Sunday, March 1, 2009

Kid Rock Beer

A couple of weeks ago I noticed in one of the trade newsletters I get a link to an article in the Detroit Free Press about the deal made between a brewery in Michigan and Kid Rock to produce a Kid Rock “craft” beer.

Since this announcement, there has been a fair amount of commentary on the merits of this project, pro and con, but that's not what interested me. Novelty products have a long history in the beer business. Some are clever, some witless and exploitative, and others downright tasteless. Here are some of my favorites:

And who could forget the immortal Nude Beer, which made its appearance in the late eighties. For a brief time I was the proud owner of a complete set of mint-condition labels that I had
received from a friend of mine who was doing a contract brew at the Lion in Wilkes-Barre. I had them pinned to the bulletin board in my brewery in Northampton until a vandal saw fit to “disrobe” them by removing their scratch-ticket brassieres when I wasn't around. Without their silvery garb, the women on the labels just looked kind of sad and embarrassed, so I took them down and they've been lost to time. But I digress...

I'll leave it to others to figure out where Kid Rock's entry fits into the novelty beer pantheon. Being numbers-obsessed, what caught my eye about the article was the math. Somehow, the numbers didn’t add up.

According to the article, Michigan Brewing makes 100,000 barrels and employs eight people to do it. Last year Smuttynose produced one fifth of that - 20,000 barrels - and employed twenty-two people. Wow. I thought we worked pretty hard, but we must be incredibly lazy and inefficient here in New Hampshire.

Strangely, that efficiency evidently goes by the wayside when it comes to Mr. Rock's new beer. Anticipated annual production of 100,000 cases - about 7,250 barrels - will create 161 new jobs at the brewery, according to the article. So, let's recap: currently, the brewery produces 100,000 barrels with eight employees, or 12,500 barrels per employee. Kid Rock's 7,250 barrels of beer will require 161 new employees - that’s one employee for each 45 barrels of production. This must be one special beer!

Let's drill down a little farther. Say that new employee makes a modest ten bucks an hour and works a forty hour week. That's $20,800 a year. Toss in employer tax contributions and minimal benefits, and you’re up to $24,000 a year. The 45 barrels of Kid Rock beer that this employee is going to produce translates into 620 cases. Divide that into $24,000 and you get a labor cost of $38 a case. Add in cost of goods and operating expenses, plus state and federal taxes as well as wholesaler & retailers markups, and you've got one expensive beer!

I know Mr. Rock has got some loyal fans, but they are going to be sorely put to the test.

I'm thinking that the reporter who wrote this piece must have misplaced a few decimal points or couldn’t decipher his interview notes when he got back to the office. If not, Kid Rock’s novelty beer may take the prize as the world's most expensive beer, probably not what they had in mind.



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