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TheStreet Open House

Costly 12-Packs and Long Lines Don't Help Craft Beer

Stocks in this article: BUDTAPSTZBREWSAM

PORTLAND, Ore. (TheStreet) -- Limited-release beer is the crown jewel of craft beer, but it's weighing heavily on smaller brewers in recent months.

This year, Chico, Calif.-based Sierra Nevada assembled its Beer Camp Across America mixed pack by going around the country and collaborating with a dozen different brewers to create 12-pack of beers to celebrate the opening of their new brewery in Mills River, N.C., in August. Sierra Nevada is on a seven-city tour to promote both the brewery and the 12-pack, which got some help from Colorado/North Carolina-based Oskar Blues, Pennsylvania's Victory, Wisconsin's New Glarus, Oregon's Ninkasi, Maine's Allagash, Michigan's Bell's, Indiana's 3 Floyds, Florida's Cigar City and California's Russian River, Ballast Point and Firestone Walker. The cost? About $25 to $30, according to both Sierra Nevada and our own experience at local bottle shops.

Considering that Sierra Nevada Pale Ale 12 Packs and the brewery's 4 Way IPA Variety 12-Pack typically sell for between $13 and $14 a pop, Sierra Nevada's Band Camp Across America pack nearly doubles that price. Given the logistics of working with these various brewers, bottling and canning each beer separately, making enough to sell without diminishing overall production capacity and assembling a six pack that includes two cans from Cigar City and Oskar Blues (with spacers), there's a lot more work behind that price than the simple 12-pack box lets on.

Read More: What You're Really Paying For That Beer

It's something that beer geeks will jump at -- and something they'll spend $65 in admissions fees to get their hands on during Sierra Nevada-sponsored festivals in Philadelphia and Mills River this weekend -- but it's also a lot of overhead and effort aimed at a small audience during a time when Sierra Nevada is only getting bigger. The brewery produced 985,000 barrels last year and may top 1 million this year -- joining only Samuel Adams producer Boston Beer Company (at more than 3 million barrels) and Pottsville, Pa.-based D.G. Yuengling & Sons as the only U.S.-based brewers to cross that threshold.

While it's tough to argue with Sierra Nevada and craft beer's recent success, there's suddenly something counterintuitive about producing the high-priced, high-margin, limited-quantity special releases that once served as craft beer's best world-of-mouth advertising.

Read More: Glass Half Empty? The Great Craft Beer Selloff

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