Beer Prices To Soar Due To ‘Off The Charts’ Inflation

, Beer Prices To Soar Due To ‘Off The Charts’ Inflation

(Courtesy Emiel Molenaar / Unsplash)

This warning came from Heineken but inflation and supply chain issues are impacting everybody including craft brewers…

Here’s the deal…

On February 16 Heineken revealed its 2021 results and although sales were up 11.3% and beer volume increased 4.6% over the year, it was the company’s concerns going forward that got our attention.

The Amsterdam-based global brewer said beer prices will go up as it faces “crazy increases” in the cost of ingredients, energy and transportation.

Citing inflation that was “off the charts” and overall costs it expects to would increase by about 15%, Heineken explained that it would be forced to charge more for its beer, an action which could potentially lead to lower beer consumption.

, Beer Prices To Soar Due To ‘Off The Charts’ InflationHeineken CEO Dolf van den Brink, told the Financial Times: “In my 24 years in the business I’ve never seen anything like it, not even close. Across the board we are faced with crazy increases. There’s no model that can handle this kind of inflation. It’s kind of off the charts.”

“It is impossible to predict if consumers will stomach further price rises as behavior models break down, Dolf van den Brink added.

Dolf van den Brink said the company’s speed of recovery from the pandemic remained uncertain and given that Covid-19 was expected to continue affecting trade, he was unable to be more specific regarding future price increases.

Heineken, whose brands also include Amstel, Tiger and Moretti joins other brewing majors such as Carlsberg in sounding the alarm over inflationary pressures, which threaten the beer industry’s recovery.

In the UK, beer sales rose by about 5%, driven by Heineken’s premium Birra Moretti and Desperados brands. Low and non-alcoholic drink sales increased by more than 30% in 2021 led by the continued success of Heineken 0.0.

But what Heineken is experiencing isn’t an isolated circumstance. The pandemic has led to worldwide supply chain issues and large and small brewers around the world large are only beginning to feel their reverberations.

Inflation is at a 40 year high and that number is only expected to go higher. Aluminum can shortages continue placing an additional burden on small independent craft brewers, businesses with already tight profit margins.

So whether you’re drinking a Heineken from the second largest brewer in the world or a hoppy small-batch IPA from your favorite craft brewery, know that you may be paying more very soon.

Possibly a lot more…


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