Maybe New York City is known as “The City That Never Sleeps” because so many people are out getting smashed at the bars till 4 in the morning. The tavern-per-corner ratio in the city is, perhaps, only rivaled by Chicago — Manhattan Island is practically floating on booze, like a pretzel caught in the foam of a beer. And there’s something not-entirely-new that’s almost entirely in place, from alehouse to alehouse: The cost of a decent craft beer is usually $7, or as I like to pronounce it, Seven fucking dollars? Sound the alarm, because that’s a hefty price for most Americans who prefer their kidneys to face more resistance than Bud Light offers.
It should be noted that American consumers pay less for alcohol than most industrialized nations and that many advocates for higher taxes on beer, wine, and spirits believe higher prices would lower drunk-driving deaths. For those of us who don’t drive drunk, there’s an Millian utilitarianism at stake: If I want to do harm to myself, and myself alone, let me do so in peace. And, to boot, for a fair price.
This struck me as I bar-hopped around New York recently. (I’d say that, after years of living and visiting the town, my barroom analysis could be seen as less anecdotal and more statistical.) Seven bucks for a pint of American brew is the new normal and, really, it’s a baseline: Pale ales, lagers, and wheats hover around that price point, while some IPAs, stouts, Belgian-styles and so forth are anywhere from $8 to $11. It being New York, there are surely $20 pints to be found somewhere.
And, yes, New York City is more expensive than just about anywhere else — you might be lucky enough to live in a land of $4 crafts. And, yes, there are outliers, even in New York: A place like Skinny Dennis, in Williamsburg, offers deals on beers around-the-clock, but especially at happy hour. Still, if youre a serious beer drinker, you know that $7 is what you’re faced with, from Blind Tiger to Barcade. (And I’m not talking about the Yankees game or the oomst-oomst club: just your average watering hole.) New York City is doing it now, so it’s coming for you, too, wherever you are. It would seem that prices are only going to go up.
But what does it mean? Are people still willing to pony up for a glass of craft suds in lieu of a cheaper High Life? Will the prices ever come down? Is there a proverbial bubble on the verge of bursting? I reached out to a few brewery insiders for their takes.
First, the data: IRI, a Chicago-based market research firm, hit me with a chart right out of a graduate-level statistics class. The gist is, craft beer sales continue to rise — even through tough economic times. The numbers are staggering. For multi-outlet store sales (including supermarkets and the like), craft beer sales for the past year — the 52 weeks ending July 12th — have shot up 20 percent over the previous year. Overall beer purchases — which include domestics like your Millers and such — have increased only 3.6 percent overall. (If you’re looking to invest in the space, perhaps open an orchard: Ciders are up 44 percent over the past year.)
Those stats don’t account for bar sales, but the facts all point to a boom. I phoned Julia Herz, the craft beer program director at the Brewers Association, for her side. “We are looking to see 20 percent market share, by volume, by 2020, compared to today’s 11 percent by volume,” she says. When I asked her about trying to lower the damn prices, she pointed to a historical scenario that crippled the beer biz. “The $5 six-pack was around in the ‘90s and that standard of beer — no matter what was in the bottle or can — being sold at a certain price, across the board, was absolutely one of the worst things for the beer business,” she replied. “And those price wars were very, very bad to get the six pack down to that level. Bummer, Budweiser Frogs.
So what makes craft beer more expensive? “The simple math of it is that craft brewers are purchasing at smaller scale,” Herz says. “And they’re also often making beer styles that use more hops, more malt, more ingredients.” There is plenty of evidence that as the price of ingredients increase — especially those costly yet integral hops — the beer follows suit.
All of this helps to explain the rise in cost, but what’s my attitude supposed to be? A shrug of inevitability? I went straight to a trusted source of many a high time and hangover for words of wisdom. Garrett Oliver is the Brooklyn Brewery brewmaster, as well as the editor of The Oxford Companion to Beer. He’s a consummate gentleman and possesses the kind of knowledge and confidence that makes you shut up and listen when he’s speaking. Here’s what he told me, when I asked him about my dilemma:
Overall, every study I’ve seen shows that craft beer doesn’t compete with macro-beer so much as it competes with wine and spirits. Now, over the past 10 to 15 years in New York City, rents have probably doubled. However, the price of a pint of craft beer has not doubled. It was maybe $5 around 10 years ago, and it’s $7 now. The price of all the materials and services to make and deliver the beer has much more than doubled. A decent glass of wine rarely costs less than $10, and a real cocktail almost never costs less than $10 to $12. So I, personally, still see craft beer as a relative bargain. In a world of $15 to $20 hamburgers, a $7 pint of Sorachi Ace is a mighty fine thing!
Damn, the Big G.O. droppin’ paradigm-shift knowledge on my cheap ass. It would seem, the $7 beer is here to stay. And it isn’t even, really: Soon it’ll be $8, then $9, then $10. (Expect a New York Times Sunday Styles piece when that comes around in a few years.) It makes sense the more I think about it, too, because for the relative few who might jump on the wagon or switch to Natty Light, a whole crop of high-school and college kids are champing at the bit to get their hands on a Sierra Nevada or Firestone Walker.
To boot, these are children growing up with dads who have fridges stocked with Fat Tire instead of Miller Lite. I grew up in Colorado — arguably the epicenter of the craft beer movement (get bent, Portland) — and, while my parents definitely preferred wine, I still remember my grandfather drinking Coors Light after he mowed the lawn. Craft beers weren’t really a part of my day-to-day. Children now will see their presence as the rule rather than an exception.
What will I, personally, do about these higher prices? Years ago at a restaurant, my father — a wine critic — taught me how he goes about ordering a bottle. He would peruse the sections until he zeroed on what was the best bang for the buck. Sometimes that meant a $15 bottle of Vinho Verde, other times a $90 Bordeaux. He isn’t much into sports; I could see this was his way of winning a contest. He calls it the Terminator Treatment, after Arnold’s computerized, grid-style locking onto targets. I’ve employed the Terminator Treatment, here and there, for a few years. As beer prices rise, I’ll be pulling its trigger more and more. The best beer for the best price: What could be more American than that?
Photos via Brooklyn Brewery, Getty Images