a 30 liter keg (before taxes and deposit) of Stella at 176.06, A 30 of Steamwhistle at 122.96, and Cameron's Cream Ale, Lager & Auburn Ale all at 115$ for a 30.

 

"Whoah" you might be saying, "I buy craft beer by the keg all the time. I especially like to get Steamwhistle by the keg, using their awesome home-delivery service, and I pay 178.95 for a 30, plus a 59.95 charge for delivery to Hamilton. That's 238.90 total!"

Well, sometimes craft brewers charge a bit more for home customers to account for the fact that their kegs are usually gone a much longer time, and are perhaps a little less likely to come back. Sometimes they don't.

In Steamwhistle's case, that price includes tax and:

  • Equipment setup and pick-up services
  • 1 x 12 kg bag of ice
  • Steam Whistle beer cups
  • Loan of draught equipment with tap handle

That- my friends- is a pretty darn good deal.

 Licensee customers (Pubs, bars, restaurants, ect) buying Steamwhistle from the Beer Store pay 188.95 after taxes and keg deposit, but they won't pay for the delivery (as private customers will) and they probably aren't getting any of the other stuff...  but maybe they are. It's not uncommon for breweries to provide glassware, coasters and other small items to help the bar promote their beers. We ourselves will provide glassware and taphandles to our licensees who want them... and I don't think that there is anything sketchy about that.

 

But, depending on who the licensee is, and what brewery they are ordering from-  maybe they are getting more. Maybe- a lot more.

 

Basically, it's all up for negotiation. Every licensee is potentially able to say to any brewery at any point: "What can you do for me?" and the volume of beer that they could likely sell for the brewery is their leverage. They might sell their tap lines like billboard space, they might expect a better price, free kegs, or tickets to sports events. They might think all of this is normal, because, rather sadly, it is. This highly competitive and secretive environment can make it challenging to set a fair price. How do you even know what the going rate is when there is so much smoke and mirrors? When "buy 4, 3 or even 2 kegs and-get-1-free" type deals abound? With kickbacks and aggressive beer reps offering presents of booze, fancy meals, trips, and whatever else they can muster? 

 

It's tricky, but after alot of confidential talks with good people on both sides of the equation, we feel that 140$ is the reasonable number. One where we can still afford to brew beer, bars can afford to buy our beer, and you can expect to pay a reasonable price for your pint.

 

In case it is not already clear, I suppose I should clarify that this sketchy behavior is not legal, and we are not interested in participating in (nor can we afford to participate in) this particular race to the bottom. Any place you find Garden Brewers beer on tap is an establishment where they decided that they wanted our beer based on the merits of our beer!  Not on the merits of our money. 

 

You know, I would like to take a moment to thank all the licensees who ordered our beer in 2014- even at our relatively high price. Thank you so much to:

Iggy's Pub and Grub

The Ship

Supercrawl

The Tavern On George

The Winking Judge

Homegrown Hamilton

The Brain

The Casbah

The Rhino

Das Gasthaus

Bar Hop

Buster Rhinos

C'est What

Food & Liquor

WVRST

Imbibe

Tall Boys

The Brooklyn

The Grapefruit Moon

 

Of course, a huge thanks also to all those who ordered a pint (or two!) of Piperales from one of the above establishments!  You make all this possible, for bars and brewers alike! (Of all those who ordered pints, about 200 of you shared your opinions of our beer on Untappd, and we're very happy for the feedback. Cheers!)

 

If 2014 was the year of of the Ontario craft beer boom (and looking at this kind of data from Mom and Hops, which lists 44 new Ontario breweries opening in 2014, and a 22.7% increase in Ontario craft beer sales at the LCBO over last year, I think it's safe to say it was) then I think that 2015 will be the year of craft beer maturation in Ontario.

 

My Mom has a tradition of making "New Years Predictions". If I can cast my own "New Beers Predictions" for craft beer in Ontario during 2015, I think we're going to see good things- but with significant growing pains.

I predict an improvement in some the brash and enthusiastic, yet too often unbalanced or mediocre offerings of some the the new brewers. This long-overdue deluge of new breweries we've been enjoying will continue into 2015, but alongside all of the openings, I think we'll start to see the first closings. Competition is already unprecedentedly fierce and it is only going to increase- for shelf space, tap space, and mental space alike. (I live and breathe beer and I can't even keep track of all the new brewers, let alone all of their beers!) The new brewers that have been struggling with quality and consistency will find their feet this year, or they may very well be forced to close their doors. Other brewers with excellent beers may also be brought down this year- by everyday business issues, exacerbated by a highly competitive environment. Cash flow has killed more breweries than microbial contamination, after all. Additionally, we will see more entries by the macro brewers into the growing craft beer market,  which will only further crowd the field. 

There have never been so many players as there will be in 2015, but there has also never been so much reason to expect that the playing field itself will change too!  Never before in Ontario has consumer interest and awareness been so high! These game-changers are real wildcards with wide reaching and difficult to predict ramifications, but I think overall that there is no reason for anything but optimism! 2015 will be a great time to drink beer in Ontario, we will all enjoy variety like never before, including locally produced beer options that just didn't exist previously. There will be changes, with unexpected consequences, but there isn't any reason we shouldn't expect that anything less than the best beers ever made in this province will be helping us cheer in 2016!

 

Here's to the future!

 

Cheers!

-The Garden Brewers

1 Comments

30 December 2014 at 11:33 AM
Christine Brackenbury

Thank you for a very interesting and fast paced overview of the brewing business. Business in general during these crazy times, really. Best wishes for the coming year.

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