Why is cask cheaper than keg?
It should be so simple: brewery costs up price of producing a beer, adds its margin, then sells it. Businesses need to make margins to survive, so as a continuation we might assume a chain pub in Farringdon, would have more overheads than a community pub in Carshalton, and as a result of this, the same beer bought at the same trade price could imaginably vary.
The price we pay for a beer, isn’t necessarily a reflection on the production cost or margin made. Our perception of a product’s value is often directly influenced by its price, something that is often disconnected from its true cost.
If only it was so simple to see why prices varied, and there was no logical historical explanation we could manipulate to explain the price differences.
Take a step back, and think; where can independent breweries sell their beer?
For cask, it helps to go back decades. There was a time when pubs were tied and you were limited to drinking the beer of the region. Then the monopolies commission came along and decided this was unfair. Goodbye large tied estates, hello pubcos. Forget reading blogs, if you’re keen, there are entire books covering this in detail. Back to our tied pub, the result was they had to offer a beer from another brewery. These were generally taken by the micro-breweries and they would need to compete on price to get this rotating spot.
Snap back to present and the market hasn’t moved on. Cask is still sold low, in an ultra competitive market, and the new emerging “craft” keg sector is setting its own rules on price. There isn’t much difference in the cost of making cask or keg, but one is sold as a commodity, the other as a premium product.
So there you have it, cask is cheaper than keg because the market is warped, or is it?
Cask and keg beer are arguably similarly the same cost to produce. The cost of dispense doesn’t explain the difference in price. Plus serving keg beer requires no skill, whereas cellarmanship training and expertise adds extra cost to cask. The fundamental difference I believe actually comes down to Shelf Life, or in this case “Cellar Life”.
For the last two years I’ve enjoyed attending Siren Craft Brew’s, Maiden launch. If you were paying attention early, the two pubs I was alluding to were The Hope and Craft Beer Co, both have been venues for this event. This year there was a tap takeover at Craft and three of the beers were both on cask and keg; Undercurrent, Sound Wave and Ryesing Tides, and for each, the price was cheaper for cask. There was also a surprise that Maiden 2016 wasn’t on cask, quite possibly because there wasn’t any?
When we talk about cask beer, it’s typically a 9 gallon Firkin, or about 68 pints after losses. Once a cask is tapped and put on the bar, it has a shelf life of 3-4 days. Kegs can last weeks, to months once tapped and still taste great. Cask beer becomes noticeably different with each day it sits in the cellar, especially for lighter, hoppier pales, as the effects of oxidation take hold. Even an 11.2% barrel aged blended Barley Wine isn’t going to be in top form after a week on cask.
So, if you want to make sure you sell something quickly, as is necessary with cask beer, you need to price it accordingly. If a cask beer doesn’t sell quick enough, then your margin will go down as you make less money. For keg beer, the assurance of a longer shelf life almost guarantees you will be able to maximise your profit. Sceptically, one could assume that because of this, keg can also be, and is priced higher.
It’s time we realised that cask and keg can both be premium products. Interestingly the 11% Bourbon Milkshake on keg was the first Siren beer to be finished. At £4.25 a third it seems expensive, but you now know that with kegs it’s quite likely that this wasn’t an inflated hype price on behalf of Craft, but the price they needed to charge to make their margin on Siren’s trade price.
The insight into the blend from Siren’s blog and the single barrel Maiden’s were the highlight of the event for me this year. It was fascinating to see how the Rum, Red Wine, and Tequila individually influenced the Maiden’s aroma and flavour. They were also a perfect example of why some beers should be in keg, and why some keg beers just seem so out of touch of price with anything similar in cask.
Siren have achieved a lot and been a really positive influence to the British craft brewing scene and myself. There’s more of that to come on a blog I’m working on that focuses more on brewing than giving insight to industry.