Beer Prices Are On The Rise And Consumers Are Buying Less of It

Beer sales have long been a gauge of the economy. It takes a lot for beer lovers to abandon their brews.

But now with inflation near a 40 year high and the cost of brewing a beer (raw materials, shipping cost, etc.) on the rise, breweries are being forced to raise the prices of their products and increasingly consumers are buying less beer.

In spite of concerns over an economy plagued with supply chain disruptions and rising personnel costs, beer had appeared to be amazingly “recession-resistant” post-pandemic, but now that might be changing.

The average price of beer in the United States rose nearly 8% from November 2021 to November 2022, according to Moody’s. And during the last 13 weeks of 2022, beer prices at retail rose “much higher than normal,” according to Bump Williams Consulting, an alcohol industry analytics company in Shelton, Connecticut.

Using Nielsen data the beverage firm reported that several major beer names including Bud Light, Miller Lite, Yuengling Lager and Coors Light saw prices rise by 10%.

During that same time period, there was also a decline in volume of beer sold.

Super-premium beers such as Michelob Ultra, which had seen its sales rise 0.8% throughout the year, fell 2.3% in the four weeks leading up to Christmas, historically a highly profitable period for beer. “Similarly, sales of imported beers such as Corona and Heineken rose 4.2% in 2022, but dipped 0.5% in December,” according to USA Today.

Molson Coors, on the other hand, has been suggesting that they weren’t sure about the impact their recently raised beer prices was having on the consumer, but remained cautious.

“It’s obviously too soon to be able to give complete reassurance that the price increase has landed well and not changed consumers’ behavior because we’re still learning, and we’ll see what unfolds over the next few months,” Molson Coors CEO Gavin Hattersley said at a Morgan Stanley investor conference in early December.

Molson Coors, home to Miller Lite and Coors Light, upped its wholesale prices 5% in the spring of 2021 and another 5% in the fall. And retailors are adding to the overall retail price of beer at their end as well to compensate for rising employee and location costs.

One thing’s for sure, beer prices aren’t going down anytime soon. So fasten your seat belts beer fans, because 2023 is already shaping up to be a rocky year.

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