I've always been a big fan of Sam Adams beers. Boston Lager is one of the best on the market, and what's so great about them is that you don't lose quality in their more creative flavors (a lot of good beers get weird when they try to branch out). I'm not alone, of course. And because Sam Adams is heavily seasonal in its rotation, anyone that likes them gets excited when a seasonal flavor gets rereleased.
Why am I talking about this?
Because good examples of price discrimination are hard to find and I've always liked the example offered by Sam Adams' seasonal beers.
Airline tickets are the most common example of price discrimination. This works because tickets are sold over time. Business travel is often done with much shorter notice and business travel demand for tickets is more inelastic. Vacationers have less elastic demand but they also plan farther ahead. There is a great price discrimination opportunity here: charge more for the same flight as the flight date approaches.
Price discrimination for Sam Adams (and presumably other seasonal brewers, but this is one I've really noticed) similarly take advantage of sales over time.
When Octoberfest is rereleased there are a lot of enthusiastic buyers ready to shell out $19 for a case. Part of me doesn't blame them - it's a tasty beer. But I can wait. I don't have to get it the first week it's in the stores... plus I've notice something: a week or so later it's $18 for a case. Then a week later its $17 for a case, etc., etc.
Not sure why, but I was more eager this season. It can get down to $13 I noticed for the summer. I grabbed one this morning at $15. Still a lot better than drinking at bars.
Anyway, I for one think the airline ticket example is overused - we need more price discrimination examples!
Saturday, August 25, 2012
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Are you sure this is price discrimination and not the same process of needing to move things off the shelves, i.e. why bathing suits are 75% in september (or whatever)?
ReplyDeleteIt may be but this is a process that unfolds in the first couple weeks (it's the end of August and its already moved several bucks). They keep brewing and shipping for months, so I suspect its a price discrimination thing, but I could be wrong.
DeleteThe price drops at the end of the season are probably more due to this effect.
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DeleteI've never seen another brewery do this. But I assume SA is the only "craft brewer" with the resources to do this.
DeleteActually I guess the bathing suit example is also a kind of price discrimination.
ReplyDeleteYou should try their Hazel Brown--it's in their 'Harvest' variety pack.
ReplyDeleteTheir variety packs are another form of price discrimination (perhaps): if you are the type of drinker who wants to drink the Hazel Brown, or the Belgian Session, or the Dunkelweiss... you're going to have to buy a variety pack (which, thankfully, don't include Sam Adams light). They do this every season. So if you really like the Hazel Brown, you're going to have to buy a bundle of different beers that you may not value as highly.
Of course, alcohol distribution is one of the most absurd byzantine public-private messes around, so the variety pack might just be the constrained efficient way of providing variety.
Where in the DC area are you finding SA for $13 a case?
ReplyDeleteGiant in falls church got that low for the summer varietal I thought, but maybe it was only 14. It was definitely impressive. I don't think the summer packs are as popular as the fall or winter ones, so this may not get much lower than 15 (part of the reason why I just went ahead and got it).
DeleteI believe we might have lower alcohol taxes than DC or Maryland but I may be wrong about that.
Thanks for the tip. I go by there pretty regularly. I think you're right about VA alcohol tax, too. I was just at a MD cidery, and they said MD just raised theirs to 9%.
DeleteJust wondering Daniel, how much experience do you have in tasting/testing different craft and microbrews? While I'd take a Sam Adams before any other macro-brewery, the majority of their attempts at classic styles seem to fall short of something I'd consider high-quality. Could just be me, and my biased Californian self :)
ReplyDelete