USA: Beer prices up by ‘much higher than normal’ average of 7% in last 13 weeks of 2022
Inflation may finally be hitting a staple long been considered recession-proof: beer, USA TODAY reported on January 10.
During the last 13 weeks of 2022, beer prices at retail (not including bars and restaurants) rose a "much higher than normal" average of 7%, according to Bump Williams Consulting of Shelton, Connecticut, which services the alcoholic beverage industry, and uses Nielsen data. Some beers including those such as Bud Light, Miller Lite, Yuengling Lager and Coors Light saw prices rise even higher – by 10% – the data suggests.
During that time period, there was also a decline in volume of beer sold. Domestic super-premium beers such as Michelob Ultra saw sales rise 0.8% throughout the year, but fell off 2.3% in the four weeks leading up to Christmas, according to Bump Williams Consulting. Similarly, sales of imported beers such as Corona and Heineken rose 4.2% in 2022, but dipped 0.5% in December.
That suggests beer shoppers may have opted to buy less beer – a six-pack or 12-pack instead of something larger – or maybe bought a cheaper brand.
For instance, lower-priced "below premium" beers such as Budweiser and Miller High, malt liquor and single-serve beers (16-ounce, 19.2-ounce and other tallboys) saw gains in December, said Dave Williams, vice president of analytics and insight for Bump Williams Consulting.
"Sooner or later everyone hits a breaking point when it comes to their price sensitivity and are going to alter" their behavior by spending less or shopping less often, he told USA TODAY.
Inflation has afflicted beer makers with the increased cost of ingredients and shipping, just as consumers have been hit with higher gas and grocery prices.
So, beer producers have raised prices. The price of beer purchased to drink at home had risen about 7.7% as of November 2022, compared to November 2021, according to the Labor Department’s consumer price index. That's higher than whiskey (1.7%), wine (3%), and other spirits (1.7%).
But during the month of November 2022 alone, beer prices rose 1.3%, higher than the price of overall groceries (0.5%). Egg prices – up 2.3% – still outpaced beer, however.
While overall inflation appeared to be coming down as the year ended, it was "less so in beer," noted Bart Watson, chief economist for the Brewers Association, in a tweet.
Also rising: the price of beer away from home, up 6.6% for the year and 0.1% for the month of November, according to the index.
Constellation Brands, which makes Corona and Modelo beers and other alcoholic beverages, said it plans to temper its increased prices after hikes in October slowed sales, The Wall Street Journal reported Friday. “The consumer is overly sensitive to pricing actions,” it quoted Constellation CEO Bill Newlands saying. “We need to be careful in balancing our growth profile and our pricing profile.”
For now, higher prices are making up for consumers buying slightly less beer. Sales are up about 2%, in dollar value, over the last year, Williams said.
"Dollars are up, that’s good," he told USA TODAY. "But how long can that maintain if volume continues to slip and slide."
The beginning of the year is typically a "soft season" for beer sales, Williams said. "2023 will be interesting to monitor as this phenomenon continues to play out."
"I am not suggesting that people will stop consuming beverage alcohol entirely, but there are certainly different decisions being considered today than there may have been at this point last year or (in) the years prior."
11 January, 2023
