Thursday, December 13, 2012

More on Value

I got some interesting (and predictable) reactions from my post on what Westvleteren is worth yesterday.  But I think I wasn't clear enough so here goes another shot.

My main point is that trying to define value is a bit like chasing your tail, you just end up going in circles.  It doesn't matter if a beer is made by 38 monks over a year with hops hand picked by virgins, the finest floor malted heritage barley, water from the melted snow of the peak of K2 and yeast from John Meier's beard: if it tastes bad, it is worthless.  A product's value come from the willingness of consumers to give up the consumption of something else to consume it (which is fancy econo-speak for spend money for it).

Now value comes in two forms: individual and market.  Each individual is idiosyncratic - they have particular tastes, preferences and income.  An individuals value of Westvleteren can come from how much they like the taste, how much they enjoy being one of the in-crowd that has their own bottles, how much they care that their purchase will help the monks stay dry in the rain.  There are no rules, anything that you find worth enough to pay something for is part of its value to you the individual.

Once we sum up all the individuals that have some positive valuation of the good we get the demand curve for the good and this is a measure of its market value.  If there are enough people who are willing to pay more than the producer is willing to accept, transactions will occur, everyone is better off and eventually the market value of the good is found as the equilibrium point between supply and demand. 

I am not trying to tell you how you should value Westvleteren, that totally depends on you, but I am trying to say that the value of this special six-pack of Westvleteren beer has nothing intrinsic to do with the beer or its makers other than the way the quality of the ingredients and the skill of the brewers translates to good tasting beer. 

Tuesday, December 4, 2012

A Sneak Peak of a World Ruled by ABInBev

Cervejaria Nacional
You can have your own look, all you have to do is hop on a flight to Brazil where the whole AmBev revolution took place: mergers and acquisitions, homogenization of 'beer' and cartel like control of tap handles and shelf space.

Yes, there is a craft beer scene in Brazil and yes there is a substantial community of beer lovers and geeks but it is a very small niche scene in Brazil and does not really register on the public radar.  What dominates are the big brands that are entirely indistinguishable to my taste buds and which are all frankly terrible.  The craft beers I had were all decent but none were exceptional and it appears (at least in my small sample) that there is more love for the malt than the hop and not much attention paid to the yeast.  I found the beers generally heavy for my taste and lacking a characteristic hop or yeast note to make the beer more interesting.  

I say this all after a month in São Paulo where I was very busy and missed my chance to get to the place on the top of my list: the Cervejaria Nacional in Pinherios neighbothood of São Paulo.  I had limited time and ability to seek out craft beer, but I did what I could and found a few stores (first and foremost the Casa Santa Luzia on Avendia Lorena in Jardins) that had a pretty good selection of Brazilian craft beer.  But such is the craft beer scene that more attention is devoted to imports than to Brazilian craft beer.    

What I worry about is that the craft beer scene in the US has already found solid footing and took advantage of the failings of macro-brew to establish a beach head and start their very successful assault on the big beer empire.  In Brazil, big beer already has more numerous defenses (tied houses and restaurants), has recently retrenched with consolidation and scaling up, leaving the craft brewers precious little sand upon which to establish themselves.

My great hope lies in Carvejaria Nacional - from the outside it looks a treat. It has everything you want in a brew pub - ambitious brews, constantly rotating experimental beers, and a diversity of styles with plenty of English ale and Belgian sour influences to round out the traditional German influence that dominates Brazilian beer.  I won't know until I visit if the reality matches my expectations.

Fortunately I am going back for a seven month stint in January so I'll have plenty of time to figure it out.  Unfortunately, life otherwise is hard on this NW hop head. Last night I cracked a Ninkasi Total Dom for my first beer back stateside and it was like the rapture - finally!

So for half a year, starting in January, this blog (sporadic as it is) will try to get a handle on both the economics of the Brazilian beer scene and the beer itself.  Until then I can get excited about the Oregon winter ale season!