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Looks like inflation has finally hit the beer industry and customers are putting down their pint glasses.
For most of last year, despite rising inflation, the beer industry was largely unaffected and many experts came forward touting the industry as being 'inflation proof.'
But in the last three months of 2022, U.S. demand for beer fell after a price hike took effect in October across the industry and was passed on to customers. In addition, according to the Beer Institute, a national trade organization, there was a 10% decrease in beer imports to the U.S. That, according to analysts, is concerning for the industry's future.
Anheuser-Bush, which brews Budweiser, insisted that despite the price hike, customers would continue to buy their product despite the price hike. But it also said it would be introducing cheaper packages for customers who were struggling financially.
Constellation Brands, which brews Corona beer, blamed their price hikes on higher packaging, fuel, and freight costs.
Alcohol executives say customers are also switching from buying beer at small, locally-owned liquor and convenience stores and grocery stores, to big box retailers because of discounts and promotions.
The champagne industry also took a hit as prosecco sales shot up over the holidays as people chose the cheaper Italian wine over traditional French Champagne.