Archive for November, 2011

The Value of Darkness, The Value of Surly Nation

Saturday, November 5th, 2011

It’s been a crazy couple of days since Darkness hit liquor stores, and there’s been a lot of back and forth about the differing pricing of Darkness. We’ve learned about some stores selling it in excess of $35 per bottle while others sell it for under $20 per bottle. It’s created a bit of a tempest in a bottle, and there’s been questions about who or what drives retail pricing and purchasing policy (limiting one bottle per customer, for example) and overall production of our Russian Imperial Stout. Here’s a little background: The first year we bottled Darkness was in 2007, and we sold 500 of them. Every year we’ve increased production as best we could to keep up with demand and in 2011 we sold close to 18,000 bottles – both during our Darkness Day event and via liquor stores. Even with brewing close to 20,000 bottles just four years after brewing our first, demand still outweighs production. Yet, when Darkness is sold during Darkness Day it sells for $18. In the last three years that price has gone up exactly $1.

By law, Surly can’t set prices at retail. In other words, bars and liquor stores are free to set prices at whatever level they see fit. Darkness is an allocated product, as all of our beers are. That means, there is not enough beer to meet the demand so we have to determine stores and quantities with that in mind. When we determine our allocation, we take into account a number of factors. That includes the sales volume but is also includes the relationship with Surly and therefore our consumers.

We are well aware that the prices of some of our beers end up selling at retail below what they could fetch at market prices. We believe the long-term relationship we have with our consumer is most important. That’s what built Surly. That’s what built Surly Nation. Yes, we could make a few extra bucks if we raised the price every year or went after a certain target, but at what long-term price (no pun intended)? We believe that would be at the expense of our relationship with our consumer, and many of our liquor stores share that same vision. The consumer relationship is much too valuable. It’s invaluable, really.

Ultimately, it’s the consumers who will drive the market and dictate what is bought and sold. Literally. They have built Surly and more than anything we value our relationship with them—that’s why we throw big and small parties—so we can celebrate over a beer and connect with our consumers. It’s good all of this has been brought to our attention and it has been an interesting discussion over the past few days. What you can do is demand better and help each other out—share tips on finding our beer and tout those stores who value the long-term relationship.

Now, go get Surly!