1st BATCH OF FILES AVAILABLE NOW!

Gas prices and affordability sat right alongside the theme of transformation and convergence as the clear topics du jour at our Spring Conference in Chicago this wk. Across the program, speakers had lots to say about consumer reactions to pricing activity, how much things have changed over the decades and in the last few mos. Here's a sampling of that commentary. Bernstein's Nadine Sarwat noted "the speed at which beer sort of fell off a cliff, and it wasn't the only one," after gas prices spiked this spring. She recalled the "really nice improvement" from down mid-singles to -2% in NielsenIQ scan data from Nov to early Apr. But "then you immediately see a drop off &mdash; not just in beer and also other beverages, energy drinks &mdash; on the back of gas prices." So after starting the year feeling good that the improvement would stick, "now I would say it really depends on what happens to the economy and gas prices." How beer turns out this yr is "going to come down to affordability."Attempting to measure the impact, Andrew Heritage of the Beer Institute found that consumers "were already squeezed" to begin with, "then you have a massive gas price shock and increased uncertainty. And this is sort of what we see in our industry right now." It's "more than just that gas price shock" that's "driving the current moment," he said, but the most significant negative impacts from recent fuel price increases appeared in mass merchandise and c-store channels, his analysis showed.Citing "some of the pullback in beer," Reyes Bev Group's Tom Day added that "you&#39;re seeing it across other categories as well. And we believe it's a lot driven by gas prices," he said. "Q1 was strong. Immigration was dialed back, which impacted all of our businesses" in 2025, he acknowledged. But then "the minute gas prices started jumping, we started seeing a pullback in beverage alcohol," which "like it or not, is the number one category that&#39;s most impacted by reduction in discretionary income."Other speakers also reflected on the impact of immigration policy on the beer biz last yr, another external hit outside of its control. Nadine estimated "that beer volume growth saw a 3 percentage point headwind last year" because of the policies. That famously hit Constellation and Mexican imports, but Firestone Walker's Nick Firestone explained that 805, brand that's still "80% of our business" and sits between imports and craft, "felt the brunt of many of those headwinds," too. And pricing is an area where "the beer business is very unique," he continued: "pricing is a partnership. Fundamentally [suppliers] don't have control over pricing of our own products.""Pricing is the most important thing," Happy Dad's Sam Shahidi said specifically of Gen Z. "Price point is the number one driver of scaring your consumer away." He explained how a friend who owns a bar in Dallas dropped prices significantly recently and saw a big swing to "one of the fastest growing" accounts in that territory. And price is part of "why we love being in the malt category for both FMB and seltzer, because we want to try to be below a $20 twelve pack for consumers."The relationship between on- and off-premise pricing is crucial for NBWA's Lester Jones. "The most overlooked data point in the alcohol beverage industry," in his view, is how "real per capita expenditures for food and beverages" went from 2-to-1 "at home versus away from home" in 1992, to 1-to-1 today. And there's "a big volumetric difference" in what that spend will get you at a bar vs a grocery store. Over time, he showed "tons of pricing in the on-premise and price moderates consumption," so "if it costs more today than it did yesterday, you're probably going to buy less of it today than you did yesterday." The good news, in his view, is that even amid the recent gas price surge, "the American consumer has not slowed down their away-from-home purchases." No wonder why leisure and hospitality hiring (seasonally adjusted) surged up 70K jobs in May Bureau of Labor Statistics tally, Lester pointed out to INSIGHTS separately, the largest increase of any jobs sector tracked for the mo.

Beer "Fell Off a Cliff" After "Gas Price Shock," Year "Going to Come Down to Affordability": Conference Highlights

Publishing Info