Expert: Alan Ward - 2/9/2004

Question
Do you have any idea on the factors beer consumers take into account when buying their beer in North America?  I'm specifically looking for information whether beer drinkers are price sensitive when buying beer.

Answer
Seth,
I must admit that you are a bit outside my area but I do have part of an answer.

In fact if I could give you a definitive answer I would be rich.

I can tell you the story of Shiner Bock a beer brewed in Shiner, Texas.  A few years ago you could buy a six pack for $2 to $3.  They where going broke so they hired a consultant to try and find the problem.  After all they had been brewing and selling beer for over 100 years.

The consultant came back after a long study and told them the answer was simple.  Raise their price.  Simply put he said that they where trying to sell to the wrong consumer group.  By raising the price and calling it a premium beer they would appeal to a different type of beer consumer.  To make a long story short that is exactly what they did.  Over night Shine Bock went from $2 to $3 a six pack to $5 to $6 a six pack.  Their sales jumped over night also.  Same beer, same package, same stores.  Just a higher price.

So you could say that North American beer drinkers are price sensitive.  A darker beer sells better as a premium beer while you can sell a pilsner for a cheaper price.  I do believe that North Americans are also experiencing a rebirth in beer drinking.  No longer is it just the construction worker drinking beer.  Now you have Doctors and such drinking beer and exploring beer styles.  That also accounts for the growth in the brew pub and Micro brewery industry.

That may also be a result of the laws changing in 1975 which made it legal to brew beer at home.  Americans began to find that beer came in more than pilsner.  They also found that beer taste different with different styles.  We may have found this earlier if it was not for probation which saw the death of most breweries

I hope this has helped a little.  As I said if I had the answer I would be rich.  If you have more specific info I would be glad to address the question  to specific issues.

Alan