“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.
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.”
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As prices rise, Americans buy less beer
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.”
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Follow Mike Snider on Twitter: @mikesnider.