Monday, December 29, 2008

22oz Bottles

[Note: Slow blogging this week as I enjoy the holidays with my family]

As mobile bottlers allow more and more small breweries to sell there wares in retail outlets, the 22oz 'share bottle' has proliferated. Now in stores in Oregon it is not uncommon to see a selection of these bottles displayed in the refrigerated case.

But why 22oz bottles? Mobile bottlers can presumably just as easily handle 12oz bottles, and getting customers to buy a six-pack means you are selling 72oz of beer rather than 22.

I can think of a few reasons: shelf space is scarce in markets and it is probably easier to get retailers to stock 22oz bottles. Also, in the space of one six-pack, you could display three varieties. Finally, the amount of packaging is reduced - lowering costs.

But why do consumers buy them? They are a pretty bad deal. Last night I paid $3.39 for a bottle of Ninkasi Total Domination IPA (an amazing beer - in fact, probably my favorite Oregon beer and just one of Ninkasi's outstanding beers so I am delighted they are bottling). This translates to $11.09 for 72oz - a six-pack. Ouch. [But well worth it by the way] But the thing is most of us don't make these calculations in our head and a little over three bucks for a big bottle of beer seems like a reasonable deal. Also, there is a nice kind of pre-commitment to opening up a 22oz bottle I suppose: once it's opened you gotta finish it. Finally, many of these are 'big' beers and perhaps a six pack represents just a bit too much, plus making these big beers are more expensive, so charging $11 for a six-pack might be required should they go that route. As a consumer, I used to prefer the convenience of the 12oz bottle, but I am beginning to like the 22oz bottle more and more. Still it is a lot of beer for one person and my wife is not really a beer drinker so I wouldn't mind more sixers.

Anyway, 'tis the season not to worry about it and just enjoy. Cheers to the new year!

Friday, December 19, 2008

Honest Pints in Britain - or - Still Imperial after all These Years

There has been a lot of attention paid to my good friend's Honest Pint Project here in the US as people start to wonder what size glass of beer they are being served. Now from the UK comes this tidbit: after a battle with the bureaucrats in the European Union, the Brits won the fight to keep the imperial pint. Doing so preserved an essential part of their culture: to drink an ungodly number of true imperial pints in one sitting. [I honestly don't know how they do it - I was once in Heathrow Airport in the early morning in the international departures lounge watching a group of English holiday makers down beer and each had about 6 empty pint glasses in front of them, and they hadn't even left yet for their vacation! Truly astonishing, and pity the poor Spanish who have to put up with the louts. Me mum's English so I know of what I speak.]

From the BBC: "Innovation, Universities and Skills Secretary John Denham, who is responsible for national weights and measures, was delighted. He said after the European Parliament vote: 'People in Britain like their pint and their mile. They should be able to use the measures they are most familiar with, and now they can be sure that they will continue to do so. '"

I have two comments. First, why don't we label the glassware used in bars so we know what we are being served? Second a minister of innovation, universities and skills?!? How cool is that title? Of course, that the secretary of I, U and S is involved in the imperial pint fracas kinds puts lie to the title, doesn't it? Still, it doesn't seem like such a bad idea to institutionalize the idea that a country should have a coordinated approach to education and research and development.

Ah well, its Friday, so cheers! Have a good weekend.

Thursday, December 11, 2008

Krugman, the Nobel and Beervana

So this blog post has been brewing in my head for a while now (rim-shot please), but now that Paul Krugman is in Sweden to collect his much-deserved Nobel, let's think about how his ideas explain Beervana.

[From Paul's NY Times page: The marquee for his talk at the Bagdad - Paul , Beer, Oregon - get it?]

Paul's most influential insights came from the idea that there may be increasing returns in trade. When applied to trade this insight helped explain why we see two-way trade in things like cars and was the principle reason he won the Nobel. But this insight quickly spilled over into other areas as well - for example, why is Silicon Valley still the center for high tech industry given that it is perhaps the most expensive place on earth to do business? Paul's answer has a lot to do with heads starts and learning curves: It may be cheaper to move Silicon Valley to Bangalore if you could do it overnight, but you can't - it takes time to build up the knowledge base and skilled work force and while that is happening, Silicon Valley can compete the nascent Bangalore away. This helps explain that while Bangalore has been able to chip away a little bit at Silicon Valley's dominance it hasn't done that much. This story is half trade and half economic geography. Economic geography talks about increasing returns that come from concentration: part of why Silicon Valley is so successful is because of the close connection inventors, entrepreneurs and venture capitalists have by virtue of being neighbors and part is the concentration of skilled workers to populate the firms.

So what does this have to do with Beervana - Portland (and Oregon's) disproportionate number of breweries and beer drinking? Well the same stories about Silicon Valley can be told here: brewing and beer drinking are both learning processes and ones that benefit from concentration. Brewing takes skill and practice and a there are a lot of knowledge spill-overs that comes from brewers talking and sampling each others products. Beer drinkers have to learn about the ingredients, how they taste and develop a palate and taste for the more robustly flavored beers. So the punchline is you tend to have concentration rather than dispersion and that places that get early starts tend to hold onto that advantage - familiar themes from Paul's work.

So really, beer drinkers of Oregon, this Nobel's all about you! Let's toast to that...

By the way, just to complete the circle - Beervana blogger Jeff Alworth left a comment on the same Krugman blog page that includes the picture above.