Fair prices and great beer
16th October 2020
We get a lot of questions about the price of our beer, so we thought this month’s ‘Directors' Diary’* was a great place to chat about the what and the how behind the price of good beer!
First and foremost, what matters to us is quality – we ensure that everything that goes into our beer and bottles, from the barley and hops to the glass and packaging, is of the best quality. This, naturally, has an effect on our pricing!
However, we’re often asked the very reasonable question of why our beer is sometimes cheaper to buy at a supermarket than directly from us either on-site or online.
Crucially, once a retailer/wholesaler has bought our beer, we have no influence on how they sell our beer and at what price. We can share a ‘recommended retail price’ (RRP) but they don’t need to adhere to that.
In fact, supermarkets often use beer as a ‘loss leader’. This is a pricing strategy whereby a product is sold at a price below market cost or RRP to stimulate sales of other, more profitable goods. It is used as an incentive to draw people into stores where they are likely to ‘top up’ with other goods at the same time.
For example, at the moment, when it comes to craft beer and real ale at the major supermarkets, ASDA and Tesco are offering a ‘four for £6’ deal; Morrisons are offering ‘three for £5’ and Waitrose a mix of both (depending on brands). Sainsburys are the only retailer that doesn't work to this ‘promotional’ model with beer.
The basic idea is that Person X will take advantage of this offer whilst also doing the weekly shop and here the retailers are banking on the fact that Person X will think, ‘oh, I may as well get 4 then as they’re on offer’. Knowing this, they are likely to return to that store again for future purchases as they know they can also pick up some beer, on offer, at the same time.
This works well for supermarkets but is trickier for smaller, often independent, retailers as well as us. There are also things like overheads and economies of scale to take into consideration too.
Here at Wold Top we work hard and carefully to ensure that our prices are fair and reflect the quality of the ingredients, the skills of our brilliant team and the great taste of the beer! But no matter what, whether you choose to buy it directly from a supermarket, a smaller indie retailer or directly from us, you can always be sure that the beer you pour and drink will taste fantastic.
Alex and Kate
* The Directors' Diary is a regular feature in our monthly newsletter. If you'd like to sign up, simply follow this link