Beer has historically been perceived as ‘the drink of the working man’ and, as such, has been expected to be cheap and accessible to all. But is this still the case now? ‘Cheap’ beer is certainly still available – just walk in to your nearest ‘cut-price’ local – You might strike lucky, but the vast majority of the time you will receive a competent but bland and ordinary pint. To get a pint that’s finely crafted and bursting with flavours, you should expect to pay more. We will try to convince you why in this article!
The recent BeerHeadZ in-house survey established that 84% of our customers consider quality over price of greater importance. Yet some pubgoers still complain about the cost of their pint; Why should they pay more than a ‘pub down the road’? Well, firstly, you’re probably not getting like-for-like. As mentioned above, your £2.80 isn’t generally going to get you a beer that’s bursting with the hop flavours and aromas that we’ve all come to love. You’ll most likely get a brown, malty, insipid old-fashioned beer. And for some, that’s just fine. But, if you want flavour, you just HAVE to pay for it. It mostly comes down to ingredients and craftsmanship. There may be a bit of profiteering by some brewers, but as in all purchases, you pays your money, you makes your choice. Let’s have a closer look where the beer costs come from.
It’s hard to pin down, but for simplicity’s sake let’s say the ‘craft’ revolution started ten years ago, a nice round number. So, what’s happened in the last ten years? Beer prices, on average, have risen 86p (source: Office of National Statistics). The average price of a pint in Nottinghamshire today is £3.67 (source: 2020 Good Pub Guide), meaning an average pint was £2.81 a decade ago, the average year-on year increase being a little under 3%.
Apart from taxes and duty, there are many other major factors to take into consideration affecting the rise in the price of your pint. For brewers there has been the rise in the price of basic ingredients, particularly hops, fuel (gas and electricity as well as diesel) and the general rise in the costs of running a business. For the pubs there have been continuing increases in rents, staff pay, pensions, licenses for this, that and the other. The onslaught is relentless, and you should not underestimate the constant pressure some pubs are continually under. The drastic drop in footfall is another major factor – people are simply not using the pub as much as they used to only a few years ago. This creates a vicious circle: Less customers leads to price increases to keep business afloat. Increased prices put even more customers off, the cycle goes on.
Many brewers are just managing to eke a living from their business. Dean Baker, brewer at Baker’s Dozen who runs his one-man brewery in Ketton, told us that he considers brewing “a labour of love” rather than a proper money-making business. Indeed, many smaller brewers are making between just £11 and £13 (the cost of around three pints!) on a firkin (nine gallons) of beer which is sold for a fair price, or around £200 per brew day (not every day is a brew day, many breweries only brewing once or twice a week). Not a lot for a day’s back-breaking graft, when you consider a skilled joiner or plumber could probably command £250 every day.
Firstly, let’s look at just a couple of the brewer’s costs:
a) Duty – Around 49p of a £4 pint is tax (source: Campaign for Real Ale); The Government’s beer duty escalator alone has seen a whopping 42% increase in tax on your pint since 2009. b) Hops – Although the price of hops has come down in recent years, the shear amount of hops going into some beers is staggering; We recently sent our managers on a BeerHeadZ brew day at Baker’s Dozen. Almost £400 worth of hops went into the 18-cask brew, equating to a gob-smacking (literally) 27p worth of hops IN EVERY PINT! These two alone take up 76p worth of your pint!
Gazza Prescott, formerly brewer at Steel City/Hopcraft/Pixie Spring and now brewing together with Sue Hayward as Team Toxic, explains the difference between bulk and craft beer far more eloquently than we ever could (big thanks for his contribution to this article):
1) Why people should expect to pay more for quality beer nowadays.
First off, let’s nail a common misconception… quality in beer isn’t how hoppy or sour it is, but it’s how well it’s made! This is often overlooked by modern beer aficionados who relate price and flavour impact with quality, but surprisingly it’s usually the big brewers, with their money to invest in laboratories, modern and efficient brewkit and cutting-edge cleaning/process enhancements, who make the technically ‘better’ beer. Their bitter might not taste as good as your kiwi milkshake IPA, but it’s probably – technically – a better beer with less wild yeast, bacteria and off-flavours and longer shelf life and higher stability, both much prized by retailers.
In general, beer is made to either a budget or an ideal; these are mutually exclusive and aren’t easy to reconcile. Craft brewers are, in general, very creative and invent recipes to give maximum flavour and maximise the aspects of character they want the beer to exhibit. If a budget dictates the cost of the beer compromises will invariably have to be made by cutting ingredients to fit the budget. Both are totally legitimate ways to create beer, but to create interesting, quality and boundary-pushing beer the recipe dictates the budget, not the other way around!
Thus, beers made under the brewer’s absolute control (i.e. not to a controlling budget) are generally the ones which have the most interest and flavour, and those which are of interest to so-called ‘craft beer’ drinkers. So, the rule goes that if you want more interesting, flavoursome beer then you’ll have to pay more for it, but price doesn’t guarantee the beer will be of high quality or actually well-constructed… although you’ll invariably be getting an interesting brew.
The final aspect is that people mistake “good beer” with “beer I like”; this means people saying some beers they don’t like (sours are a common one!) are “rubbish” whereas what they really mean is “I don’t like this beer/beer style”. It’s a huge difference and distinction must be made between well-made beer and beer you actually like the taste of! After all, American Budweiser is, according to various studies, the most consistently made and of the highest benchmark quality in the world, despite most beer lovers thinking it’s rubbish – the quality is top-notch, but the recipe and flavour isn’t aimed at the craft beer market!
But, what is ‘craft’? The best definition I’ve heard is “the brewer creates his recipe and makes the beer to reflect his recipe; if he works out the cost and decides to reduce things to make the recipe fit a budget then the beer is no longer craft, it’s commodity”.
2) How other brewers’ beers compromise on ingredients to keep prices down.
Making beer is both a process and an art form; to make the best beer you need to be on top of your game for both, sidelining one in favour of the other will invariably mean the resulting beer is lacking in some way. Quality costs money, and brewers who aim at the cheaper end of the market are, by necessity, going to have to find ways to cut the cost of making their beer, whilst those who are aligned to the ‘craft’ sector – where price isn’t necessarily a problem – can afford to invest more in the beer to get exactly what they want from it rather than what the budget dictates.
Process is a nebulous term but encompasses everything from the raw ingredients via the brewkit itself to the procedures used to make the beer. Each of these steps is essential, but to make cheaper beer you can use cheap (and therefore, in general, poorer quality) ingredients, compromise on the equipment used to make the beer, or cut costs in the processes used to make the beer. The actual brewkit tends to be the part where the bigger companies, with their reserves of cash, can make big efficiency savings by investing in better – and more efficient – brewkit whereas smaller brewers generally have to make do with more basic and inefficient kit. The process in making beer is hard to cut costs without risking the quality of the final product, but money can be used to ‘buy’ efficiency in some areas.
Art form is even harder to pin down but, in essence, it’s the recipe for the beer, the raw ingredients, and any extra processing required (barrel ageing, dry hopping etc). This is the part which is usually trimmed to make cheaper beer and there are many ways to go about that.
- Malted barley is the major expense of a beer, giving the sugars to make the alcohol and a lot of the flavour, so cheaper malt is used to ‘bulk out’ the recipe, with additions of small amounts of more flavoursome malt/grain (unmalted grain is cheaper than malted grain as it hasn’t undergone the extra malting process) to make up for the shortfall in flavour. Any loss of efficiency with cheaper grain would be offset by the expensive brewkit used by big brewers which is better able to wring every last drop of sugar from the grains whereas small brewers’ kit simply can’t do that.
- Hops are the second major expense for a brewer (but not usually a big brewer!) To reduce a hop bill the usual tricks are to buy cheaper hops but utilise them more efficiently in the expensive brewhouse, use hop extracts which are much more efficient and cost effective than actual hops, or simply use less hops over a period of time, reducing them slightly each brew, so the customers don’t actually notice the reduction over time.
- Other costs involved in brewing are things like yeast, cleaning chemicals and clarifying agents which can be bought in bulk by big brewers to reduce costs.
- Process is an area where efficiencies can be made and is accepted as the second big ‘cost’ of brewing; say a beer needs two weeks’ fermenting/conditioning time (generally called ‘tank time’), where every day is budgeted to cost £1000, the obvious thing to do is to reduce ‘tank time’ overall by speeding the process up via efficiencies or things like genetically modified yeast which can ferment the beer in a fraction of the time conventional yeast takes, saving lots of money by freeing up tank space to push more beer through the system. Processes like ‘barrel ageing’ take months but can be done with powdered/chipped wood instead which, with the increased contact area of the smaller particles, takes much less time to achieve a similar (generally less good but ‘acceptable’) result.
So, as you can see, there are many ways to make cheaper beer, but all have implications on the beer’s eventual flavour. Luckily for the bigger brewers, the market they are chasing – the bulk, high throughput draught market – cares less for flavour and interest, valuing instead cheapness, ‘bang for buck’ (a hideous term which means, in essence, the most alcohol for the price paid) and ‘drinkability’ which translates as ‘not tasting of much’ so it doesn’t scare off those who want their beer to taste of as little as possible….
The differences between this market and the craft market are plain to see with, in plain terms, the big brewers’ markets favouring cheapness and lack of flavour whilst the craft market demands maximum flavour and creativity. The latter costs money, which is why the big brewers struggle with making inroads into the craft market, not understanding that cost reductions in craft beer mean the beer is, in essence, no longer craft but just more bulk commodity beer.
Many people’s perception of ‘value for money’ in beer prices is skewed too. Until fairly recently, the logic was ‘the stronger the beer, the more expensive it is’ and generally, like-for-like, this has been true. However this is no longer the case. Two beers with the same strength are not going to have the same price when one has been mass produced with compromised ingredients and the other lovingly crafted with the addition of bucket loads of different hop varieties or barrel aged for two years in bourbon casks. There are going to be big differences in pricing.
It is also the case that some pubs are, consciously or unconsciously, selling beer at an unrealistically low price; either because (a) they are incompetent in pricing beer (e.g. if it’s X.X% it HAS to be priced at £X.XX – the old strength/cost argument mentioned above); (b) they don’t price their own overheads correctly, or (c) they sell beer as loss-leaders.
Back in 2017, the Rake Bar in London made National headlines after selling a beer for £13.40 per pint. Since then it’s not uncommon to see craft products priced at £15 and upwards, one even being spotted in Nottingham at £24, but consider this; If you went out to a restaurant and bought a bottle of wine for £15 or £20 you probably wouldn’t bat an eyelid. Surely a pint of a lovingly crafted beer, matured in oak vats for three years with the addition of Madagascan vanilla pods and other exotic ingredients can command the same type of premium? These beers aren’t quaffing beers. They’re designed to be savoured.
Going back to that average pint price at the beginning of this post of £3.67. Say the average person goes out and spends an entertaining three or four hours in the local and buys four pints. That’s less than £15 spent. What else could you get for that money elsewhere? Let’s try to compare…
- Cinema ticket: around £8
- Cup of coffee: £1.45 – £3.45
- Two-course Indian takeaway: £20ish
- Football home match £30ish
- Pizza £20
In comparison, a night out at the pub still looks pretty good value for money!
Away from the gritty economics of how much ingredients and processes cost, let’s consider the part the pub plays. We’ve already briefly mentioned the unavoidable day-to-day running costs of a modern pub. But if you’re lucky enough to have a local that serves exciting, tasty, innovative and flavoursome beers from the country’s top brewers, these beers don’t appear out of nowhere! The managers and landlords take the extra time to source these beers from all over the country. They need to know what’s going on in the beer scene, who the best brewers are and where the latest trends are heading. And they also need to have the skill and expertise to serve every single pint in the right condition. These things also take care, time, skill and passion – qualities that may not be an identifiable ‘cost’ on a spreadsheet but should surely be able to command a small ‘premium’ over other pubs that may be a bit cheaper.
Moreover, the pub serves a much bigger value than just a drinking venue. It’s somewhere you can start friendships, avoid loneliness, find a plumber or builder, play games, listen to bands etc. and have an opportunity to listen to a load of grumpy old blokes moaning about the weather, Brexit, and even, err, beer prices! All these qualities are priceless. The pub is a place of genuine enjoyment and long may it continue.
Next time you’re in a pub which may appear a little pricier than other establishments, please take time to consider the points made here before deciding whether your beer is too expensive or not. Remember, pubs are still closing at an alarming rate and your custom is needed more now than ever before. Who knows, if pubs get more customers, they may be able to drop their prices!