The beer industry entered 2022 with concerns over aluminum can shortages and price increases, heightened by an increase in minimum order requirements by Ball Corporation, the world’s largest manufacturer of aluminum beverage cans.
While some predicted the landscape would result in increased costs of canned beer for consumers, beer on draft and in bottles actually recorded the largest price increases – at least in the on-premise channel – according to Untappd Insights, a Next Glass data firm.
Untappd analyzed menu pricing data from nearly 20,000 retailers between March 2022 and December 2022. Across all U.S. retailers, the average price of American light lager (per 16 oz. draft) increased +3.3% in the period, to $4.94 – while 12 oz. bottles of the style increased +3.4%, to $3.91. American IPA on draft increased +1.9%, from an average price of $6.75 per 16 oz. to $6.88, while 12 oz. bottles increased +3.7%, from $3.83 to $3.97.
Meanwhile, the average price of a 12 oz. can of American light lager at on-premise retailers increased +0.9% in the period, to $3.35, and American IPAs remained flat at $3.34.
The “no-to-slight increase” in price for 12 oz. can offerings is a reflection of “the reduction in the cost of aluminum,” according to Next Glass CEO Trace Smith. In March, aluminum futures were at an “all-time high” – spiked by Russia’s invasion of Ukraine – averaging $4,100/ton, according to the Untappd report. As of December, aluminum was down to about $2,400/ton.
IPAs recorded the largest daft price increases at brewery taphouses (+2.9%) – averaging $6.64/16 oz. draft – followed by bars (+2.5%), beer bars/beer gardens (+2.4%) and restaurants (+1.8%). Still, taphouses recorded the cheapest price for IPAs, with an average of $6.64 per 16 oz. pour. Beer bars recorded the highest average price at $7.19, followed by bars ($6.97), and restaurants ($6.96).
“Brewery taprooms have seen solid price increases across three styles we examined and, promisingly, taprooms were able to command the highest increase of any category for the most popular craft substyle, American IPA,” Smith wrote in the report. “Across all venue types, however, the lower priced American light lager saw the largest price increase on a percentage basis.”
Lagers recorded the largest increase at beer bars/beer gardens (+3.6%) – the venue that already had the second highest lager prices, averaging $5.53 per 16 oz. pour – followed by bars (3.4%), restaurants (+3%) and taphouses (+2.7%). Taphouses recorded the highest average price for the style at $5.65 per 16 oz. pour, followed by restaurants ($4.87) and bars ($4.86).
Similarly, the price of fruit beers increased the most at beer bars/beer gardens (+3.1%), followed by bars (+2.7%), restaurants and taphouses (both +2.5%). Beer bars recorded the highest average price for the style ($6.74), followed by restaurants ($6.61), bars ($6.56) and brewery taphouses ($6.45). The average draft price of fruit beers across all venues increased +2.2%, to $6.51 per 16 oz. pour.
“Driving the price increase for the average American light lager substyle were the three most popular American light lagers among the Untappd app user and Untappd for Business communities – Bud Light, Miller Lite, and Coors Light,” Smith wrote.
The average draft price of Bud Light (owned by Anheuser-Busch InBev) across on-premise venues increased +2.7% in the period, to $4.23, while Molson Coors-owned Miller Lite (Molson Coors) increased +2.9% to $4.28, and Coors Light increased +2.4%, to $4.35.
Price increases for the top three light lagers were steeper at restaurants than any of Untappd’s other observed “retail categories” (restaurants, bars, entertainment venues, brewery taphouses, hotels, etc.): Bud Light +3.4%, Miller Lite +3.4% and Coors Light +2.7%.
“I suspect increased labor costs, which are generally higher in restaurants relative to other retail categories, factored into the above average price increases of these popular products – something has to pay the bills!” Smith wrote.
In an aside, Smith noted that price increases for A-B’s craft brands – which include Elysian, Golden Road, Goose Island and Breckridge, among others – “significantly outpaced beers of the same style from independent breweries.” The largest discrepancy reported was Breckenridge’s Vanilla Porter, which increased price +15.3% on average across Colorado venues to $6.33 per 16 oz. draft pour, compared to the overall American porter styles increasing +4.9% to $6.61 in the state. The one exception was Wicked Weed Brewing’s Pernicious IPA, which increased its average draft price in its home state of North Carolina +0.2% to $6.55, while the American IPA styles increased +2.3% to an average $6.59/16 oz. in the state.
“I’ve spoken with a number of independent brewers that were unsure about taking price increases in 2022 (some macro producers took two price increases),” Smith wrote. “It appears, based on the pricing data we see from beers coming out of A-B InBev’s craft unit, that there is ample headroom for smaller producers to take more price in 2023.”