Here's How Drinking Habits Have Changed With Inflation
While Hank Williams Jr. might have sung about "A Tear in My Beer," inflation is making it a reality for many Americans. Although rising food costs, fears of a recession, and a myriad of economic woes have caused strife for consumers, it hasn't eliminated budgets for beer. In fact, for those who prefer to toast with an alcoholic beverage, the outlook might have a few more bubbles rising to the top.
As reported by Forbes, some studies assert that, "Alcoholic beverage consumption should be resilient even during a future economic recession." While prices may fluctuate depending on demand and profit margins, it appears that drinkers are finding ways to keep this "affordable luxury" in their shopping cart.
Still, rising food costs have impacted many common grocery store items. From eggs becoming less affordable to soaring meat prices, consumers have felt the pinch. But while some shoppers have saved money by switching to generic brands, one report suggests the same can't be said of the alcohol aisle.
Is inflation causing consumers to crack open a different beer?
When you only have $5 in your wallet, do you choose a premium beer or two economy beers? It's a question more shoppers are facing as inflation impacts food budgets. Major beer brands Molson Coors, Heineken, AB InBev, and Constellation Brands continue to see demand for premium beer products (per Food Dive). While some of these companies have consolidated their portfolios, it appears that consumers have not downgraded to economy beers. Choices like Modelo Especial, Corona Extra, and Heineken continue to show resilient sales numbers. There is a general assumption that beer falls under the "affordability factor," AB InBev CEO Michel Doukeris says, signaling plenty of bubbles left in the beer market.
In contrast, The Washington Post cited a National Retail Federation report that shows consumers switching to lower cost products. As some consumers mentioned, price, not flavor, is the driving factor. But companies may be prepared for this. Gavin Hattersley, CEO of Molson Coors Beverage Company, told Food Dive in May, "If [consumers] do trade down, we've got brands that are ready and waiting for them." While consumers may not be toasting the economic downturn, they appear to be keeping their glasses full in some fashion.