The fact that I’m a beer snob is beside the point

Print So, it’s interesting to me that so many libertarian-minded people, when they look at beer sales in America, say “People drink Budweiser because people like Budweiser!” and fail to take into account the laws and barriers to entry that have helped create the illusion that the vast majority of beer drinkers in America like Budweiser because it’s so tasty. Anyone who points these facts out, or who points out that the distribution of alcohol in this country, thanks to various stupid regulations and entrenched interests, makes it extremely difficult for craft brewers to compete, is immediately called a beer snob.

Nor does it matter that the playing field is so uneven that the big brewers like InBev have truly massive advertising budgets, as if splashing Budweiser commercials all over the television, during sporting events, the Superbowl, etc. has no influence whatsoever on the choices people make over which beer to buy. These vast advertising treasure chests are just incidental I guess. And apparently all I’m doing in my continued discussion of craft beer is stating that my preference for craft brews is superior and that non-craft beer drinkers have bad taste.

Even if I did think this*, it’s still beside the point. The point is, market share is not a good indicator of peoples tastes when the market itself is so badly broken. Most people drink Budweiser because they haven’t heard of other beers, because they grew up drinking it, or because people are creatures of habit. Believe me, if Sam Adams had the same advertising budget and national brand awareness that Budweiser has, not to mention their distribution capacity, they’d be pretty damn competitive. Same goes for any other small brewer with a decent product.

* I do think that most craft brews are better than the big American lagers, but that’s neither here nor there. I like chocolate cake better than not-chocolate cake, but if I were discussing the reason why certain cake companies were given an upper hand in the cake market over others, taste would have very little to do with it.

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83 thoughts on “The fact that I’m a beer snob is beside the point

  1. I agree with most of this, but there’s more to it than “stupid regulations and entrenched interests” and advertising budgets.

    Some aspects of quality craftsmanship don’t scale. Sam Adams (probably) and Dogfish Head (certainly) *can’t* produce the same amount of beer as any of InBev’s big brands due to constraints on supply and production methods.

    There’s also the matter of price. Even if Bud and Sam Adams were at complete parity on production volume and marketing budget, more people are likely to choose $3 six-packs over $8 six-packs, even if the product is markedly inferior.

    In this sense people do actually “like” Bud more than craft beers in the sense that it’s more accessible and cheaper, making relative market share a somewhat-valid indicator of consumer preference when you take all relevant variables into account.

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      • I think that’s only partially true.

        The massive scale of Budweiser also has a lot to do with their willingness to brew with cheap rice, minuscule quantities of cheap hops and municipal water supplies, along with the fact that a suitcase of Bud cans is dirt cheap compared to craft beer exactly because they optimize their production for volume and cost rather than quality. If Sam Adams did that they wouldn’t be Sam Adams any more.

        (Semi-relevant aside: McDonald’s and In-N-Out Burger both started around the same time with their first locations only a few miles apart. One is now a massively-profitable mega-corp with locations everywhere, but reviled by foodies and nutritionists. The other is 1% of the size, but has a large cadre of knowledgeable, loyal fans who revere their focus on quality.)

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        • DarrenG
          McD’s has one of the top 20 french fries around.

          According to Chowhound, there are a LOT of folks convinced In and Out is just hype.

          Around these parts, McD’s is a local thing. Irwin has the Big Mac Museum, after all — and there, they make that sauce right!

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          • I’m a frequenter of Chowhound too, and the folks there who think In-N-Out is over-hyped don’t generally prefer McDonald’s :)

            Regardless, my only point was that different businesses in the same exact market can often take very different paths for reasons other than regulatory incentives.

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      • E.D.,

        We don’t have that kind of regulatory structure in place for pizza, but we have a handful of national pizza chains–mostly with insipid pies–and large numbers of stand-alone pizza joints, many with vastly more creative dishes. Why would beer be different? Anheuser-Busch is just the Pizza Hut of beers, no?

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        • This analogy plays into Erik’s point that without the distortions imposed by decades of post-Prohibition industry regulation Bud (et al) wouldn’t be quite as dominant.

          The most recent numbers a quick Google turns up say that Pizza Hut has less than 20% of the U.S. pizza market, and all national chains combined account for only a slight majority share of the market, with nearly half still being local, independent pizza makers.

          On the other hand, Anheuser-Busch accounts for over 40% of the U.S. market and all combined craft breweries are somewhere around 7% of the market.

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          • Though arguably this has a lot to do with the fact that pizza has a shelf life of about half an hour and thus has to be made locally and can’t benefit from economies of scale nearly as well as canned and bottled beverages can. If you look at the market for soft drinks, the picture looks very similar to beer, with three big-name brands (Coke, Pepsi, Dr. Pepper-Snapple) with almot 90% market share and a bunch of bit players dividing up the rest.

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            • Yeah, but I’d argue that Coke and Pepsi are a lot further up in the quality scale than Bud and Coors. Sure they use corn syrup in some of their products, but Coca Cola still imports coca leaves from south america, for example.

              Consider this: Coke has a huge market share everywhere in the world. But almost nobody drinks Budweiser outside the US and Canada.

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  2. True, but people who like anything more expensive than Two Buck Chuck are called “wine snobs”, and there’s not really any legislation that makes smaller boutique producers unable to compete or get the same market penetration as larger ones.

    I’m not saying that you’re a “beer snob”, I’m saying that mostly people buy Bud over something else because it’s cheaper than anything else. (Although, as you point out, there’s familiarity; when you get Bud you know what you’re getting, whereas some of these craft brews taste like earwax.)

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  3. E.D.,

    Not that I disagree with any criticisms of the current alcohol market regulations (section two of the 21st Amendment practically invites rent-seeking), but it’s also true that many people prefer the more simple taste of Bud or Miller to the more complex and robust taste of many craft beers. It’s also true that if what you really want to do is pound down a bunch of them, you’re better off drinking PBR than Guinness.

    So I think both things are going on, and it’s hard to disentangle just how much effect is caused by each. Culture plays a big role, too–the Pacific Northwest, for example, was ahead of the curve on the craft beer market and it was distinctly a cultural trait (brought on, I believe, by incessant rain and gloom, weather much better suited to appreciating a craft beer’s subtlety than is a hot humid day). But now that culture is slowly spreading throughout the U.S. Of course part of the non-craft culture in much of the country is brought on by the factors you mentioned, but perhaps not all of it–cultural willingness to try new things, to be willing to indulge in something viewed as somewhat elitist also play a role.

    I will criticize you when you say “if Sam Adams had Budweiser’s advertising budget and national brand awareness…” but in so doing you take a static view of the market. Budweiser did not always have national brand awareness; they created it. Sam Adams 20 years ago did not have national brand awareness, but now they are developing it–I would even argue they have developed it, they just haven’t reached Bud’s level of name recognition. So when you look at the market dynamically you realize brands can over time move beyond just craft status. It’s not necessarily easy, though, and part of the difficulty is indeed the regulations you are criticizing.

    As a final comment, I would argue that your preference for craft beers does demonstrate that you have superior taste, and that many Americans do have bad taste in beer. I know people who prefer Coors to Leinenkugels, Miller Light to Sierra Nevada, or PBR to Anchor Steam. Hell, I know people who love Jack Daniels but don’t understand a good craft bourbon. And some people actually like listening to Miley Cyrus more than Lucinda Williams. You can’t put all the blame on the regulations and the corporations–the mass taste is usually an unimpressive one.

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  4. So, it’s interesting to me that so many libertarian-minded people, when they look at beer sales in America, say “People drink Budweiser because people like Budweiser!” and fail to take into account the laws and barriers to entry that have helped create the illusion that the vast majority of beer drinkers in America like Budweiser because it’s so tasty.

    I don’t accept that this preference is an illusion. Perhaps it is created by advertising. Perhaps the big breweries really can offer an appealing price-and-product combo thanks to rent seeking alone. Given those conditions, however, consumer preferences still aren’t inauthentic.

    What’s your data saying that this preference is an illusion? And what’s your True Rejection? (I’ve inflicted craft brews on unwilling drinkers. Have you? That’s my True Rejection of the premise at hand, and unfortunately, it doesn’t work too well in my experience.)

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    • Even if the American main preference was for a fairly watered down Pilsner or Lager-type, absent a long period of regulatory enforcement that concentrated commercial brewing to a few companies, I just don’t find it persuasive that we’d find ourselves in a situation with as much market dominance as the big 3 American brewers do. It might be that those types dominate, but probably less likely that just a few brews would make up ~90% of the market.
      I think it’s a good question why wine doesn’t turn out this way. After all, I am guessing Merlot and Chardonnay dominate but no one’s out there with 20% of the market, either.

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  5. Quick followup: Kudos to DarrenG’s points. When deciding what we “like,” cost does matter. I might prefer to drive a Ferrari, but my price point is only a Chrysler (a use minivan, that is). And some companies, like In-n-Out (thanks for making me drool, Darren!), prefer to remain smaller and more elite (although they are now expanding too rapidly, I fear).

    And in line with what Density Duck said, it’s long been a standard economic line that McDonald’s didn’t build a better burger, just a predictably consistent one. If I go to another state, I know what I’m getting at MickyD’s. The SuperLocalBurger shop next door might have a superior burger, but it also might give me something resembling dog vomit. As much as I prefer craft beers, I’ve had some over the years that I think are astoundingly wretched. I’ve never been surprised, either pleasantly or unpleasantly, by a Bud. And some people prefer that comfort and familiarity to the ucnertain adventure of trying new craft brews.

    Again, all your criticisms of the regulations is right on, and they clearly do play a significant role in the distribution of the beer market. But I do think you’re not allowing a large enough role to mass tastes.

    You’re resisting the allure of true snobbery–go ahead, sneer at the ignorant masses. It’s ever so self-gratifying!

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  6. OK, I’ll go out on this limb and get slammed by everyone as an effete liberal elitist:

    I know people who love – and I mean love – a particular IPA, or dark amber ale, or porter or seasonal fruit ale from any number of local microbreweries. (Hey, I live in Oregon, where many restaurants have their own micro. You can’t swing a cat here without in subsequently needing to be enrolled in a 12 step substance abuse program.)

    I don’t know anyone – I mean anyone – that loves Coors, or Budweiser, or Miller. I have known many, on the other hand, that love getting a buzz, or seriously drunk.

    I am not buying this “people love the great taste of Coors” argument at all.

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  7. “Bad” beers are not all equal. PBR > High Life > MGD > Coors > Bud, etc. And there are times all I want is a PBR, not anything “better,” even though I think “better” beer is, yes, actually better.

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  8. “Nor does it matter that the playing field is so uneven that the big brewers like InBev have truly massive advertising budgets, as if splashing Budweiser commercials all over the television, during sporting events, the Superbowl, etc. has no influence whatsoever on the choices people make over which beer to buy. These vast advertising treasure chests are just incidental I guess.”

    I love this point. If “the market” decides, and players in the market spend hugely on advertising, it should follow that firms have reason to believe that advertising has a net benefit to them. Therefore consumers don’t just adopt perfectly informed, utility maximizing (satisficing, rather) tastes–we know this also from a ton of research (Kahneman, many others).

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  9. I don’t have anything to add re: policy. I will say this: we live in a golden age of American brewing. I agree that the MOAR HOPS! craze is annoying at the moment (though I’ve come to appreciate a reasonably-hopped brew, whereas in the past I was strictly a brown ale guy), but overall things are great.

    So many tasty brews available in the store now… it’s beautiful.

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