Beer isn’t as cheap as it used to be.
Americans are drinking less beer and the sector is steadily losing market share in spirits. Beer companies, facing rising operating costs in areas like packaging and transportation, have raised prices and made higher profits, with consumers footing the bill.
According to the Bureau of Labor Statistics, the price of beer purchased at retail outlets such as grocery stores increased 5.9% year over year in the 12 months ended April 2023. The rate was above headline inflation of 4.9% over the same period.
Since 2000, retail beer consumption at home has increased by more than 72%. For people who drink out, the cost of beer has increased even more, rising 102% over that time.
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While beer lovers feel inflation in their wallets, price hikes over the past year have helped some of the world’s largest beer makers to post strong performances.
In its latest quarterly earnings report Anheuser-Busch InBev, the world’s largest brewer and maker of Bud Light, reported a jump in profits, driven by price increases and prompting consumers to spend more on premium offerings. As a result, the brewing giant grew its core earnings by 13.6% year over year to $4.76 billion. At the same time, beer sales increased by only 0.4% compared to the previous year.
Other beer makers like Molson Coors and Heineken are also reporting better-than-expected earnings as consumers absorb higher prices.
Danelle Kosmal, vice president for research at the Beer Institute, said beer is still a staple and an “affordable luxury” in many American homes. She notes that other drink categories, such as juices and carbonated drinks, posted double-digit gains that far outpaced the headline inflation rate.
Meanwhile, drinkers of distilled spirits and wine beverages are faring much better amid rising inflation in the country. Prices for both categories have increased only moderately year over year, by around 1% to 2.5%.
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