Price as substitute for quality in unfamiliar territory

“In the absence of information, people tend to take a price of the unfamiliar product as a signal of its quality, so high prices do not diminish the quantity demanded very much. When information is provided, the signalling content of the price diminishes. As a result, demand becomes more elastic. In particular, informed consumers see no reason to pay more for the new product given that it has the same ingredients as the familiar one. The effect of the information is thus to encourage more people to switch from the substitute product to the target one at low prices, and vice versa at high prices.”

That’s an extract from an academic paper (PDF) on the behaviour of purchasers of medical products in Zambia, but you’ll encounter versions of this argument everywhere from self-help books on how to sell! sell! sell! to articles in the business press.

The conclusion often drawn is that, perhaps counter-intuitively, if you price your product higher than the competition, many consumers will assume yours is better and worth the extra money.

Conversely, if your product is too cheap, it might seem suspicious: “Hmm. What’s wrong with it?”

Does all of this also apply to beer?

Twenty years ago, we were certainly aware of the aura that surrounded Premium Lager, and Pete Brown has written memorably about the damage Stella Artois did to its brand by reducing the price.

But drinkers these days have lots more information to go on, from beer style to ABV, from hop varieties to brewing location. All or any of these might override price in the decision making process.

And, of course the actual relationship between price and quality in beer is complex: there are lots of bad expensive pints out there, and some really good ones that are relatively cheap.

Our suspicion is that price might be a proxy for quality in situations where none of the brands are familiar, and the only other information is price; or (as this paper suggests) where the choice is between broadly similar products under the same brand name: Carlsberg, or Carslberg Export?

With all this in mind we find ourselves once again thinking about the Drapers Arms, where not only is branding held at arm’s length but also the price structure is flat. As a result, we’ve probably tried a greater variety of beer there than anywhere else, even allowing for the fact this is where we do most of our drinking by default.

Cash or Cashless, the Problem is ‘Only’

Both cash-only and cashless-only are barriers, and both tend to be driven by the needs of the business rather than what works for customers.

We got talking about this in the pub last night because of a poll from the Beer O’Clock Show:

The arguments against card-only have been piling up for some time:

  • it excludes the poorest in society
  • it discriminates against older consumers
  • it plays into the machinations of global tech giants
  • it contributes to the tracking and influencing of our behaviour.

But on the ground, in daily life, we very much understand the appeal of paying by card in pubs, bars and bottle-shops.

It saves us having to wander round suburbs or industrial estates looking for cash machines, and makes it easier for us to manage our various bank accounts and budgets, with every transaction recorded and reported.

And not taking cards can be excluding in its own way. One publican in a cash-only business recently told us they’d been thinking about getting a card machine purely because they were aware of constantly turning away young people who expected to be able to use cards. About half of them were willing to find a cash machine and come back, but the rest just moved on down the road.

A lot is made of the cost of processing card payments but depending on the size of the business, cash can be just as expensive to handle, and certainly less convenient.  It can require extra staff-hours for counting and banking, and needs transporting, either at considerable cost (secure pickup) or risk, with a member of staff walking to the bank with a sack of readies. (I’ve managed cash-heavy concerns and write from experience. – Jess.)

The presence of cash can also make premises more vulnerable to crime or, rather, advertising total cashlessness can be a good way to deter it.

And some of the objections cash-only businesses have to cards seem to use to be a hangover from a decade ago when banks charged a lot more for the service, and when people who paid by card in the pub were amateurs and freaks.

It used to mean five minutes of faffing around with signatures and pin numbers, holding up the line. Sometimes, there’d also be another minute or two of trying to get up to the limit for paying by card without an additional charge – “What are your most expensive crisps?” Nowadays, it’s a quick one-handed tap and done, and its people fiddling with coins and waiting for change who seem to cause a delay.

Fundamentally, though, we bridle at the idea of businesses doing only one, or only the other, because it’s convenient for them, rather than offering both with the convenience of their customers in mind.

PUB LIFE: Generally by the Half

Keg taps.

A sad-eyed veteran of perhaps 28 shows a newbie, baby-faced and keen to please, around behind the bar.

The Vet points to the keg taps.

“Now, these stronger ones we generally only serve by the half.”

“So I should never serve them by the pint?”

“Well, not never. Generally.”

The Vet leans on the bar and gives a Han Solo smirk.

“As long as they’re not rat-arsed, and not acting the arsehole, you can serve them pints. Obviously, if they’re absolutely arseholed, don’t serve them anything.”

“Cool, cool, yeah, yeah, yeah.”

“But if they do insist on a pint, warn them about the price before you pull it, because if they weren’t acting like arseholes before, the might start when you tell ’em it’s eight quid a pint.”

FNG’s eyes pop.

“Eight quid?”

“Well, like I say, we do generally serve it by the half.”

News, Nuggets & Longreads 29 September 2018: Runcorn, Rochefort, Rules of the Tavern

Here’s all the reading about beer and pubs that grabbed us in the past week, from PR disasters to art installations.

Last year Kirst Walker wrote up a pub crawl of Runcorn’s Victorian pubs with her trademark spark; this year, she notes plenty of changes, giving the exercise a certain academic interest as well as pure entertainment value:

Time for the Lion, where everybody knows your name! Last year’s winner was where we we would end the night once more. I didn’t double up last time but as we’d already had time bonuses, sambucca, and sandwiches I threw caution to the wind. Alan bought a round of pies like a freaking billionaire and we had a group de-brief with plans to repeat the operation next year on the same weekend… The Lion has lost much of its original room layout since it was refurbished and part of it converted into houses, but it’s still the type of traditional corner pub which is a hub for the community, and in my opinion it as better to try and save the pub than keep the entire sprawling space.


Price list in a pub.

We tend to ignore clickbaity brouhahas over individual expensive pints these days but Martin Steward at Pursuit of Abbeyness has waited for the dust to settle before reflecting on one such recent incident, producing a slow-cooked opinion rather than a flash-fried ‘hot take’:

The most remarkable thing about the price of Alesmith Speedway Stout Hawaiian is not that it is five-times higher than the price of Rochefort 10, but that it is three-times higher than Alesmith’s ordinary Speedway Stout… That premium buys you some toasted coconut flakes, some vanilla and some rare Hawaiian Ka’u coffee beans, which are indeed three-times more expensive than your bog-standard joe… If you can taste the difference after those beans have had beer fermenting on them, I complement you on your sensitive palate. If you think it justifies a 200% premium, I have a bridge to sell you.

Continue reading “News, Nuggets & Longreads 29 September 2018: Runcorn, Rochefort, Rules of the Tavern”

News, Nuggets & Longreads for 11 August 2018: Price, Parenting, Popstars

Here’s all the beer and pub related news, opinion and history that’s grabbed us in the past week, from kids in pubs to Never Gonna Give You Up.

First, money. As part of the publicity around its Great British Beer Festival (last day today) the Campaign for Real Ale published the results of a survey suggesting that the majority of British drinkers who expressed an opinion find the price of a pint of beer unaffordable.

Cash Money Pound Signs.

There were various bits of interesting commentary around this, from musings on the question of value from Katie Taylor

Affordability is quite an abstract concept, isn’t it? In my experience as someone who’s lived in extreme poverty and in relative comfort and all the incremental stages of debt, exhaustion and erratic spending in-between, things like pints come down to how much you value them. They’re not essential – unless you have an addiction – and yet as part of our culture they’re a central point of our social lives.

…to Richard Coldwell’s reflections on the difference between affordability and priorities:

I think there are many who are making the choice between going out for a pint and other things… Simple choices like; Sunday afternoon at the local pub with the family or a full day out at the beach with sandwiches and maybe an ice cream and a few bob on the amusements. I reckon it’s about 50 miles from our house to Scarbro’, so the biggest cost of the day is fuel… Round here, the price of the first round of say, a pint, glass of prosecco, three soft drinks and a few snacks would just about cover the fuel costs of a return journey to the seaside. The second round would more than pay for the picnic and sundries and we’ve only been in the pub for about an hour, max.

Jonny Garrett, meanwhile, is unimpressed with this focus on price which he regards as ultimately damaging to the image of cask ale:

Perhaps the greatest step CAMRA could take toward restoring growth in cask beer would be to invest in training and equipment for pubs that show loyalty to cask and price it fairly. For some reason, this call for quality brewing falls on deaf ears at CAMRA, who this week lamented how expensive pints have become. The party line of championing cask above all else appears to include the millions of cheap, dull, vinegary pints poured across the UK each year. Some of them even at their own festivals.

Continue reading “News, Nuggets & Longreads for 11 August 2018: Price, Parenting, Popstars”

Perceptions of Value in the Port of Amsterdam

Macro shot of 1p pieces with The Queen's profile.

How much? Seriously — how much?

We don’t often find ourselves saying this kind of thing because, without making a big whoop-de-doo about it, we tend to go to the kind of pubs that suit our budget, with the occasional managed blow-out when we get the urge to drink something exotic.

But Amsterdam really challenged us.

On paper, it might not seem that big a deal: beer from smaller breweries in fairly imprecise measures of 250-300ml seemed to cost between €4-€6, which puts it in the £5-£6 a pint territory that’s increasingly common in higher end UK bars. But it often felt like poor value for money because even the Special Beers didn’t always seem that special. A session of not-bad beers that barely left us abuzz could easily cost €40.

And even if the point, as we’ve sometimes said, is that you’re renting space in a nice pub or bar, then the fact that we didn’t quite warm to most of the establishments we found ourselves in, following guidebooks and advice, rather nullifies it.

Then, just to reinforce that feeling, we spent two nights in Brussels drinking the world’s best (don’t @ us, as the kids say) and, let’s be honest, pokiest beers at €3-€4 per 330ml bottle, in characterful bars and cafes, where beer is treated with reverence but not pretension.

Just to be clear, we’re not pretending to have got the measure of Amsterdam based on a week’s stay; we loved the city as a whole; and will certainly go back.

We just found it interesting to have that reality check: £4.50 for a full pint of truly great cask suddenly doesn’t seem so scary after all.

News, Nuggets & Longreads 3 March 2018: Norway, Nitrogen, Nanas

Here’s all the news and comment that grabbed our attention in the past week, from keg dispense to Rwandan banana beer.

First, Will Hawkes, who you can trust to make a story about keg beer dispense for Imbibe interesting:

Keg beer dispense quality is not often talked about in the UK, at least in contrast to the perpetual hand-wringing that goes on with regard to cask ale. But it deserves to be a very big issue, because a huge number of pubs and bars in the UK are not set up to serve craft keg beer in the best condition…. That’s because most keg dispense equipment in the UK has been designed to suit low-carbonation, sterile-filtered big-name lager brands, which are relatively easy to look after. But modern craft beers come in a bewildering variety and they need individual treatment, be that a higher temperature of serve or a different gas mix.


For Original Gravity Jessica Mason provides a difficult, emotionally intense read about her family and father, ‘the worst man I had ever met in my entire life’, anchored around the pub:

I knew I had mere hours with a man I didn’t know. But with a hundred questions in my head none of which could be answered by someone intent on impressing me, I would need to put my questions aside and make him feel at ease enough to remove his veneer. But how would I do that? Strangely enough, I did know. I needed just two simple props: a pub table and some beer.


Norway in the snow.
SOURCE: Good Beer Hunting

This piece about Norwegian home-brewers by Jonny Garrett for Good Beer Hunting is packed with lovely photographs, interesting incidents and engaging characters:

Reines and I are sharing a quiet moment at the after-party of the town’s homebrew competition and festival, which he organizes. Things are getting a little philosophical because, well, we’ve been drinking since lunchtime. We’ve just spent a half hour kneeling on the floor in front of his new sound system, listening to Nordic heavy metal at a volume I was sure would echo across the fjords and all the way back to my home in England.

Our favourite thing? Fritz the bucket. (Oddly misnamed Franz in the text.)


Edwardian advertisement for Edelweiss beer: top hatted man points at beer with his diamond-topped cane.

Katie at The Snap and the Hiss has further thoughts on the affordability and desirability of craft beer, and the swirling tides of aspiration and marketing that surround it:

I am fully aware and appreciative of the costs involved in creating beer and I am in no doubt that prices are fair (for the most part). I just know that I’m not flush enough. So what am I suggesting here? That breweries should make no-frills beer for us poor people too? That there should be a pay-it-forward scheme involved? No, of course not. I’m just highlighting the fact that keeping up with trends in craft beer is exclusionary in it’s nature and there should be some awareness of this. Not everybody can take part. This doesn’t necessarily mean that the people who can’t or don’t take part are any less enthusiastic about beer than the people collecting new cans like Pokémon cards.


Sighing bar staff.

There’s been a fair bit of news on the sexism-in-beer front this week:

  1. SIBA has announced its intention to move forward with plans for a code of practice for (or rather against) offensive beer marketing.
  2. The Portman Group held a focus group about sexist beer packaging this week as part of reviewing its guidance.
  3. American brewery Stone dropped a bizarre, awful social media clanger with what seemed to be a joke about sexual consent. This story continues to develop.
  4. Jeff Alworth has been running a series of posts on this subject with input from various women in the industry, our favourite of which is the conclusion: ‘What You Can Do’.
  5. Nicci Peet, a Bristol-based photographer specialising in beer-related subjects, has launched a project to document women in the UK beer industry you can find out more and support her work at Patreon.

Beer being poured, from an old advertisement.

Brewers! You will want to get your hands on the new e-book by Andreas KrenmairHistoric German and Austrian Beers for the Home Brewer. He’s undertaken lots of painstaking research to come up with recipes for everything from Dreher-style Vienna lager to Mannheimer Braunbier. We bought a copy and have already found lots to chew on even though we don’t have any immediate plans to brew.


Bananas.

Here’s something a bit different: from the BBC World Service programme Outlook, some audio, on the subject of  Rwandan ‘banana beer’. Christine Murebwayire grew up in a family of banana beer brewers and then, many years later, used it to drag her family out of poverty:

“A lot of people like to drink banana beer but some educated, smart people feel uncomfortable drinking it because it’s not a very sophisticated drink. So I thought, if I could make a smarter drink to drink on social occasions, it will appeal to a bigger market….”

(We think you should be able to listen to this worldwide; apologies if not.)


This week we’ll finish not with a Tweet as usual but with a film trailer: Walk Like a Panther is a real sign of the times — a Full Monty style comedy about a community banding together to save the local pub from closure.

QUICK POST: One Practical Thing

HOW MUCH?

This morning another conversation about the price of craft beer broke out on Twitter, as it does every three months or so.

This time the prompt was an article by Will Hawkes for the Guardian on progressive breweries and inclusiveness:

Women are increasingly taking the responsibility for shaping the beer world. Writer Melissa Cole and brewer Jaega Wise have driven the campaign against using sexualised images of women in beer marketing…. There’s [also] a growing sense that the beer world needs to make it easier for customers to drink its products. Leading the way is Ride Brewing Company in Glasgow, where the taproom is fully accessible to people with disabilities. Head brewer Dave Lannigan says his experiences have influenced this stance. “I am officially disabled through loss of hearing, so have personal experience of being excluded,” he says. “We are just keen to make a difference, no matter how small.”

(Someone did great work on the headline for that story, by the way.)

This prompted food writer Tony Naylor to Tweet the following:

Lots of good initiatives here but if craft beer wants an inclusive working class audience it needs to have a serious conversation about the race to establish the £5 pint as standard. What would you drink if you were skint? Idea: £3 Pint Project. 12 breweries in, say, Greater MCR take turns each month to brew a £3 pint/ get it stocked in loads of good bars/ to see what’s possible stylistically. Now THAT (& even £3 is expensive if you’re skint), would be a positive move.

We think that’s quite an interesting, provocative suggestion and, indeed, made a similar one ourselves in 2012. He’s certainly not saying all beer should be £3 a pint, or that £5 pints should be banned, or are a great evil — just that some deliberate, disruptive gesture on price might shake things up a bit.

But whether it’s a practical suggestion or not it did make us think of something beer enthusiasts and commentators could be doing more often: making the effort to highlight good value beers.

Big, rare, strange craft beers naturally attract a lot of coverage because they’re different and come with some sort of story, but that can add up to a sense that (to borrow CAMRA’s controversial phrase) they are ‘the pinnacle of the brewer’s art’ and that if you’re drinking anything else, you’re slumming it. Why bother? Really, you should sell an organ or two, or skip your lunchtime avocado feast to cover the cost of the upgrade. (Remember, nobody has any money these days.)

So, instead of moaning about expensive pints — or at least as well as doing that — make a point of flagging great ones you’ve found at £3 a pint or £2 a can.

It doesn’t have to be an essay — just a Facebook post, Tweet or passing mention in a post on another topic. But essays are good too. Food critic Jay Rayner has just shared a piece defending his writing about expensive restaurants but one of the best things he’s ever written was about a Polish restaurant in Birmingham with main courses at under a tenner.

Of course nobody should pretend to like beers they don’t, or hold back from writing about expensive beers that really get them excited, but if there’s a readily available, affordable beer you really do enjoy, take a moment to tell the world, without apologies or caveats, and without expecting a medal for your bravery.

Cask Ale is Too Cheap/Expensive

Illustration: Pound Sign/Pint Glass.

Cask ale is both too cheap and too expensive. Or, rather, both of the following statements are true:

  1. It is a problem for brewers that cask beer – culturally important and relatively more difficult to brew, distribute and serve at its best – is expected to be cheaper than other forms of beer on sale in the UK.
  2. Consumers cannot be expected to pay more for cask beer.

Let’s look at item No. 1 first.

We have testimony from multiple brewers that cask ale not only offers only slim profit margins but also comes with additional challenges not found with keg or small-pack products. Take this from Northern Monk, for example:

[Logistically cask is] a massive headache for us… It makes no sense for us to package in a format that we’re not really set up for, has a lower market value than other packaged formats and our beer isn’t particularly suited to.

Or, if you don’t much value the views of ‘upstarts’, here’s Roger Ryman of St Austell: “Overall profit on cask beer is wafer thin in free trade and national distribution where we compete against the many hundreds of breweries that operate in this market”.

So, competition is an issue but we also find ourselves suspecting that if it weren’t for certain oddities in the market – the gravitational pull of the Campaign for Real Ale, a historical expectation that cask will be cheaper than keg – cask would be a premium product costing more than most keg beers. That is sometimes expressed, for the sake of brevity, especially on Twitter, as “Cask is too cheap”, or “Cask ought to be more expensive”, or “I’d be willing to pay more”.

There’s a cheap rhetorical trick that often gets played at this point: “Oh, so you think £3 a pint is too cheap? Alright for you, moneybags.”; “So what you’re saying is that want to exclude poor people from cask altogether then? You elitist bastard.”; “You want to pay more? Are you quite mad?”

(Also a cheap trick: paraphrasing those rather than quoting specific examples, but we don’t want to get into beef with anyone in particular.)

The problem is, those latter voices also have a point, which brings us to item 2.

Nobody Has Any Money

Journalist Will Hawkes put this well on Twitter last week (and, indeed, prompted this entire post):

"People can't pay more. Wages have been in decline for years and will be for years. Brewers need to accept this."

As a consumer it can get pretty exhausting: support pubs, support small breweries, boycott supermarkets, support record shops, support bookshops, support struggling restaurants, support your local butcher, baker, artisanal candlemaker. Buy local, buy Fair Trade, buy British. Oh, and pay into a pension, and save for a rainy day, and put a roof over your head in a property market gone insane, and also we’d like you to go onto a contract which means we can’t guarantee your income from one month to the next. Oh, and it’s 30p to use the toilet now, by the way, because there’s no magic money tree and so on and so forth.

If somehow the price of cask ale rose by, say, 20p a pint across the board, it wouldn’t unlock some secret pot of money that consumers are sitting on. Indeed, it would probably push a significant number over the edge, reducing the number of trips they make to the pub.

“Well, drink less but better,” people sometimes say, but, honestly, if we drank much less we might as well give up and join the Band of Hope, even though going to the pub is our biggest leisure expenditure each month. (If you haven’t already done so try totting up how much you spend in the pub each month – the numbers are a bit scary.)

To us, and others like us, and especially those worse off than us, it doesn’t feel as if cask ale is cheap. The fact that some really cheap beer is available, at Wetherspoon or Sam Smith pubs, doesn’t ‘devalue cask’ – it’s a lifeline, part of the balancing act that means we can occasionally afford to splash on something special at £5 a pint.

So Mr Hawkes is right: brewers and their boosters need to find better ways to tackle this issue than berating or guilt-tripping. Equally, when a brewery makes a commercial decision to pull out of cask, or refuses to budge on price, consumers (and especially real ale campaigners) shouldn’t be turning the guilt-gun back on them: they’re doing what they feel needs to be done to survive in an ever-more competitive market.

News, Nuggets & Longreads 23 September 2017: Pils, Pepys, Pricing

Here’s all the reading about beer and pubs that grabbed us in the last week, from Belgian Pils to China Ale.

Last week we mentioned in passing the launch of Drinkers’ Voice and expressed our instinctive doubts about the whole business. Now the Pub Curmudgeon has attempted to make the case in a passionate post on his blog:

Drinkers’ Voice as a matter of policy does not accept any industry funding, to ensure both the reality and the perception of independence. It speaks for the consumers of alcoholic drinks, not the producers. What it does have is a certain amount of involvement from CAMRA, which has led some to conclude that it is effectively a CAMRA front organisation… In recent years, there have been several motions passed at CAMRA AGMs urging the organisation to take a stronger line against the anti-drink lobby. However, CAMRA by definition does not represent all drinkers, and can all too easily be accused of glossing over the negative effects of alcohol in seeking to promote beer and pubs. There also remains a somewhat delusional tendency within its ranks who believe that the type of drinking that CAMRA supports can in some way be presented as less harmful. So the decision was taken that the objective could be better achieving by helping with the creation of an independent campaigning body.

We’ll keep pondering this and perhaps put our heads above the battlements with an actual blog post on the subject. Or (checks comments from last time we got involved in this kind of debate) maybe not.


Inside Brasseries Atlas.

For his website Brussels Beer City Eoghan Walsh has written about an abandoned brewery in the Belgian capital which reflects the changes and challenges of the past century:

As breweries shut down or moved their production outside of Brussels from the 1960s on, most of their buildings were torn down to make room for an expanding Brussels. The few that survived this destruction were converted into art galleries, performance spaces, or hotels… These are the neighbourhoods – in Anderlecht and Molenbeek – that comprised “le petit Manchester belge”. Keep going past streets with names like Birmingham, Liverpool, Industry. Past the faded signs on crumbling brick buildings advertising “Ford” and “Coke”. Past the old Moulart maltings complex that has been renovated as an interactive centre and a business incubator. And there, just along from the wrought iron rail bridge, is the art deco brewing tower of Grandes Brasseries Atlas.

The post is accompanied by lots of lovely photographs just one of which is reproduced above.

Continue reading “News, Nuggets & Longreads 23 September 2017: Pils, Pepys, Pricing”