Beeronomics: Doing it Yourself and Growing Your Own

Over a year ago I mused about whether brewing your own beer was a cost saving strategy and concluded that at the scale of a part-time homebrewer the answer was no.  A big part of the cost of ingredients (inputs in econospeak) was the cost of hops (which were particularly high at the time).  But hops are practically a weed man, thought I, what if I grow my own?   So I did, or am about to, to be precise.  For $4.50 I bought a rhizome, a scrounged about for some unused pieces of wood to build a makeshift support for the vine and voila - hops!!  I hope.  

What to grow caused me to ponder - but not for too long.  I really wanted to grow two varieties (and in fact bought two rhizomes) but the wife convinced me that given our wee garden and my inexperience with gigantic hop vines, I had better just start with one.   I chose Cascade - I mean was there really a choice: high yielding, wonderfully versatile with a lovely citrusy-floral bouquet?  No.  Willamette was the other rhizome I bought (anyone want it?), I thought it would be a good complement but alas, next summer.

Finding space was a challenge and of course a good economist thinks about opportunity cost, so... out went the sage!  Opportunity cost of just about zero, right?  Apparently my wife was not so sure, but what's done is done and I am sure she will stop being mad at me once she tastes the beer that will result - and between now and then is only 6 or 7 months...

Nevertheless, your intrepid beeronomist jury-rigged a hop support and prayed that he would still have a fence come winter. Besides, I kept them out of the veggie beds which my wife controls (and hasn't gotten around to weeding yet) so I am on pretty firm ground here.  If only she were a beer lover...

So at about $2 an ounce, Cascade hops at Steinbarts are not cheap.  I think I can get at least a pound (though I have been told not to expect too much the first season).   But for a beer with a 8oz hop bill we are talking $16 saved...wow!  Okay, best we not think in terms of pure monetary reward.  The real reward comes in being a yeoman farmer (that is a way inside economics joke, by the way, for you macro-types - here's to you Bruce!) close to the earth and self-sufficient.

Unfortunately (or happily) it is now time to brew again and to gear up for the spring unveiling of my ultra special Hopopotamus® will require no less than three varieties of hop (and maybe even four) - so off to Steinbarts I shall go.  But I shall dream of Emerson's Special Wet Hop Ale come the early fall.

Beeronomics Update: Doing it Yourself

A while ago I blogged about whether homebrewing was a cost minimizing strategy for the craft brew lover in these tight times.  In that post, I expressed doubt about the whole endeavor, suggesting that only for those who really enjoy the process would this be a worthwhile strategy.  

The final reckoning is upon us.  I got a total of 25 22oz bottles for a price of about $60.   Thus the cost is about $2.40 per bottle, a considerable savings over the $3.50 or so that a normal 22oz bottle costs.  Of course, a good economist includes opportunity cost and it does take a lot of time and effort to do this.  So, let's say about a dollar a bottle, which makes this about a break even endeavor.  

But my main objection was the assertion that the resulting beer was sure to disappoint.  A long history of homebrewing years ago taught me that.  But lo and behold, the final product this time is fantastic!  This is the first beer that I actually really and thoroughly enjoy just for the beer (and not for the fact that I made it).  In fact it is so good, that I would choose it over many of the beers I regularly buy in the store.   Part of this is, no doubt, due to my good friend who has tons of experience who guided me carefully through the recipe and the execution.  Nevertheless, I now consider the whole effort a tremendous success.  Save a few pennies and have 25 bottle of great beer to show for it.  Not bad. 

Cheers! 

Beeronomics: In Hard Times, Doing it Yourself

It has been years since I brewed my own beer, but recently my son asked me the question I have been waiting a long time to hear: "how do you make beer?" "Well son," says I, "I'll show you." So off we set to FH Steinbart to load up on supplies.

[I had in mind something modeled on Ninkasi's Total Domination, which without a doubt is the best beer brewed in Oregon and possibly the country. On this I am sure there will be no debate. And by the way has Ninkasi, in a short time, become the best Oregon brewery? I think it might. Kudos to Jamie Floyd.]

Anyway Steinbarts on Saturday was absolutely crammed with people buying supplies. Unfortunately I was after Centennial, Cascade and Chinook hops to make a classic 'Three C' IPA but the Chinooks were gone. Thoughts of substituting Willamette, Newport and Zeus were also dashed, so I decided to pitch a curveball: up the hops (to compensate for the lost alpha acids) and use Mt. Ranier instead. I'll let you know how it turns out. But the point is that this economic naturalist started to wonder whether, as incomes get strained, people start to make their won rather than buy it in the bottle. Does it make sense to do this in tight economic times? 

Let's do some back-0f-the-envelope calculations. To get all the ingredients for my beer, plus a few sacks for the grain and hops but basically nothing else (including bottles and caps) I spent about $65. Blame the hops which are not only scarce but expensive. I had some leftover ingredients and I have all the other equipment from before so we will consider it a sunk cost and ignore it. So let's say $60 for the ingredients. From this I make a five gallon batch and I will probably yield about 4.5 gallons after ditching the sediment - maybe less because I dry-hopped - and then some spillage due to inevitable personal blundering, so let's say 4 gallons at the end or about 7 six-packs or 23 22oz bottles.  

A six pack of good beer is about $7-$8 in my local supermarket.  So the retail cost of this beer is about $50.  If I manage something sublime perhaps I can compare to Total Domination which costs about $3.30 for a 22oz bottle, so my beer would retail for about $75.  

On a broad scale then, the cost of the ingredients are about equivalent to the retail price of the finished product.  Include the opportunity cost of my time, the certainty that my beer will fall far short of Ninkasi's and the extremely high probability that I will have managed to acquire an unwelcome bacteria that gives my beer an off flavor, and it seems clear that brewing your own is NOT a way to save money.  

The crowd at Steinbarts could still be an indication of a bad economy: many people with unwanted time on their hands might turn to brewing which is a nice hobby and also has the appealing aspect of providing a large amount of alcohol at the end.  

This calculation is, by the way, why I have largely stopped brewing: for about as much money as brewing my own I can get super-fantastic beer in many varieties and I don't have to wait for it.