The problem with online beer sales
Chicago Beer Society (CBS) member Win Schaeffer recently posted the following message to the CBS email list:
Amazon Wine in operation – Can Amazon Beer be close behind?
Here is Steve’s perhaps somewhat lengthy response, which was discussed on episode 147:
While Amazon may well choose to sell beer too at some point, it will be problematic for the same reason that all online beer sales are: beer’s cost to weight ratio is too low, because after all, beer is mostly water.
As has been discussed on this list previously, bombers are typically a lousy value on an ounce for ounce basis compared to 12 ounce bottles, even when the exact same beer is in the bottle (Lagunitas – Little Sumpin’ Wild, Goose Island – Bourbon County Stout 2009 are two examples that jump to mind). This is odd, considering the normal model in food is larger package = less cost per unit weight, but that’s a tangential topic. Don’t get me wrong, some large bottle format beers are worth every penny, but these tend to be unusual beers with costly processes involved in their creation (read barrel aged beers and sours). If you’re paying $10 for a large bottle of standard IPA or stout, you’re almost certainly not getting a good value.
This is the core of the Amazon (and online sales of beer generally) Beer problem: the beers that would be worth ordering online will almost certainly not be available there. Beers that command a high enough price point to be worth shipping to an individual (BA and sour) are already in short supply, and there’s no reason for a brewery to give Amazon a cut of the profits on such beers, when they can keep them all for themselves, or share them with their wholesaler and retailer partners, who move the bread and butter beers for them.
Perhaps as breweries ramp up their capacity to make more and more of these high value added beers that can reasonably demand high price points, this dynamic will change. Until then, any Amazon Beer type service will be necessarily tilted towards heavily overpriced large format bottles of beer, and won’t be particularly compelling to the savvy craft beer consumer.
Steve Mastny
Program Director and Co-host of BeerDownload
P.S. It occurs to me that some new commercial brewers reading this post might take exception to my characterization of large format bottles that are not barrel aged or sour as overpriced. It may well be that to pay for the capital costs of starting a new brewery, selling large format bottles that for whatever reason command a higher price point is the only practical strategy. This is fine, I’m just not sure this is a sustainable strategy in the long term, when there are many other better established breweries out there making beer that is every bit as good and selling it for substantially cheaper. Time will tell I suppose.
Episode 147 – Sam Adams – Chocolate Bock vs Russian River – Blind Pig
Coverage of the Festival of Wood and Barrel Aged Beers (fobab). John Hall steps down from Goose Island. Strange Brew mess. Future of Marijuana beer? Beer sales on Amazon? Alesmith special releases.
Loading ...Episode 146 – Green Flash – Le Freak vs Port Brewing – Wipe Out IPA
Episode 145 – AleSmith Ipa vs Speakeasy Prohibition Ale
Episode 144 – Anchor – Old Forghorn vs Dogfish Head – Punkin Ale
Buffalo Trace coming clean. Springfield Brewpub Obed and Isaacs. Barley Genome project. DDBA vs Sucaba.
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Episode 142 – Two Brothers – Resistance IPA vs Great Divide – Barrel Aged Old Ruffian
Online Beer Retail Innovations Part 3
This is the third part in a 3 part series (Part 1, Part 2) detailing experiences with using new and innovative online beer retailers. Many physical retailers have sold beer via an online presence for years, but only recently has the model been updated and focused directly on online sales, and sometimes without an affiliated retail location.
I was referred to this site by Adam Nason over at BeerPulse. This site is a blend of Netflix and a beer of the month club. Basically you queue up beers you would like to buy and each month they send you a box of 6 (2 of each) of the beers in your queue. (If you have nothing in your queue, will they choose for you? This part is unclear and I did not test.) It is fairly easy to browse their limited selection of mostly California breweries. They were “out” of some things like Russian River stuff, though I am not sure why as that should be plentiful in CA. I am also not sure how they can be “out” of something if they only do shipments once a month?
Setting up your queue of beers is easy enough. The hard part is the waiting. You know what beers will come, but there is no instant gratification as with other online shipping experiences.
In a single simple comparison to bineandvine.com – pricing is somewhat cheaper – $66 total for a case of 6 bottles with CraftBeerConnect, or $90-100 for the same 6 bottles including shipping at BineandVine (pricing is similar if you were able to pickup in person in California at a retail location).
Selection doesn’t seem to change very much, and there aren’t many higher end options. Additionally, you might not appreciate getting 2 of each beer if you like to try a lot of things or end up disliking something.
As for the website itself, you can’t browse within your selected tier, rather you can only browse by brewery or style. There are some additional slight bugs in the website such as adding dealers choice won’t add the proper tier beers and you can’t see what beers were sent to you on in previous months. No order/shipment history is a major flaw.
I ended up cancelling this service after two months (when you do cancel, it completely locks you out of the service – no records, no going back). This service is not worth it for a more experienced craft drinker – but perhaps good for someone looking to easily try new things with little effort. 2 out of 5 stars.
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