The price of beer is creeping up, but it might not be because producers are charging more.
The average price for a case of beer sold in off-premise retail chains has increased $1.32, to $26.47 year-to-date through April 18, compared to the same period last year, according to data shared by market research firm IRI.
“Many brands across the United States, across beer, wine and spirits have stopped any kind of discounting, because of the fact that they don’t need to,” 3 Tier Beverages founder and CEO Donn Bichsel told Brewbound. “You don’t have shoppers that are going into stores and shopping on pricing. More and more, sales are going via the internet.”
The period last year that the most recent batch of IRI data cycles against includes both the 12 weeks before the COVID-19 pandemic forced major shifts in consumer purchasing behavior and the elevated off-premise sales during the March 2020 stock-up period that resulted from those shifts.
“There’s a lot less discounting that’s being done overall,” Bichsel said. “There’s not a need to discount to get great, big floor displays. There’s not a need to do any pulse pricing, because right now, and through the pandemic, everything is selling. So, why discount it?”
In the three-tier system, retailers set the ultimate price consumers pay, but the pricing chain starts with the price brewers set for sales to wholesalers.
Segments with the biggest price bumps in 2021 include cider (+$1.76 per case, to $43.27), flavored malt beverages (+$1.28 per case, to $35.55) and imports (+$1 per case, to $33.36).
The price per case of Boston Beer’s Angry Orchard Crisp Apple — the largest cider in IRI’s list of the 100 best-selling brands across nationwide multi-outlet retailers — has increased $1.32, to $38.99, $0.44 below the segment average, which indicates that increases are coming from smaller suppliers. Cider’s price per case has ticked up slightly year-to-date; it increased $1.74 for the 52 weeks ending April 18, according to IRI. Scan data, however, doesn’t paint a full picture for the cider segment, which over-indexes in the on-premise channel. Most of the segment’s growth is concentrated in its regional brands, which increased off-premise sales 33% in 2020.
Across the craft beer segment, average price per case has increased $0.87, to $39.35 year-to-date through April 18, compared to the same period in 2020. Craft segment dollar sales have increased 6.4%.
Of the six New Belgium SKUs on IRI’s list of the top 30 craft brands, five have increased price per case year-to-date through April 18:
- Voodoo Ranger Rotating IPA — +$1.20 per case;
- Voodoo Ranger Juicy Haze IPA — +$1.06 per case;
- Voodoo Ranger Imperial IPA — +$0.87 per case;
- Voodoo Ranger IPA — +$0.70 per case;
- Fat Tire Amber Ale — +$0.68 per case.
The company’s sixth brand in the top 30, Voodoo Ranger Hoppy Pack, dropped in price by $0.66.
Nearly all of New Belgium’s brands have increased dollar sales year-to-date, even as the calendar cycles last year’s sky-high off-premise sales during the March 2020 stock-up period:
- Voodoo Ranger Hoppy Pack variety pack — +1,111.7% (cycling launch numbers), to $6.58 million;
- Voodoo Ranger Juicy Haze IPA — +106%, to $10.2 million;
- Voodoo Ranger Imperial IPA — +56.6%, to $35.1 million;
- Voodoo Ranger Rotating IPA (Captain Dynamite at the time the data was captured) — +43.8%, to $7.2 million.
Dollar sales of Fat Tire, the brewery’s flagship offering, declined 2.5%, to $17.4 million, making its off-premise sales about half those of Voodoo Ranger Imperial IPA, which was the second-best selling craft SKU overall, trailing only Molson Coors’ Blue Moon Belgian White Ale. Voodoo Ranger IPA, the original offering of the irreverent, hop-driven Voodoo Ranger family, posted dollar sales declines of 3.9%, to $12.6 million.
Voodoo Ranger Rotating IPA’s $1.20 price per case increase was the largest in the craft segment, followed by Sierra Nevada Hazy Little Thing IPA, which increased $1.15 per case, to $39.56. Boston Beer Company’s Samuel Adams Variety Pack posted the fourth-largest price per case increase, up $1, to $32.84 per case.
Both Hazy Little Thing IPA and the Samuel Adams Variety Pack have increased dollar sales year-to-date, by 26.9% and 25%, respectively.
Conversely, the steepest decline in price per case was on Anheuser-Busch InBev’s Wicked Weed Pernicious IPA, which fell by $1.45. At $46.70 per case, it is the second most expensive brand in IRI’s list of the 30 top-selling craft brands, which it cracked for the first time in March 2021. Dollar sales of Pernicious IPA have increased 146.7%, to $5.4 million year-to-date through April 18, according to IRI.
Wicked Weed, the Asheville, North Carolina-based craft beer brand A-B acquired in 2017, has expanded distribution in 2021, adding Alabama, Mississippi, and Delaware to its 11-state footprint.
At $48.21, the most expensive case in craft belongs to another brand in A-B’s Brewers Collective: Elysian Space Dust IPA . Year-to-date, the Seattle-based brand’s flagship offering has increased dollar sales 3.7%, to $23.2 million, making it the top-selling craft brand in A-B’s portfolio and the seventh-best selling craft brand overall. Space Dust IPA’s price per case has increased $0.09 year-to-date, but has declined $0.17 for the 52 weeks ending April 18.
It would stand to reason that the acquisition of craft brands by the world’s largest beer manufacturer would lead to price declines due to scale and efficiency, but Bichsel doesn’t see it that way.
“Those brands are seen as premium brands — they were before they were bought by A-B, so why shouldn’t they continue to be premium brands after the fact?” he asked. “I don’t think the general consumer even notices, so why should they discount a brand that’s already staked its market being a premium brand?”
In fact, almost all the most expensive craft cases belong to global brewers or private equity backed rollups — and are all IPAs:
- Elysian Space Dust IPA — $48.21 (A-B);
- Wicked Weed Pernicious IPA — $46.70 (A-B);
- Voodoo Ranger Rotating IPA — $43.46 (Lion Little World);
- Cigar City Jai Alai IPA — $42.88 (CANarchy);
- Stone IPA — $42.57 (independently owned with investment from VMG Partners).
Karbach Hopadillo IPA, the flagship offering of the Houston-based craft brewery that A-B acquired in 2016, joined Wicked Weed Pernicious IPA in breaking into IRI’s top 30 craft brands for the first time in March 2021. The brand’s dollar sales have increased 14.8%, to $5 million, year-to-date. Its price per case has increased $0.06, to $37.57.
Elsewhere in A-B’s craft portfolio, Kona Big Wave Golden Ale increased dollar sales 25%, to $11.7 million. Its price per case declined $0.12, to $39.54. Goose Island IPA’s price per case increased $0.80, to $31.19; however, the brand’s dollar sales declined 6.7%, to $11.7 million.
A-B’s Shock Top Belgian White Ale continues to decline at off-premise retail, with dollar sales dropping by 26.7% year-to-date. The brand’s losses are accelerating — for the 52 weeks ending April 18, Shock Top’s dollar sales declined 18.1%.