Thursday, November 15, 2007

Beer: Craft Beer vs. Fine Wine Price

For fun, I thought I'd work through a quick little calculation to compare the cost of the alcohol content in fine wine vs. craft beer. Yes, I'm a geeky engineer. First, the contestants:
  • For beer, I decided to go with a 6-pack price of $10. That's probably a hair above craft beer average, but it's a nice neat number to work with. For alcohol content, most craft beer ranges from 5-10%, so let's split the difference and go with 7.5%.
  • Wine price is a little trickier, as the range is much larger. I'm going to abitrarily go with a $15 bottle. Fine wine is generally about 12-14%, so let's split the difference again and go with 13%.

Beer Calculations:

  • 6 * 12 oz. bottles = 72 oz.
  • 72 oz. * 7.5% = 5.4 oz. alc.
  • $10 / 5.4 oz alc. = $1.85/oz. alc.

Wine Calculations

  • 750ml bottle = 25.36 oz.
  • 25.36 oz. * 13% = 3.3 oz. alc.
  • $15 / 3.3 oz. alc. = $4.55/oz. alc.

Interesting: the alcohol in fine wine costs almost 2.5 times the alcohol in craft beer.

For even more fun, I researched the most expensive bottles of beer and wine ever sold to see how they compare. This article says the most expensive beer ever sold is called Tutankhamun Ale -- an ale brewed based on archeological evidence at an excavation site -- the first bottle of which sold for $7,686. Unfortunately, I can't find information about the alcohol content of the beer or size of the bottle, which makes calculations difficult. Since this is all for fun, let's assume 12oz at a generous 10% abv.

The most expensive wine ever sold was a Chateau Lafite 1787 Bordeaux that went for $160,000 at auction. Again, who knows the exact volume or alcohol content, but let's assume 750ml (25.36 oz.) at a generous 15% abv.

Tutankhamun Ale Calculations:

  • 12 oz. * 10% = 1.2 oz. alc.
  • $7,686 / 1.2 oz. alc. = $6,405/oz. alc.

Chateau Lafite 1787 Bordeaux Calculations:

  • 25.36 oz. * 15% = 3.8 oz. alc.
  • $160,000 / 3.8 oz. alc. = $42,105/oz. alc.
The uber-comparison makes the difference even greater, with wine over 6.5 times as expensive as the beer. Hope you enjoyed this comparison!


Matt said...

Very interesting. Why do you think this is the way that it is? Perception or actually more expensive to produce? There are so many variants there it would be tough to answer since you can't really compare apples to apples on this one.

CorrND said...

I'd guess it's actually more expensive to produce wine, though I can't say for sure because I don't know enough about beer production costs.

David Coffaro is a winery out in Sonoma and their webpage has a humorous article about how a winery could actually produce a $100 bottle of wine. Read the article if you're interested, but the second set of numbers in the left-hand side bar shows the actual cost to Coffaro to produce a wine:

$10 in production costs, though that's for a winery making bottles that average about $26. Still, wine production costs have to be higher than beer production.

Do you know of anybody that has posted real-world craft beer production costs?

If you're curious about wine production at all, David Coffaro is a very open wine maker that has a running diary about the process (we'd call it a blog, but the diary is old enough that 'blog' didn't exist when it was started). Tons of interesting tidbits in there.

Luke A. Burke said...

What Chris doesn't tell you is that this is a calculation he used to do back in his collegiate days when Franzia always won. Glad to see you've moved up in the world. There were actually a few of these Tutankhamens auctioned off in Indy about a decade ago.

Anonymous said...

I thought this was a great, fun little post. Please don't take this as me criticizing the set-up b/c it was clearly just a fun thing. One of the big things that makes wine so much more expensive is production time.

I am a home-brewer and avid student of both beer and wine. A good craft beer takes only about 2-3 months to go from the beginning of the brew to the shelves of your liquor store. Whereas, a good bottle of wine, that will cost about $15, will take about 1 year. That is why you can't buy 2007 vintage until 2008.

You should try to factor in production time b/c i think that your calculations will even out then.

CorrND said...

Hahahaha, Franzia Chillable Red vs. cubes of Old Style/High Life/Beast (whatever was cheapest). Life certainly is better on the other side...and beer wins now!

Thanks for stopping by Luke!

CorrND said...

Excellent point indyindie. Though, I'd say that your point is the perfect explanation for the price discrepancy as opposed to something that needs to be factored into the calculation.

Another explanation point is simple supply and demand: wine-quality grape production is naturally limited because ideal growing environments are scarce. The same can't be said for barley and hops, though artificial factors are constraining supply and driving prices up (e.g. farmers switching from hops to corn for ethanol production).

We need some real numbers to go with beer production. Maybe I'll drop a line to Charlie over at the new Brugge Blog and see if he can give us some insight into their production costs.