This is the kind of opinionated, less newsy article I share on my Substack, which is something I’m working to grow. It’s a bit different from what I usually do here on the Washington Beer Blog, where people don’t expect me to have opinions.
Who wants pizza?
Certain questions elicit predictable responses. Ask a room full of hungry teenagers, “Who wants pizza?” Ask a room full of voters, “Who wants lower taxes?” Ask a room full of beer drinkers, “Who wants cheaper beer?” It’s a nearly Pavlovian response.
A recent edition of The Craft Beer Brief suggested that craft breweries enjoy a bit of grace when it comes to pricing. Even as prices rise, craft beer consumers understand they pay a premium price for a premium product. Within reason, and in general, I agree with that observation. I am guessing it’s an unpopular opinion. After all, the impulse to raise your hand is strong when someone says, “Who wants cheaper beer?”
Bezos and Beer
Craft beer is like Amazon Prime. Not everyone splurges on it, but some do. Amazon recently increased the cost of its Prime subscription. In doing so, the company knew it would lose some subscribers. No doubt, it was a well-researched and carefully calculated decision. The result? The increased revenue from the price hike outweighs the very small percentage of lost subscribers.
I am not suggesting that craft breweries use the same Bezosian logic when increasing prices. They don’t. The similarity lies in the splurge. Some folks won’t pay for Prime, no matter the price. No one needs Prime, and no one needs craft beer. Nobody drinks craft beer because it is cheaper than other kinds of beer, because it is not. They drink craft beer because they want to. It is a splurge.
That does not mean craft breweries are free to charge whatever exorbitant price they want for a six-pack of IPA. However, it does mean that craft beer consumers understand what they’re paying for: a different product than the less expensive options. Producing a higher-quality product is more expensive. Craft beer is produced by smaller companies that do not enjoy the same economies of scale as the mega breweries. But, again, the hungry teenager’s response is predictable: “Who wants pizza?”
Fat Price, Skinny Margin
With few exceptions, when the retail price rises by 10 percent, it’s because the brewery’s cost has increased by 15 percent. It’s always worked like that. Dating back to when it was called microbrew, craft beer has always faced headwinds because it is the more expensive option. Pricing has always been a concern for craft brewers.
In recent years and months, the cost of operating a brewery and making beer has skyrocketed, much as the cost of operating your household and feeding your family has. Energy costs, ingredient costs, aluminum prices, CO2 prices, basic operational costs, up up up. Craft breweries do not want to raise prices. They must.
There is no price gouging or collusion, as I’ve seen some social media comments assert; actually, it is quite the opposite. This explains why we’ve seen brewery closures increase while prices rise. Craft beer sales have declined in volume but increased in dollar sales. (Read those last two sentences again.) Still, in 2024 and 2025, that increase in dollar sales did not prevent brewery closures from outpacing brewery openings for the first time in, literally, decades.
Even though consumers complain about the rising price of a pint of craft beer, margins are getting thinner and thinner. THAT is what threatens the craft beer industry. Some consumers think the $8 pint of beer is the problem, but it’s really not. It’s what that $8 pint represents. When craft beer prices rise, profit margins drop, and breweries suffer. Our big human brains can recognize and understand this, but, big as they might be, our brains can still override the logic and reason functions when faced with visceral decisions. “Who wants lower taxes?”
Craft Beer’s Kryptonite
I recently spoke with one of the owners of an award-winning, highly respected, well-recognized brewery here in the Pacific Northwest. I asked about what the brewery was working on, what we can expect to see next. The answer didn’t involve the kind of fun, sexy stuff I would have heard a decade ago; instead, it involved process changes and the introduction of new, efficiency-increasing equipment. Yawn. The kind of unsexy initiatives that help a brewery survive on that knife’s edge we call shrinking margins.
That brewery owner is not alone. Increasing efficiency, improving business processes, and reducing costs are effective ways to address the challenges all craft breweries face today. As they turn more attention to those less-creative concerns, let’s hope they continue to focus on innovation, artistry, and whimsy. After all, creativity is one of craft beer’s superpowers.
It’s probably not what a lot of craft beer consumers want to hear as they cry into their increasingly expensive beer: your favorite local craft brewery faces a laundry list of existential threats right now, but your consternation about the higher price of a pint is pretty low on the list. That increased price is a matter of survival, not choice. Do you want your favorite local brewery to fail and go out of business? I thought not.
In the meantime, who wants pizza?
