Why Is Some Craft Beer Heavily Discounted?

Craft beer can be heavily discounted when a brewery, distributor or retailer needs to move stock more quickly than it would through the normal sales route. That can happen because of surplus production, cancelled orders, an approaching best-before date, seasonal stock, packaging changes or simply because warehouse space and cash are tied up in beer that needs to sell.

The important point is this:

A large discount doesn't automatically mean there is anything wrong with the beer.

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The Normal Price

Why Is Craft Beer Usually More Expensive in the First Place?

Before looking at why the price falls, it's worth understanding why independent craft beer can cost more than mainstream beer.

A small independent brewery may be paying for:

• Quality malt and hops
• Specialist ingredients
• Smaller production runs
• Cans, labels and cartons
• Brewing staff
• Energy
• Warehouse space
• Distribution
• Duty and other business costs
• Retailer and wholesaler margins

Independent breweries also don't necessarily have the purchasing power or economies of scale available to multinational producers making millions of litres.

A heavily hopped 440ml IPA made in relatively small quantities is therefore a very different product commercially from a mass-market lager produced at enormous scale.

That normal retail price has to support the entire route from brewery to customer.

But sometimes the circumstances change.

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Changing Priorities

What Makes a Brewery Reduce the Price?

Usually, the objective changes.

When beer is first produced, the brewery naturally wants to sell it through its normal route at a sustainable margin.

Later, the priority may become:

Move the stock efficiently and recover the money tied up in it.

At that point, accepting a lower price can make far more sense than waiting for a full-price sale that may never happen.

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Reason One

The Brewery Has More Beer Than It Can Sell Normally

A brewery may simply have more stock than its normal customer base, wholesalers or retail partners can absorb.

That beer is now surplus stock.

Perhaps sales were slower than forecast.

Perhaps the brewery produced extra stock to make sure it wouldn't run out.

Perhaps demand for one particular release never reached the expected level.

The beer hasn't necessarily changed at all.

There is simply more of it than the brewery currently needs.

If you're unfamiliar with the term, read our guide to what surplus beer is.

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Reason Two

A Large Order Gets Cancelled

Imagine a brewery has hundreds of cases allocated to a wholesaler, retailer, event or hospitality customer.

Then the order changes.

Or disappears completely.

The brewery may suddenly have pallets of beer sitting in its warehouse that had effectively already been considered sold.

That doesn't make the beer lower quality.

Finding another buyer quickly can therefore become more important than achieving the original selling price.

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Reason Three

The Beer Is Approaching Its Best-Before Date

As the BBE gets closer, the commercial window for selling the stock gets shorter.

Retailers may become less willing to take it.

Wholesalers may have minimum remaining shelf-life requirements.

Customers may be less willing to pay the usual price.

And the brewery still has all the same stock occupying its warehouse.

That can cause the commercial value of the stock to fall quickly.

But BBE relates primarily to quality rather than being the same kind of safety cut-off represented by a use-by date.

Read: what does BBE mean on beer?

Or: is beer safe to drink after its best-before date?

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Reason Four

The Brewery Changes Its Packaging

Craft beer packaging changes frequently.

Breweries update:

• Logos
• Can artwork
• Labels
• Product names
• Recipes
• Branding
• Ranges

That can leave perfectly good beer sitting in packaging the brewery no longer wants to push through its normal channels.

For the customer, that can mean paying considerably less because of the artwork on the outside rather than the beer on the inside.

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Reason Five

A Beer Has Been Discontinued

Breweries change their ranges.

A beer that was part of the core line-up last year may disappear when the brewery:

• Changes direction
• Simplifies its range
• Introduces a replacement
• Adjusts a recipe
• Changes beer style
• Concentrates on better-selling products

Remaining stock still needs to go somewhere.

Discontinued doesn't automatically mean poor quality.

It can simply mean the brewery has decided to make something else.

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Reason Six

Seasonal Beer Misses Its Selling Window

Some beer has a natural commercial season.

Think about:

• Christmas beers
• Winter stouts
• Summer releases
• Oktoberfest beers
• Festival collaborations
• Special-edition seasonal cans

A Christmas beer might be easy to sell in November.

In February, considerably less so.

The beer may still be perfectly good, but the reason people were buying it has disappeared.

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Reason Seven

A Promotion or Event Doesn't Perform as Expected

Breweries sometimes produce or reserve beer for festivals, taproom events, collaborations, retailer promotions and special launches.

If an event underperforms, the weather affects attendance or expected demand doesn't materialise, stock can be left behind.

The cost of producing it has already been incurred.

A lower selling price afterwards can therefore be preferable to allowing it to remain unsold.

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Reason Eight

The Brewery Needs Warehouse Space

Beer is physical stock.

Cases take up room.

Pallets take up considerably more room.

Breweries need that space for:

• New beer
• Packaging
• Ingredients
• Upcoming production
• Customer orders

Sometimes freeing warehouse capacity is more important than holding out for the highest possible price.

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Reason Nine

The Brewery Wants to Release Cash Tied Up in Stock

Beer sitting in a warehouse isn't just beer.

It's working capital.

The brewery has already spent money on:

• Ingredients
• Brewing
• Staff
• Energy
• Packaging
• Duty
• Storage

Until the beer sells, that money remains tied up in stock.

Selling for a lower margin today can therefore be more useful than potentially selling for a higher margin several months later.

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Big Discounts

Why Can the Discount Be So Large?

If a beer normally sells for £5 or £6 and suddenly appears for £2 or £3, it's understandable to wonder what's wrong with it.

But the original retail price and the clearance value are solving two different problems.

A normal route might look like:

A surplus route can be much shorter:

And the brewery may prioritise speed, volume and clearing stock rather than achieving its normal wholesale margin.

That creates room for a much lower customer price.

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Price vs Quality

Does a 50% Discount Mean the Beer Is 50% Worse?

No.

Price doesn't work like that.

A beer reduced from £6 to £3 hasn't necessarily lost half its quality.

The price might have changed because:

• A retailer cancelled the order
• The label is outdated
• The brewery needs warehouse space
• The season has ended
• The BBE is approaching
• The beer is being discontinued

None of those things automatically change the liquid inside the can.

That's why the reason for the discount is more useful than simply looking at the size of the discount.

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Short-Dated?

Is Heavily Discounted Beer Always Short Dated?

No.

Some discounted beer is short dated.

But heavily reduced beer can also be:

• Comfortably within its BBE
• Recently packaged
• From a cancelled order
• Surplus following a packaging change
• Seasonal excess stock
• From a discontinued line

They are not the same thing.

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Fresh Surplus

Can Fresh Beer Be Surplus?

Absolutely.

Imagine a brewery cans 10,000 units for a large customer.

A week later, the customer reduces the order by 3,000.

Those 3,000 cans may be extremely fresh.

They're also immediately surplus.

If the brewery wants the warehouse space and cash back quickly, those cans could be sold at a significant discount despite having most of their original shelf life remaining.

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Ingredients

Does Cheap Craft Beer Mean Cheap Ingredients?

Not necessarily.

LowCostBeer doesn't commission breweries to make deliberately inferior versions of existing beers simply so we can sell them cheaply.

When we rescue surplus stock, the beer has normally already been produced.

It's the same batch the brewery intended to sell through another route.

The lower price arises because the route to market has changed, not because somebody removed half the hops.

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Quality

Is Discounted Craft Beer Lower Quality?

Sometimes an older beer can be less fresh than it was when first packaged.

Hop aroma can fade.

Oxidation can develop.

Storage can matter.

But that is different from saying all discounted craft beer is lower quality.

The reason for the discount could be completely unrelated to age.

Read: is discounted craft beer lower quality?

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Why Not Sell It Direct?

Why Don't Breweries Just Sell the Beer Cheaply Themselves?

Sometimes they do.

Breweries may run clearance sections, taproom deals, mixed cases or short-dated offers.

But there are several reasons another route may make more sense.

They may not want to undermine their normal price

If customers constantly see a core beer reduced from £5 to £2, they may become reluctant to pay £5 again.

They may not have enough customers to move the quantity

Selling 2,000 discounted cans individually still requires thousands of cans to find new homes.

Fulfilment costs money

Picking, packing and dispatching hundreds of small orders takes staff time and resources.

The brewery may simply want the stock gone quickly

Selling a pallet to one buyer can be far simpler than finding hundreds of individual customers.

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The LowCostBeer Model

How Does LowCostBeer Get Craft Beer So Cheaply?

Our model is different from a conventional bottle shop.

We work directly with independent breweries and buy stock that needs another route to market.

That can include:

• Surplus beer
• Short-dated stock
• End-of-line beer
• Cancelled orders
• Seasonal surplus
• Old-label stock
• Discontinued products
• Other suitable overstock

Because the brewery's priority may be moving a meaningful quantity quickly, we can sometimes buy that stock at a price significantly below the normal route to market.

We then pass much of that difference on.

That's why you'll regularly see independent craft beer on LowCostBeer for prices that look unusual compared with conventional retailers.

The lower price is the result of the buying model. It isn't our definition of the beer.

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Beyond Surplus

Not Everything LowCostBeer Sells Is Discounted Surplus

This distinction matters.

We don't only rescue beer.

LowCostBeer also orders beer directly from independent breweries through normal commercial arrangements.

Our Brewery Showcase Boxes are a good example.

Those beers are deliberately sourced to introduce customers to a particular brewery rather than bought because the stock needs rescuing.

Read: what is a Brewery Showcase Box?

Or browse the current Brewery Showcase range.

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Different Deals

Why Doesn't Every Beer Have the Same Discount?

Because every stock situation is different.

The price we can offer may depend on:

• How much beer is available
• Why the brewery needs to move it
• Remaining shelf life
• Beer style
• Original selling price
• Volume we're buying
• Transport
• Packaging format
• How quickly the brewery wants it collected

One brewery may have 20 cases.

Another may have several pallets.

The economics won't be identical.

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Value

Is a Bigger Discount Always a Better Deal?

Not necessarily.

Price matters, but value also depends on what you actually want to drink.

A £1.50 smoked imperial sour isn't much of a bargain if you hate smoked imperial sours.

One advantage of surplus craft beer is that lower prices make experimentation less expensive.

You can try:

• A new brewery
• A different style
• A stronger beer
• Something you might not normally risk at £6 a can

That discovery aspect is one of the things we enjoy most about the model.

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Reducing Waste

Why Discounts Can Help Reduce Beer Waste

Once a beer has already been brewed, a significant amount has gone into producing it.

That includes:

• Water
• Malt
• Hops
• Energy
• Packaging
• Transport
• Labour

If the finished beer is ultimately written off, those resources don't get another use.

Discounting isn't a perfect answer to every sustainability challenge in brewing.

But it can give existing stock a better chance of reaching someone who will actually drink it.

Read our original article: Why We Rescue Beer Instead of Letting It Go to Waste

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In Summary

Why Is Some Craft Beer Heavily Discounted? The Short Answer

Common reasons include:

• Surplus production
• Cancelled orders
• Approaching BBEs
• Seasonal stock
• Packaging changes
• Discontinued products
• Warehouse pressure
• Cash tied up in inventory

When a brewery needs to move stock quickly, accepting a lower price can make more sense than holding out for its normal margin.

That creates an opportunity for LowCostBeer to buy independent beer at a reduced cost and pass the saving on.

So when you see a craft beer reduced dramatically, asking:

“Why is this beer cheaper?”

is often much more useful than assuming:

“What's wrong with it?”