Thursday, March 21, 2013

Portland Beer Price Index: Spring 2013

No, no, no!  This isn't how it was supposed to go.

Starting in the middle of 2011, the Portland Beer Price Index (PBPI) looked like it was showing bomber prices decreasing while six-pack prices marched slowly upwards.  Not that I was excited about more expensive six-packs, but I have always considered the bomber price penalty to be a temporary distortion peculiar to the beer industry.  I thought the SPE of bombers would eventually fall below six-pack prices.  I can't think of another consumer liquid where a larger package is more expensive per ounce than a bundle of little packages.  It's not true of soda pop, wine, liquor, bottled water, shampoo, ... you name it.

But the trend I was hoping to spot didn't continue, and now we have bomber prices -- shown in the chart -- higher than ever before, while six-pack prices fell even more than they did last time.  And not just the sale prices, but the "official" prices.  Here are the Portland Beer Price Index numbers for this quarter:
  • 6-packs: $9.16, down 7 cents
  • 22-ounce bombers: $4.88, up 4 cents
  • 6-packs (sale price): $8.61, down 15 cents
  • 22-ounce bombers (sale price): $4.71, up 5 cents
  • 16 oz. draft: $4.47 up 3 cents
  • 16 oz. draft (happy hour): $3.59, down 2 cents
What is happening here?  I think there is some healthy competition in six-packs, as breweries like 10 Barrel and Oakshire move into that area.  Ninkasi must have their six-pack pipeline flowing steadily enough that they have been able to lower their prices, and I think Caldera and Terminal Gravity are feeling price pressure since it's hard to justify the high prices they've enjoyed for a few years when the newcomers have something more interesting at a lower price.

For some reason, the bombers in the PBPI aren't feeling that heat, and Laurelwood has raised the price on their bombers by 10% this time, though most retailers have a sale price on them for now to cushion the blow.  However, there might be a bias in the bombers I've selected, because I've seen some new sale prices on other bombers that I've long considered either slightly or wildly overpriced.

Logistically, I'm starting to be troubled by HUB IPA bombers.  New Seasons appears to have dumped them in favor of HUB tallboys, and QFC has a space on the shelf for them, but no bottles and an obviously incorrect price tag ($6.30).  For this month's numbers I subbed in other HUB bombers those stores were carrying (DOA at QFC, Secession at New Seasons).  The HUB tallboys are a great innovation, especially if they can get the price closer to Ninkasi's SPE, but I may need to find a replacement for the bombers in the index (come to think of it, Gigantic IPA would make a reasonable and somewhat poetic replacement).

If you require more information on the makeup of the PBPI, read the page which describes the composition of the index.


  1. Oddly enough, I was just thinking yesterday how nice it is that most of the Oakshire and many of the Ninkasi bombers I was perusing at Freds were under $4. Still higher than a sixer, but not quite the sticker shock of paying over $5.

  2. Yeah, Oakshire bombers seem cheap at some places, and I've seen Burnside Sweet Heat for $4 or less at a couple places. I saw a few cheap Rogue bombers, and the price of Leafer Madness keeps dropping.

    So like I said, it might be my bomber selection is resisting price pressure better than the field at large.

  3. My theory is this: Oregon has long had a disproportionately high number of brewpubs. That left store shelves open to weirdly less competition than in other states. But with the rise of the bomber and Green Bottling-like opportunities, everyone and his dog has begun to offer beer in 22s.

    I suspect we'll see a fall as that surfeit is addressed by buyer preference and then breweries have to compete via price. But so far it's buoyed by novelty.

  4. Ninkasi took a small price decrease in price on their promotional price for 2013 and bumped up expected promotional months from 6 to 7 for 2013. They left bomber pricing as it was in 2012, and reduced promotional pricing frequency. At promotional price levels Ninkasi sells to the retailer for about 9.2 cents per ounce while 22's sell for 11.5 cents per ounce. Drives me nuts. I never have gotten a good reason for why the upcharge 22's other than "we charge what the market will accept"

  5. Thanks, priceit, I appreciate your insider perspective. Now that more breweries are doing six-packs, we can look at more apples-to-apples comparisons between the two formats.


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