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Beer is not as much of a bargain as it used to be.
Americans drink less alcoholic beverages, and the sector is steadily losing market share in favor of spirits. Faced with rising operating costs in areas such as packaging and transportation, beer companies have raised prices and made bigger profits, with consumers footing the bill.
The price of beer purchased at retail locations such as grocery stores increased 5.9% for the 12 months through April 2023 compared to the previous year, according to data From the Bureau of Labor Statistics. The rate topped the overall inflation rate of 4.9% for the same period.
Since 2000, retail beer consumed at home has increased by more than 72%. The cost of beer rose the most for people who drink outside the home, jumping 102% over that period.
While beer enthusiasts felt their wallets bloated, price increases in the past year helped drive a strong performance for some of the world’s largest beer makers.
in its latest versions Quarterly earnings a report, Anheuser-Busch InBevThe world’s largest brewer and maker of Bud Light reported a jump in profits driven by price increases and getting consumers to spend more on premium offerings. As a result, the brewing giant saw its underlying earnings increase 13.6% year-over-year to $4.76 billion. At the same time, beer sales increased just 0.4% over last year.
Other brewers like Molson Coors and Heineken have also reported better-than-expected earnings as consumers suck at higher prices.
Beer remains a staple in many American homes and remains an “affordable luxury,” said Danielle Kosmal, vice president of research for the Beer Institute. She points out that other beverage categories, such as juices and soft drinks, experienced multiple exponential increases well above the overall rate of inflation.
Meanwhile, drinkers of distilled liquor and wine drinks are better off amid the country’s soaring inflation. Prices for both categories saw only moderate increases of between 1% and 2.5% year-on-year.
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