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Audio of SL-017 Monies for Alcohol — How ABV Impacts Sales

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Duration: 32:17
Listen to this episode of Good Beer Hunting where host, Brian Roth, will take a moment to reflect on the biological and physical effects of alcohol.
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Here’s an odd thing that enthusiasts don’t always focus on when talking about beer, or wine, or spirits, or whichever hard seltzer brand we happen to be enjoying in the moment: they’re vehicles for alcohol. There may be tasting notes scribbled down or spoken aloud, and we may stop to reflect on what we just sipped, but the pure, biological impact isn’t always discussed when we’re quaffing something intoxicating. The moment you take your first sip, that ethanol-infused liquid is altering your body chemistry. This is no surprise. We see the Alcohol By Volume—ABV—listed on the drinks we consume and feel it in our bodies. In the simplest terms, courtesy of Wikipedia: ABV is a “standard measure of how much alcohol (ethanol) is contained in a given volume of an alcoholic beverage (expressed as a volume percent).” In beer, a serving size is 12oz, and it’s easy to find a range of ABVs, from a 4% Gose to a 7% IPA, all the way up to a 12% Imperial Stout or a beer that really pushes the limits, like Dogfish Head Brewery’s 120 Minute IPA, which measures in at 18%. The higher the ABV, the more ethanol, and the stronger the impact each drink has on our brain and motor functions. In casual and on-the-record conversations over the past year, I’ve been chatting with beer industry professionals about ABV and their impressions of its impact on the marketplace, related to sales and to consumer desires. There are all sorts of scenarios to weigh up—maybe you’re at a taproom, or strolling through your grocery store beer aisle. What are you thinking about? The occasion you’re going to have that beer? Who you’re with? What’s the time of day? In one way or another, these considerations will likely make you consider the alcohol content of the beer you’re going to drink. Interestingly, in many of those chats I had with brewers and brewery owners, I kept hearing about an interest in higher-ABV products. But how can that be?
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or breweries like Mike's who do a fair amount of sales and can release is what they choose to put in cans versus what stays on draft. In the taproom, for example, he mentions that double I p a cell quicker than regular I PS, which have a lower A B V and that begs the question. Do customers Seymour value in higher a BB beers enough that this value translates into pricing for someone like Notches Chris Lauren. It's a complicated answer. The value perception of session there that because of 4% beer, um, it was perceived as being less ingredient, that it should be less expensive. And the consumer doesn't really understand, or nor should they want to care about, unless they're a business major scale, and that the more you produce something the lower cost there could be no matter what the alcohol content is, and the and then the alcohol content of beer are the ingredient. Cost of beer is so small relative to all the other overhead that takes place to produce the glass of beer, whether it be distribution chain wholesale partner mark ups, retail mark ups, you know, just the overhead. Um in fixed, expensive running a brewery. And once you look at the ingredient costs and a pint of beer is small, and so a small reduction in that greedy in cost really doesn't make its way to the 12 pack or or pint at the bar. Yeah, one of the interesting conversations that I've had recently with people in the industry. Brewers owners, uh, to put it in like complete rough terms. This this money's for alcohol's kind of thing. Where it's, you know, people look at the board, they see a price. They see the A B V, and then decisions can be made from there, depending on a variety of things that are going on. And you know what that day or evening holds for them. But ultimately, you know, sussing it out a little bit and looking at specially kind of off from stores and groceries and conveniences and things like that, Um, that the higher a BB beers clearly have done really well. Um, but obviously that's not the case for you eso in regard to I guess kind of that. I guess this this price point this lower a BV, you're talking about it in terms of kind of that overall volume that people can consume. However, um, from kind of like your your business perspective, I'm really curious in the way that you think about, um, trying to, I guess further, pull that out from people that it's not a case where you need to just sit down and have It's not, you know, an 8% I p a. And you could be on your way that this kind of volume thing matters that you can have a couple. Um, but that's still offers this idea that if you're having to half leaders, that's still too large beers that you're consuming. So what is the difference between I'm kind of working my way around to this eventually? What is the difference between kind of this idea that you want to encourage people to maybe have a couple lower A BV options versus one pint of something that's higher? Well, it's also on occasion based opportunity, where I often call our beer the fridge beer. This is kind of gonna answer your question if it doesn't just standing in the right direction. I ah, lot of people by our beer in 12 packs, 12 ounce cans. So 80% of our production is contracting for the reasons I just talked about. If we're going to put our 12 ounce beer and um in a 12 pack and get it on the shelf at $16 on, be competitive and make margin from that, I had to go to another brew that had larger scale in May. And that was very important to me, because I do, I mean, is much a session. Beer is not gonna be cheaper. It can't be more expensive, right? I understand that it has to be competitive and competitive. Fine for me that that works. People find value in competitive against the 6% beard. That's good. So it's an occasion beer. So people by our beer and 12 packs they put a refrigerator, and that consumer will go on by, you know, 16 ounce cans. A single of you know this latest release and we'll go by this coveted beer there and they'll buy this barleywine here and they'll pack everywhere. But that refrigerated. You're not just always in the fridge in the 12 pack, so on a Tuesday they could have one period dinner just one day
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