A Missed Opportunity— Did The Craft Beer Industry Lose Their One Chance To Grow Their Market Share?
If you can mark wine up hundreds of dollars, why not beer?
The general answer is that pricing is incredibly hard. We think of consumers as having a demand function, but in fact, if you think about it for five minutes, you’ll realize how difficult it is. For example, think about something as simple as a cup of coffee or a Popsicle, and then I ask you how much this is worth to you in terms of money. This is an incredibly difficult judgment to make. Imagine, right now, here’s a cup of coffee. How much pleasure is it giving you in terms of money? This is very, very difficult. So what do people do instead? They resort to responses that they can more easily compute. We look at how much it cost us last week or last month.
Behavioural Economist Dan Ariely speaking about his book: Predictably Irrational: The Hidden Forces That Shape Our Decisions
As I see it, for most of us, a beer is a beer. It’s what you drink with your Dad or with your buddies. It’s next to you while you watch the World Cup or when you’re eating chicken wings. Beer has its place in our society — put simply, it’s everywhere. But so is wine. The two dominant kings of the alcohol consumption community have been brewed and fermented for thousands of years. Yet, for some…
