The article title kind of conflates costly production with high price- the only place those two interact is that it’s not profitable to price things below cost.
But it’s pricey because people are willing to pay that much for it, not because there’s something inherent about it.
Where you stand depends on where you sit.
I’m not much of a drinker of alcohol, but I do think that the storage of spirits can have an effect on price and taste. While white oak is typically the standard, there are more specialty woods that can be used, not to mention reusing old wine barrels. And it hasn’t seemed like there are a whole lot of coopers around these days, and it seems like that it’s still done by hand for a good deal.
Now sodas and juice is now generally just in cheap easy to make plastic, which is also less weight to transport than alcohols that are via glass containers. And since sodas are just from a syrup or mixture made nearer the bottled even less costs.
Plus sodas are targeted for mass appeal. The number of people who don’t regularly consume some soda is probably smaller than the number who consume pricy alcohol regularly.
The podcast Gastropod, has had episodes about barrels, soda and glass bottles, and also about the rise and fall of bottled water. Among many other food science topics.
The high end bourbon business has exploded over the past 3-4 years. COVID definitely helped with the price increases. However, much of the desired brands and their high prices are a result of self imposed supply constraints to drive the price up.
It’s not unheard of for a distillery or a blender, to just announce a small batch run of certain brands, say 4 barrels (about 1,000 bottles) and sell them for $200 a bottle…$200k. They will sell out of those within a very short time. Then those same bottles will sell on secondary collector markets for $500 - $1,000 a bottle. Which in turn makes the distillery’s average brands/labels more attractive.
There’s no reason that the distiller or blender can’t just make 10,000 bottles from 40 barrels
from the rickhouse as opposed to 4. It’s a self created limited supply by the distiller.
Gross margins on goods vary, but honestly not that much in the scheme of things. The price of a manufactured good is almost always somewhere in the range of 1.5 to 4x the cost.
An alcohol brand with strong marketing and brand power might be able to sell a bottle for 4x what the ingredients/processing costs, but no one is selling their alcohol for 10x or 20x their input costs. And of course that marketing and brand power wasn’t free, either.
Sure. All I’m trying to say is that if one bottle of no-age-statement bourbon is priced at $12, and another is priced at $18, that doesn’t mean that there’s some underlying difference in production expense, ingredient quality or anything like that.
It literally just means that one manufacturer decided to put a $12 MSRP on one, and a different manufacturer put a $18 MSRP on the other. There’s no relationship between the price of something, and what it costs to make it, distribute it, etc…
I wouldn’t say no relationship. Especially regarding age. The longer it ages, the more evaporates and the more they have to charge to maintain their profit margins. 9 year old bourbon is going to retail for more than 2 year old bourbon for that fact alone, no matter the quality. Is it the only factor? Of course not. But it can’t be discounted as immaterial.
This is the part I was responding to and it’s totally wrong. There’s a strong relationship between cost and price. It’s not linear. Like you can’t take the input costs and multiply by 1.73 and get the exact retail price. No one’s selling no-name bourbon for $1000 or $2 and the narrow range that it does get priced at is strongly influenced by the cost of inputs.