Inflation is driving up booze costs, which may trickle down to consumers

The alcohol industry is currently experiencing higher aluminum, transportation, and cardboard costs. It may soon pass the price on to consumers.

Maybe don’t open a tab at the bar.

The cost of making, packaging, and distributing beer, wine, and liquor is going up, per The Wall Street Journal.

The buzzkill is the inflated cost of, well, everything.

According to data firm NielsenIQ, the 52 consumer food categories it tracks are all up due to factors like increased demand, labor shortages, and supply chain disruptions (e.g., inclement weather, hackers, and the pandemic).

When it comes to the alcohol industry, the rising inputs include cardboard, glass, barley, and energy:

  • One Atlanta brewer told WSJ that the cost of transporting a truckload of beer 600 miles has doubled to ~$2k for small and midsize brewers.
  • The cost of aluminum, which is used to make beer and seltzer cans, is up 70% since May 2020.

For now, the booze industry is eating those costs

… but that may soon change. Constellation Brands — its portfolio including Corona and Svedka — is already predicting a 1%-2% increase for consumers.

The good news is that economists say wonky prices will likely stabilize.

Members of the White House’s Council of Economic Advisers issued a release in April predicting inflation to rise modestly over the next several months and then “fade back to a lower pace.”

Cheers to that.

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