A couple years back, people would joke that they were tired of living in unprecedented times. Well, we’re still there and I don’t really see anyone laughing. Inflation is a real problem and it comes at a time when the beer industry in Ontario is being shaken up by serious changes to the retail program in the province.
At this point, you can buy beer at the LCBO, The Beer Store, Grocery, Convenience, and Big Box Retailers like Costco and Walmart, not to mention bars, restaurants, stadiums, concerts and bottle shops. By next year, beer will have replaced Girl Guide Cookies and six year olds will be standing on corners announcing in loud high pitched voices that they have mint flavoured stouts for sale.
Crucially, standard pricing has gone out the window. It used to be the case that pricing was standard across The Beer Store and LCBO organizations and the price you saw on the shelf was what you were going to pay. With the reform that’s taken place, that is still the case at the LCBO, but the price that you’re going to see in all other outlets is the base price. When you get to the check out, you’re still going to have to pay HST and Deposit on those products.
It looks like everything costs less, but if anything, it’s going to be the same or higher.
As I mentioned last time, I’ve had to put aside the system that I’d been using to make sense of beer in Ontario for the last fifteen years because of this change. Discount brands at The Beer Store are actually being undercut by Premium brands at Costco.
For this reason, from this point on, I’m going to track three brands, all of which are in Costco. The St.John’s Wort Beer Value Index is going to track Budweiser, Steam Whistle Pilsner, and Flying Monkey’s Juicy Ass. They are among the best selling brands in their respective categories across the province. Yes, I know you don’t like the name of the last one. It has not yet slowed down their sales.
One of the questions we’re going to have to ask here is “How much does a beer actually cost?” The answer is manifold. If you average different SKU sizes out to a 16 ounce pint or 473 ml can, basically every format for the same beer is going to cost different amounts. It doesn’t scale linearly, and depending on the retailer (which now has freedom to adjust price point) it could be significantly different.
The other, perhaps more important question you have to ask, with your wallet lighter than usual because of the economy, is “what is it worth to you?” I know that Craft Beer is theoretically cultural and artisanal and frequently exempt from value analysis by beer writers, but there ain’t no such thing as a Craft Dollar. They’re all worth the same. So, what are you willing to spend?
HOW MUCH IS 16 OUNCES OF BUDWEISER?
It’s a straightforward question that is now ridiculously hard to answer.
Among the various package sizes at The Beer Store, there’s variation. The most expensive option is a six pack of bottles; it would be $3.40/473ml. If you bought twelve 740ml cans, it would be $2.42/473ml. Just within TBS, there’s a dollar per serving variation possible.
You would think that large package sizes would favour TBS, but since the rules are out the window a twelve pack of 473ml cans is actually cheaper at LCBO by about ten cents a serving.
The cheapest possible way to buy Budweiser is at Costco. It comes in at $2.11 per serving at $75.98 per 48 pack of 355ml cans. Of course, you’ve got to buy a membership, but they’re undercutting TBS by $0.60 per serving. It must be significantly undercutting the LCBO wholesale price since the LCBO wholesale price on 30 355ml cans is $53.35.
If you go to Circle K, you’re going to pay $5.29 per serving. That’s about $3.18 worth of convenience compared to Costco.
At Skydome you’ll pay $14.59 for 18oz of beer, which works out to $15.14 per serving after tax if you don’t tip the staff. We’ll discount that one because it’s bonkers and I don’t have pricing for the other two. You’d be better off pre-gaming at The Pint Public House for $11.83 per serving even after you tip 20%.
What all of this means is that there’s as much as a $9.72 dollar difference between the cheapest and most expensive possible Budweiser.
HOW MUCH IS 16 OUNCES OF STEAMWHISTLE?
Steam Whistle has fewer SKUs, which makes my life easier.
Among the various TBS packages, the most expensive way to buy Steam Whistle is in the 12 bottle package if we discount the 20L keg as unreasonable for most people’s weekend. It’s $3.79/473ml. In order to get a six pack of bottles, you’d need to either go to the brewery (they kiboshed home delivery two weeks ago) or the LCBO. It comes out to about $4.35/473ml.
The LCBO is again very slightly cheaper on large package sizes than TBS for reasons just beyond my ken. About 45 cents cheaper for a twelve pack of 473ml cans. About seven cents a serving.
The cheapest option is actually the brewery if you were to go and pick it up. Costco sits at $55.50 for a 24 pack of 355ml cans or about $3.08 a serving. Steam Whistle is selling their own product for $53.32 or about $2.96 a serving.
At Circle K, that’s $4.95 per 473ml serving. Cheaper than Budweiser and only $1.87 of convenience compared to Costco.
If you’re going to Skydome, you’d just go to the Steam Whistle Beer Hall to pre-game. A can of their beer with tax and tip at the brewery would be $12.14 per serving, so it’s a better decision to order the Masskrug of the unfiltered version for $8.27 per serving. If you went to The Pint, you’d pay $11.83 a serving.
The same 16 ounces of Steam Whistle has a $9.18 cent price per serving difference depending on where and how you buy it. It’s a little weird that it’s most expensive at their own restaurant, but that is prime real estate.
HOW MUCH IS 16 OUNCES OF JUICY ASS?
Well, that falls under “stuff you wouldn’t wanna google.”
This one’s weird. It’s not available in quite as many SKU’s since Flying Monkeys really only bottle speciality products. A 473ml can at TBS is $3.93 and eight cents cheaper at LCBO for $3.85.
A 24 pack of cans from the brewery will run you 79 dollars all in except for shipping and the tax on shipping, so you’re better off picking that up if you are in Toronto since the shipping was very expensive. $3.29 per serving at pick up.
Costco undercuts that with 24x473ml cans for $3.16 per serving.
Circle K sits at $4.95 per serving, which means that the Craft IPA has the smallest convenience tax compared to Costco at only $1.79.
If you went to The Pint before the ball game you’d pay about $13.08 with tax and tip in.
Unsurprisingly, the most expensive beer to produce has the highest differential at $9.92 between potential options.
WHAT DOES THAT MEAN TO YOU?
Nothing. It’s designed that way. Everything is worth what its purchaser will pay for it. The new retail situation is designed to obfuscate the actual value of a good. You’re not paying for beer. You’re paying for convenience, packaging preference, personal preference, occasion, experience, service, or a big box store membership.
The new system is such that Costco is actually willing to lose money on beer to get you to buy a membership. This is to say that we have shifted from an alcohol retailing system in this province which existed to retail alcohol to an alcohol retailing system in this province that exists to retail adjacent products. It’s going to get more confusing before it gets less confusing, but in the meantime do me favour: Don’t be a sucker and buy beer at the Circle K. It’s the worst possible deal.
Also, if you already have a Costco membership, pick me up some of those San Marzano tomatoes. Terrific value.
Sprawling spreadsheet full of dissected beer pricing and market data laid out in rows and columns columns that exist in a “I made this spreadsheet for me and it’s up to you to follow my thought process” format? Now you’re speaking my language.
Oh yeah. You know it.
In Alberta you don’t need a costco membership to shop their liquor outlet (which is, by law, in a separate building from the main store). But, the beer choice is very limited. Macro brands out the gazoo, one Big Rock (arguable whether they still qualify as craft) mix pack, a Sea Change (def craft) mix pack, and that’s about it. Seems to be less variability than in ON. And certainly way less than the US, which often has a broad craft base (according to my brother who sends pictures in real time to taunt me)
I like your closing. What does that mean to you? Nothing.
It’s designed to confound.