Why beer = increased consumer choice...

It's great when an article combines two of my favorite subjects - economics and the beer industry. Via the economist free exchange blog comes this NY Times article by the brewmaster of Brooklyn Brewery about how he's not worried about the prospect of a merger between Coors and Miller, since the focus today is on microbrews.

The article, and especially the Economist's commentary on it, focuses on the idea of increased consumer choice. Thanks to a focus on catering to individual tastes, as well as the fact that technology and transportation has made it easier to produce and distribute smaller batches of more varieties of products, small breweries and other small producers of food products are thriving, despite the size of many large food conglomerates, who aren't doing as well.

I touched on the idea of increased consumer choice, and the pondering if we had too much of it, in this post a while back. But the other thing that occurs to me is that there are probably some spillover effects to increasing consumer choice. When the idea of too many choices comes up, it usually deals with things like line extensions - you can now get Coke in regular, diet, zero, plus, cherry, lime, lemon, vanilla, and a number of combinations of those, like cherry zero. But increased choice can also mean increased competition, not just cannibalization within a brand, but also between large companies and smaller upstarts - like Bud and MillerCoors being challanged by Yuengling and Brooklyn and Clipper City and hundreds of other breweries -or Coke being challanged by Jones Soda. Not only do the people who are passionate about beer have more choices, but those who don't still probably benefit, because increased competition probably means better pricing, and that producers will probably care more about things like quality control, because there are lots of other choices.

It also means that companies start to produce products that are somewhere in-between the two extemes - products from the big guys that are almost as good as the artisinal products, but cheaper and with increased distribution. Oliver's NYT article talks about the death of white bread - and when I go to the store now, I can choose not only between the normal whites and the organic stone ground in someone's backyard breads, but, say, Weis (a local grocery store chain) 12-grain bread, that's tasty and cheap. When I used to drink a lot of beer, one of my staples was Michelob Amber Bock, a pretty decent dark beer from the makers of Budweiser and Busch.

As it gets easier for people to up and start a company, and get product out there, it means consumers have more choices - and that's a good thing for everyone - including the big guys, if they make the right moves.