Sunday, April 3, 2011

Great Discussion at NERAX!

The folks at NERAX asked me to come speak to their industry session last Friday afternoon. I'd never been to the New England Real Ale eXposition, and it was a chance to see Thomas (and they offered to throw me a room), so I jumped on it.

NERAX is a 15 year thing, a unique event that takes place in a VFW hall about the size of two double-bay garages. It's determinedly low-tech (as befits a cask festival), but the beer's tremendous -- they pour about 90 British and American cask beers (and a few ciders), all in beautiful condition -- and the food is barbecue sammiches from Redbones. You pay to get in, and you pay for your beer, but you can get 1/4, 1/2 or full imperial pints; your choice. Awesome. You know how good it is? Paul Pendyck from the Bulls Head in Lititz was there Friday afternoon...and he had his own cask event the next day back home. He flew up and back on Friday because he wasn't going to miss NERAX.

Deep Ellum's Max Toste and Chris "The Notch" Lohring at NERAX
Naturally I said I'd speak on session beer, and how cask is a natural expression for it. After getting in Thursday (and not making it to that night's NERAX session because I, well, got to drinking at Cambridge Brewing and just didn't feel like leaving; more about that at my other blog soon), I got in a bunch of work in my room Friday morning, and headed over to Davis Square to make the 1:00 opening. What a prime crew! Tons of New England brewers (I'd already run into Paul Davis at my hotel), and the NERAX folks (very friendly), Paul Pendyck (we ran out for lunch at a nearby diner), Chris Lohring (The Notch), my colleague Andy Crouch, and the BeerAdvocate Brothers, Jason and Todd Alström.

And all those casks. I chatted politely for as long as I could stand it, then excused myself to get a beer. I had -- that I can recall -- Portsmouth Whipper Snapper, Wachusett Black Shack Porter, Brains SA, Breconshire Cribyn, Meantime Yakima Red, Bray's Old Church Pale, and Gritty's Blue Porter...I think that was it. Half-pints, over three hours, and most under 4.5%. All very nice, though the Whipper Snapper and the Blue Porter stick out. I got a few in, filled up with the Yakima Red, and hung out in the foyer as I was introduced. Chris Lohring was there, and I asked him if he was available for tagging when I got into the cage match with the Alströms: he said he'd be on the turnbuckle waiting -- then grinned and noted that it was the first time he'd said the word "turnbuckle" in years.

The idea was to do what the Session Beer Project is all about: stimulate discussion. I got up there, talked about what session beer was and wasn't, and why I set my ABV number at 4.5% -- and why I was reluctant to set a limit -- and what session beer was and wasn't in the U.S., and how I'd be happy with another, better name for it, and ways to make session beer interesting (cask being a big one, of course)...and it was all stuff they pretty much knew, although the parts about how well session-strength beers are selling around Philly seemed to make them pretty happy.

Then things went off: I brought up the price issue. In a nutshell: session-strength beers cost less to make than "normal" strength craft beers -- say, 6% ABV beers -- but only a little: every cost is the same except for a small amount of materials costs, and maybe shorter aging time. The brewers nodded in agreement when I asked them if it was fair to say it was about a nickel a pint less, or about six bucks a half-keg. Now, you're talking about a keg of craft beer that's up in the neighborhood of $130 to $170, retail, less than that to the bar...six bucks cheaper? Even if it's ten bucks cheaper: the bar's going to charge the same for both beers, because "pint" prices generally increase in 50 cent increments...if you're lucky, and they don't jump by a buck. I'm running that, and the brewers are all nodding.

But the punters and the pundits weren't buying it. Andy and The Brothers were saying that it should be less anyway. (One brewer texted me later: funny how after all the brewers said the beers don't really cost less to make, the drinkers all said they should cost less anyway.) (Or maybe not: see the comments below, and my apologies to Andy: it was a bit fevered and multi-threaded!) Why, I asked, what are you getting less of if it's a good, flavorful session beer? Alcohol? In which case...why are you drinking, again?

The English folks in attendance (and those who have experience with English beer prices) know that the alcohol level has a clear link to increased price: that's how their taxes are set. But that's not the case in the U.S., and it's not even the case in mainstream beer pricing: Bud Select 55 is 2.4% ABV, and it sells for the same price at the bar as Miller Lite -- 4.2%.

Every time the discussion would flag, I'd toss something in. "How much do you pay for Taras Boulba?", the session-strength Belgian beauty from De La Senne, that goes for around $10. And they were off again.

Some interesting points did come up. I suggested that bars should charge a premium for cask, which upset some: it's hard enough to sell already, was the general tenor, don't make it harder (to which I'd reply, you have to give the publican something for all the extra work!). Andy made a good point: if you're charging "normal" prices for a beer you can and want to drink more of over a longer time, well, that adds up fast.

And both he and the Alströms were citing high prices in the area already; they wanted relief. I felt their pain: I'm still wincing about paying $10 for a pint of Cain's bitter at Dandelion last month. But that made me think of something smart people say about the "underage drinking problem," both here and elsewhere in the world: we don't have an underage drinking problem, we have a drinking problem. You don't have a session beer pricing problem; you have a beer pricing problem. Which is what they've been saying for quite a while; the session beer cost issue is, like I said, just a hope for some kind of relief.

I don't see that coming, and it's got nothing to do with session beer. When demand continues to be high -- and everyone knows that craft beer sales are still up, and growing -- and price increases seem to have no effect on it, let alone any effect from the worst economy in 70 years...I don't see anyone dropping prices. And piss you off or not, higher prices reassure the craft novice that this stuff really is good. After all, like I said: you don't think a case of Corona costs $28 because of cost of materials, do you? Price is part of the marketing equation, and it works. It's not lucky for those of us who already know the stuff is good, but there you are.

As Chris Lohring tweeted later that evening: "After a heated debate @ on price, taste and ABV, selling the hell out of Notch at 8.99 a six pack at an in-store tasting." The people have spoken. For the record, I was drinking the new Notch Pilsner at Deep Ellum the day before. And it was delicious.

It was a great afternoon, and a great talk. Afterwards I went to The Burren with Andy, The Brothers, Dann and Martha Paquette, Jaime Schier from Harpoon, Max Toste, and some other people (whose names I've clearly forgotten, and I apologize), and we all had some superlative Guinness. We talked some more trash, but mostly just talked. I think the Goose Island thing came up, and the Bourdain/Brew Masters thing, but mostly? Just breezin'. Perfect session stuff.

11 comments:

  1. Coming from the consumer perspective I find this topic fascinating. I LOVE craft beer - all different types (session beers, extreme beers, goldens to deep rich porters and stouts). Although I've always wanted to give it a go I've never tried home brewing, so I've no idea as to what costs what.

    As it relates to price I am of the opinion that if it costs more to brew it (for whatever reason) the price should reflect that. If I don't like it I won't drink it. There's a wrinkle though. Chris from Notch summed it up best. Paraphrasing, he said it's all about choices and what works best for the situation. A great tasting session ale enjoyed at a cookout in 90 degree weather has the same amount of value (to me) as a 10% oak aged stout out at the fire pit in the middle of winter. It's all about value and perception. Do I think I should pay a little more for the oak aged stout? Yes, but, I don't expect to pay Natty Lite prices for an awesome Session ale.

    Love to hear more on this topic. Thanks.

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  2. Very well put, donniemac. As an importer I know used to say when asked why his beers cost "so much," "How much is a beer experience worth?"

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  3. Since my post I've re-read the article (twice) and it got me thinking. If the same amount of work, effort, creativity AND cost goes into making the beer, why shouldn't the prices be close if not even? Notch Session Pils, Pretty Things Jack D'or and Anchor Summer ale will dominate my fridge this summer (along with a few others - hello High & Mighty) just as Founders Backwoods Bastard and Goose Island Bourbon County did this past winter. I've come away from this blog knowing that nailing the right price point is not an exact science. Glad I don't have to do it. Thanks again.

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  4. Lew, Thanks for the recap. What a blistering discussion on Friday, well done. Sorry I couldn't join the crowd at the Burren after, I had beer to sell! Chris

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  5. Hey Lew, good to see you as always.

    But that's not quite how I recall the discussion going. Speaking only for myself, my point (perhaps muddled in the crowd noise) was not that session beers should cost less than regular beers, but that the concept of session beer is not likely to succeed in an environment where craft beer remains at a high price point in certain markets. While certain drinkers will inevitably gravitate towards lower ABV beers, I don't believe that 99% of beer drinkers really connect with/care about alcohol levels unless they are unusually high.

    As Colin Valentine of CAMRA and Steve Schmidt of Meantime noted, the average British punter wants to have 5 or 6 beers after work, with frequency, and that's why they care about ABV's. With many craft beers now coming in at $6-10 per pint (regardless of ABV) in some markets, the idea of session beer is an anachronism. While I enjoy the Notch beers, as I told Chris Lohring, the idea of trying to sell session to the general consumer (even the craft consumer) seems like a pretty big waste of time. The consumers want to buy Chris's beers because they want a pils or an ale, like the name, or think the packaging is clean and interesting. Most are not buying it because it is low ABV and many might very well be turned off by that. The reason: we don't live in a culture where people, night after night, go out with the intention of consuming a half-dozen pints. The world of craft beer is now a one or two and done. We Americans, I am afraid, are not sessioners.

    And that was the point I was trying to make.

    Cheers,

    Andy

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  6. There were a LOT of threads going on, Andy; sorry if I missed what you were saying.
    That said...we Americans didn't used to drink anything other than light lagers, and we didn't drink cask ale, and we didn't do a lot of things. But you know...I remember going out and drinking five and six beers a night, two or three nights a week, when I was in my 20s. Beer was a buck, sure, but I was also making about $17K a year.

    Are you saying the idea of selling "session beer" is a non-starter, or the idea of selling beers that happen to be of session strength is a non-starter? Two different concepts, and as I pointed out last Friday, it's certainly working well for the brewers here in Philly. Actually, it seems to be working well for Chris, so far. The world of craft beer might be a "one or two and done" because they knock you on your ass. I'd much rather have three or four. If you could keep them down to $4 for a 12-14 oz. serving, that would help, I'll agree.

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  7. Hey Lew-

    I'm not saying that no one goes out and drinks that much, just that those who do probably don't give a shit about a beer's ABV. And they're also probably not spending $8/pint either. Perhaps it's my legal background, but there remains a significant stigma attached to consuming multiple pints in a bar (almost all of my comments relate to on-premise consumption). Telling a cop you had 4 or 5 beers but it's all good because they were low ABV isn't likely to get you very far, even if you're BAL is technically under the legal limit. That stigma is strong and casts a shadow on the long-term viability of session IMO.

    I think that session beer is a non-starter in the sense in which it is usually offered, namely that you can have many of them in a sitting. As I noted, people generally don't do that with craft (at least not out in a bar). I think that session, sort of like extreme or barrel aged, is going to be a great marketing gimmick/trick for a handful of breweries. And Notch is certainly well-positioned to ride that current wave and gain some much needed free press because of it. But as Chris largely acknowledged to me the other day, most of his consumers won't have any idea what the ABV/ethos of his brand is. They like it for all of the other reasons that folks buy craft. Now markets may certainly differ but that's my view from Boston.

    Due to price in Boston, I generally have 2 beers when we're out and then switch up to an often less expensive cocktail (rye does the trick at my haunts). With that said, I'd gladly drink several more if the price points were better and I'm very much in the pro-session mindset and consumer frame.

    I think craft is one or two and done not because of the size of the beers (frankly, most widely available crafts are pretty tame in terms of flavor and strength, relatively speaking) but largely due to price. Regardless of how much session beers cost to make versus other crafts, people in bars seem to be drinking a pint or two less a night (I know I am) due to price sensitivity not ABV. Pricing a session, as I've noted, becomes pretty expensive pretty quickly, which in my mind strongly counsels against the types of drinking sessions that make a session beer a meaningful option. If I'm going to have two or even three beers over a two hour dinner because that's what I can afford, the ABV frankly doesn't matter to me.

    Best,

    Andy

    P.S. You've got to get some sort of code to notify folks of follow-up comments...

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  8. Andy, you think the consumer doesn't care about ABV, because you haven't spent the time to ask them in any reasonable context. The only way to test something is to try and sell it. Opinions are cheap, consumers talk with their wallet.

    As far as I know, I am the only person in the craft beer industry selling and educating craft beer consumers on session beer every single day - or low ABV flavorful beer if that helps the discussion - and have been now for over a year. So I have a bit of empirical evidence on my side that session beer is viable, and I would not have launched a company based on a whim and a hope. I tested the idea, and the consumer and bar owner said yes, please, more.

    What consumers are responding to is not the idea of a session - drinking 5 or 6 pints every night of low ABV beer - but the concept of drinking one and maintaining sobriety, or having 3 and walking a straight line out the door of their pub. So, even though they may not be "sessioning" a six pack, when the consumer discovers the historical context of where the "session" name came from, they like it. It's our nature as consumers, we like stories, and the session story is a good one.

    And the session beer concept is a pretty simple one to grasp - low ABV, great flavor. Stand with me at a tasting and watch how consumers have an epiphany when they taste flavorful beer at a modest ABV. They begin to realize that the story they have been fed, that quality and flavor must be wrapped around high ABV, is a myth. Maybe that is threatening to some who want to protect their extremely high margins.

    And options, I'll say it till I'm blue in the face. Give the craft beer consumer more ABV options, and we may grow this category to levels we never imagined.

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  9. For me, my limiting of pints is totally based on ABV. A buck or two more per pint won't kill me in the pocketbook, but I'm lucky if I get out to the pub once or twice a month. I mostly consume at my house or a friend/relative's. I can see how folks considered regulars could rack up an impressive bar bill. Regardless of venue (the pub, my house, etc) if it is higher abv I drink less, period. The occasions I want to drink more it HAS to be lower abv and I have to enjoy it. BMC just plain old doesn't do it for me. Notch Session Ale/Pils, 21st Amendment Bitter American, Otter Creek Solstice does. So I'm going to seek out that beer.

    I think Andy has a good point when he says "frankly, most widely available crafts are pretty tame in terms of flavor and strength." Although I'd substitute most with many, I largely agree. But we live in a time where things need to be in a category (right or wrong, agree or disagree) and categorizing lower ABV beers as session makes good sense. There is a difference between a 4% abv beer and a 7% one. I wouldn't call the 7% an extreme, imperial, double, etc. Those would be typical craft beers.

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  10. Lew,
    My name is Rob Griffin, brewer for Gritty McDuff's in downtown Portland, Maine. Just wanted to thank you for the thumbs up on the Blue Porter I sent down to Nerax this year. This was the first recipe I had come up with on my own since I started brewing to actually pay my bills, it's quite an honor considering all of the great beer that was there that weekend. Thanks again and keep up the good work.

    Cheers,
    Rob Griffin

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  11. I'm late to the game, but this is such a good discussion that I feel obligated to cheapen it. I spent two years trying to open a brewpub, and my plan was to always have a couple of session beers on tap and sell pints of them for a buck less than my standard-strength beers. I agree that the cost savings on ingredients would have been a pittance, but I wanted give people an extra incentive to change their habits. Habits may eventually change regardless of price, but I figured - as a guy who would surely spend a lot of time drinking at his own bar - that I could reap the rewards of a thriving session beer culture much sooner if I loosely based my price on alcohol content.

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