INTERPRETING THE SUCCESS OF VAN ICE

MY FELLOW AMERICANS,

Welcome to yet another post. And while you may be absolutely hankering for a new historical post, you’ll have to wait another week - when did barrels for beer stop being pitch-lined? We’ll both know soon enough. But for now, I thought it’d be interesting to pop the hood on the MacLeod van, and analyze Van Ice’s success as a beer.

THE PRINCE OF BEER

Right off the bat, it’s worth stating that Van Ice is the good stuff, namely, well-made lager á la américaine. For reference, it’s usually somewhere between our 3rd and 5th best seller (the numbers are murky recently for obvious reasons, and because I count cans separately, meaning the low draft sales are fictitious in a sense…Covid beer math is complicated), and it performs that well very consistently - it is one of the steadiest selling beers, which is a beer planning dream, and I think this is mostly due to its quality.

Compared to what, you ask? Compared, in my mind and to the broader audience, we’ll soon see, to beers like Budweiser and Miller, aka the classics. Those beers, the real shit, are clearly excellent (I’m an absolute sucker for Miller Lite), or at least, we can probably agree, meticulously brewed, but perhaps not the most flavorful or interesting.

That’s where we come in - by splurging a bit on ingredients, brewing with care (Van Ice is the lager that we keep in tanks the longest, by, oh, two to three weeks), and most importantly, by serving it pretty fresh (so, a few months - way under a year), we have a product that is reminiscent of that incredible beer, but just a tinge better and more interesting.

BUT

There’s also this other factor. Remember that Econ lecture? Yeah, me neither. But I mentioned, in that post, that during WWII, a number of Brits were turning from beer to whiskey (gasp!) due to the high price of the former, and that there’s a nice economics term for that: Cross Price Elasticity of Demand, or CPED. 

Here’s the gist: Imagine you’re at the grocery store. You have a shopping list of stuff you’d like, but you’re a flexible cook, so if you were planning on buying hot dogs, but the price has doubled, you’ll: a) probably not buy the hot dogs, or the buns (just as importantly), and; b) buy something instead, like hamburger patties. 

CPED is a quantitative measurement of this change in demand for product B, hamburgers, when the price of product A, hot dogs, goes up. And it’s super useful and general - if the price of houses goes up, you might rent; if the price of rum goes down, you might buy more limes. So it’s natural to ask: is there a connection between the price of craft beer and demand for wine, whiskey, or Miller?

It turns out that the answer is probably not so much. Interestingly, American Light Lager seems like a distinct product from IPAs and Northern Brown Ales, which is to you perhaps obvious - if the price of IPAs jumps to $10 per bottle, I’m guessing you’d switch to wine, or homebrewed beer, or a nice whiskey over a 30 rack of PBR.

What I’m driving at is that as MacLeod has expanded from beer geeks to the general populace, Van Ice has acted economically like a single whiskey option, say, and you’re guaranteed to sell a decent amount of whiskey even in a beer shack if you get enough people in the door (sources: 1, 2).

But I should mention that if the beer weren’t great, competitive in quality with the commercial examples, this wouldn’t matter, but I do suspect this is the reason for the magnitude of its success.

CONCLUSION

The game of brewing beer at home is wonderful - you can brew whatever you want, and while it may not be insanely great, you can have a Brett Porter, a Czech open-fermented Dark Lager, and a 19th century all-Fuggles IPA on tap all year round if you want (and clearly, I’d love that). A brewery, however, is beholden, as discussed in the last post, to economic forces to a large degree, and while we love Van Ice and think it’s equal parts hilarious and great (if you don’t live here, MacLeod is based in Van Nuys…get it?), I doubt anyone here thought it’d be a permanent tap and can slot forever, but hey, that’s the whole pitch about the free market - you vote with your dollar, and we’re beholden to the invisible, ever-wise, beer-clutching hand.

Cheers,

Adrian “Miller Man” Febre