I felt I focused on the price of the beer too much yesterday when talking with Pete without addressing a couple other points. So I took the time today to finish what I had to say.
When it comes down to it, a few things come to mind when thinking of Mayfield Brewing. The first is that John Aldrete runs a one man shop. I admire this. I think anyone who loves beer and has brewed a batch of beer for themselves has daydreamed about doing this for a living. John isn’t the only one man shop though, and none of these other “little guys” has to resort to the significant markup vs the competition that we see with Mayfield. Pints of Moonlight sell for the same price as pints of Sierra Nevada.
Where Mayfield is facing difficulties is mastering those economies of scale that the little guy has to be especially in tune with. As I mentioned yesterday, Mayfield beers are waxed, capped and corked. It looks impressive, but to be honest, I almost tossed the Alt when the wax wouldn’t strip, the bottle cap ripped the lip off the bottle and the corkscrew couldn’t find a hard edge to pull against. Ah, the persistence gained from alcohol in the Boonville rain. My point is, a cork and cage looks nice and accomplishes the same thing.
Second thing that comes to mind is the mindset. Talking to John I got the impression that Mayfield is a beer for wine drinkers, not a wine-influenced beer for beer drinkers. I think this sells the product a little short. The craft beer market is one that brings bottles of beer to fine dining occasions. We spend money, sometimes too much, on individual bottles of beer, especially if it’s for the right pairing or event. Knowing the beer market will only strengthen the brand as we’ll stick around. Selling beer to wine drinkers will work for a while until you’ve turned them into beer drinkers and they begin to learn about the other barrel-aged, wine-like beers on the market. I know, I’m back at the price point, but if you’re introduced to something at $43 a bottle, even if you are a big fan, how long will you keep buying t when you’ve found similar products at as little as 1/4 the price.
Finally, I think of small batch brewing. I love small batches. I usually buy into whatever line the brewer sells me when one of my favorite breweries issues a small batch bottle. There’s the rub though, I have to like the brewery before going out and getting excited about their small batch releases. Pete asked what difference does it make whether I try the beers before the barrel, and that’s the difference. Let’s be honest folks, Vinnie Cilurzo and Matt Brynidlson could pee in barrels, let it ferment for a year, bottle it and we’d probably buy it (Russian River Urination?). The reason we’re so blindly loyal to those small batch releases is because the breweries have shown us that they can brew “just a beer” as well as the big ticket item.
I realize I seem to be criticizing Mayfield endlessly. I don’t mean to do that. I did like the Nocturna Imperial Stout and thought it was an interesting and complex beer that deserved to be passed around and shared with friends. I just want to see Mayfield (and all brewers for that matter) succeed, and I see a serious flaw in the plan, and that’s a $43 bottle. There has to be a way to bring the cost down. Given the situation in which Mayfield operates, I could see paying a little extra when compared to other brewers, but there is a limit to that.
Actually, the $43 dollar price tag may be an advantage to Mayfield.
If you have a limited supply of the product, and there are enough people who will buy all the product at $43 dollars a bottle, you can sell all of it for $30 a bottle and make money, or you can sell it for $43 dollars a bottle and make even more money.
Time will tell if there are enough people who will pay that much.
Derrick, I believe the $13 markup you see at Whole Foods goes directly to Whole Foods and the distributor. I’m pretty sure that Mayfield is selling the beer to them at that $30 wholesale price.
OK, I missed that. I beginning to see your point, that may seem like a large mark-up.
If I buy wine directly from a winery, I usual get a price close to retail. I picked up a couple six-packs from El Toro recently, direct from the brewery that were pretty much what I would have paid at BevMo. Mayfield’s retail price is much higher than his direct price, and actually, I wondering if someone more familiar with how this industry works would say that Mayfield isn’t charging enough for his direct sales. (100% mark-ups are pretty common in various industries, I wouldn’t be surprised if Whole Foods is paying something like $20 a bottle.)
I don’t see a $40 bottle of beer being wildly successful with so many great ones at $5-$10, but since it isn’t hard to find beers or wines comparable to those at 1/4 the price, Mayfield probably isn’t going to go bankrupt, either.
Derrick, direct sales from pubs won’t reflect wholesale prices. An example is Russian River’s pub prices. They actually tend to be higher but around the general price as local retailers. Why? Well, why not? if you’re accounting for a 35% markup by retailers, then it only makes sense that you’d want to see those sales in your regster fr the people who come in to the pub. Why give away that extra money?
Many breweries sell “off the dock” meaning you can get better prices, closer to wholesale (but not quite) when you buy a keg at brewery.
I was origionally posting this response on the other thread but it may be more appropriate here:
Saying that you would pay $30 from the brewer but not $43 from the retailer is pretty lame in my opinion but it also shows that Mayfield doesn’t have a grasp on how to market or sell their beer properly. If people are willing to pay $43 at Whole Foods than Mayfield is missing out on $13 that they could be getting at their door. He should sell his beer at his place for the same price it will retail for after all the distributors and retailer markups. He should take a lesson from his brewing bretheren. Russian River, Lost Abbey, Alagash, etc do not discount their beer at their breweries, they sell it for what it will retail for down the street.
Is beer worth $30 a bottle, $43 a bottle or in the case of Sam Adams Utopias, $140 a bottle. In some cases yes, in some cases no. The same goes for wines and spirits pricing. I personally believe that some beers can and do demand such ‘high’ pricing because of their rarity. A brewer can only get about 275 bottles of 75 cl beer out of a 55 gallon barrel. True barrel aged are not mass produced. These guys aren’t getting rich off of making and selling barrel aged beers but are simply showing their artistry in brewing by trying to do something unique.