tag:blogger.com,1999:blog-7695054139670388214.post4371538737790737182..comments2024-03-25T02:38:06.683-07:00Comments on Beeronomics: Sierra Nevada: Economies of Scale vs. Transportation CostsPatrick Emersonhttp://www.blogger.com/profile/17242234148546323374noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7695054139670388214.post-28031634834475821472012-01-31T11:18:50.148-08:002012-01-31T11:18:50.148-08:00I wrote a paper on scalability in the brewing indu...I wrote a paper on scalability in the brewing industry for an econ class a number of years ago. I've actually forgotten what my conclusions were (I know, cool story, bro), but I recall the phenomenon of Miller buying up and shuttering regional breweries was occurring at the time. These facilities (Blitz, Olympia, etc.) no longer made sense to operate within a company that was operating on a national scale. So, at least for industrial lager production at the national level, there's a minimum production size and/or territory for the huge brewery conglomerates.<br /><br />Also, the book Beer Blast by Philip Van Munching had a lot of interesting insight into industry consolidation over the later decades of the 20th century. Granted, it was published in 1998, so I'm not sure industrial-scale craft facilities were ever a thought, but it's an interesting read.ElGordohttps://www.blogger.com/profile/14008502996123204974noreply@blogger.comtag:blogger.com,1999:blog-7695054139670388214.post-67754939732086869682012-01-27T23:32:49.130-08:002012-01-27T23:32:49.130-08:00There's another huge factor here: the quality ...There's another huge factor here: the quality of the beer. Having two breweries allows Sierra Nevada greater influence (if not control) over how soon their beer appears on supermarket shelves and in pubs on the East Coast. Their beer, particularly the Pale, is not durable. It has delicate hop flavors and aroms that degrade pretty quickly. In a sense, it's like produce that way; the closer SN can place a brewery near its customers, the better chance it has of being perfectly ripe.Jeff Alworthhttps://www.blogger.com/profile/02930119177544342495noreply@blogger.comtag:blogger.com,1999:blog-7695054139670388214.post-71980730783699192232012-01-26T12:34:53.595-08:002012-01-26T12:34:53.595-08:00I think it might be interesting to note, too, that...I think it might be interesting to note, too, that by adding a second facility Sierra could actually increase its scale economies along some dimensions if it allows each facility to specialize. They currently brew lots of types of beer, and all of those require separate storage for not only outputs but inputs.<br /><br />But certainly transport is a critical factor for craft beer. It's why Flying Dog relocated from Aspen to Frederick, MD and it's one reason so many eastern brewers don't go west (it's a long way from Chicago and St. Louis to Phoenix, LA, SD, SF, Portland and Seattle, with only Denver in between.The Oriole Wayhttps://www.blogger.com/profile/16483309131692836436noreply@blogger.com