As we established in Rule 1, beer is a luxury good that contains small amounts of recreational poison which people really enjoy. For that reason, it hits people’s desire button. The difficulty is that since the audience for beer does not have uniform desires (since desire is somewhat ephemeral) and since desire is frequently not arrived at from a place of rationality, the market is a little hard to predict.

The luxury good part is important here as beer is not a necessity, much as it pains me to say it. For our purposes, we’re separating out want and need. People are concerned about need as it pertains to beer, and that number increases during January and February. It’s a good concern to have. 

Because it’s a luxury good, beer has an increased fungibility quotient compared to normal goods. Many normal goods are fungible at an essential level. Take toilet paper for example: Disposable by design, but when you need it you’re not really concerned about the ply count. Brand name is only important until the morning coffee takes hold.

You need water in order to live, and it comes out of a tap. You might express a desire for higher quality water, but the acquisition of water is non-negotiable. It might come from a glacier or an aquifer or an iceberg, but it’s still water. 

You need food in order to live, and maybe you can grow some of it; most of it probably comes from the store. At that point you might have a preference in re: boxed Macaroni and Cheese. There’s probably a rational decision to be made between PC White Cheddar and Annie’s White Cheddar Shells. Things like price, flavour, packaging, and ownership might weigh on that decision. Maybe you have kids who like bunny shaped pasta. There’s a preference to be expressed, but it’s still essential that you consume calories.

Because no one actually needs beer, a purchase is completely a statement of preference. The idea that you’re dealing with a rational consumer goes out the window at that exact point. Generally speaking, beer is going to contain alcohol, and this means that the consumer gets a chemical reward for having expressed a preference. Preference is self-reinforcing.

The thought process goes something like this: “I like this thing. It makes me feel good. I know what I like. What I like must be good since I feel good.” 

There are any number of things that could influence that decision. It could be the flavour of the beer. It could be the appearance of the beer. It could be the glassware that the beer comes in. It could be the company in which you drink the beer. It could be that you’re on vacation and the beer is appropriate to that experience. It could be that you like the pub you’re sitting in. It could even be what they used to call brand loyalty.

Last year I wrote a piece about how Guinness destroys rational thought. People who otherwise know nothing about beer will be quick to tell you which pub they think pours the best pint of Guinness. This is patently absurd. No one has an opinion about which pub pours the best pint of Molson Canadian. Guinness is caught up in a tangled web of Emerald projection. The desire button has been pressed and you’re humming Wild Colonial Boy and swaying on a barstool like Brendan Behan. 

Speaking of, Guinness has been in business since 1759. Molson has been in business since 1786. Labatt has been in business since 1847. They’ve collectively got about seven hundred years of experience.

It’s not uncommon for people to complain about the manufacturers of automobiles. There are people who think the Tesla Cybertruck is ugly and that its hood might cut off one of your fingers and that it might not have traction on ice and that it would be hard to charge during a power outage. These are all fair complaints. 

Very few of those people would say, “well, I could do better,” and set up shop in their garage. 

Barley is easier to acquire than Lithium, and so we have homebrewers. Currently we have something like 360 breweries in Ontario. Many of them are owned by people who looked at large multinational corporations that had dominated advertising on television, radio, and in print for their entire lives; corporations that owned the means of distribution for their product through a provincially sanctioned distribution and sales network. These people, singly or multiply, looked at centuries of experience and billions of dollars in revenue and said: “I could do that.”

The desire button is mighty. The thought process goes something like this: “I know I like making this thing that makes me feel good. What I like must be good since I feel good. I would probably feel good all the time if I made this all the time.” That’s when they get a ten year lease and a half million in equipment.

This applies to other aspects of activity.

One of the most frequently asked questions on seminal Ontario beer forum Bar Towel was always “Why can’t we get X product here in Ontario?” This would frequently be coded as a criticism of specific AGCO laws and Ontario’s import structure, although only a few members were lawyers and none of them specialized in the area. It didn’t take into account the audience for X product outside of the person asking the question. It didn’t take into account that the person asking the question had had X product on vacation in Belgium or Denver or Austin or Vancouver and their experience was soaked in personal meaning. The person asking the question always thought it was perfectly rational, but really what they were saying was “I am sad that I cannot immediately have this thing that I want.” Some of those people set up import businesses.

You can also see it when awards are announced. Here is a competition in which brewers have paid to enter their products. It might be regional or national or global. It will have taken months of work and dozens of hours of judging by many qualified professionals.

The person reading the results, if they don’t jibe with that person’s experience, is quite likely to say “Well, that’s incorrect,” or “Who judged that?” Probably they don’t know how the competition works, or which breweries entered. It’s unlikely that they’ve tried all the products that won. They certainly won’t have tried all the products that entered. However, they have a non-rational self-reinforcing preference. That beats expertise hands down every time.

Consumer preference is bound up in identity and identity is made up of all manner of complicated factors. The consumer might not be self reflective. They might not know why they want what they want, but they know what they want. They absolutely do not know what they know about the subject and what they do not know about the subject. They want beer, and insofar as that desire is concerned, it’s all the expertise most of them will respect.

This is life in the land of the desire button. I should know. I’m an expert.