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How much of an impact do gas prices and general inflation increases have on recent downturn in beer trends? Depends on who you ask, but signs increasingly point to somethin' happenin' here. Between that and the longer-term shifts in how consumers spend on alcohol, beer faces another uphill battle in 2026, comments and data from Bernstein analyst Nadine Sarwat, NBWA chief economist Lester Jones, and Beer Inst chief economist Andrew Heritage suggested at Beer Insights Spring Conference in Chicago. But beer's far from alone. "We were seeing a really nice improvement," then "immediately see a drop off, not just in beer," but other bevs like energy drinks and "other parts" of soft drinks "on the back of gas prices," said Nadine. Spirits "maybe hasn't seen as big a drop off." But overall, beer's back to similar performance as last year in recent NIQ scans while spirits trend is "a tad worse" than last yr. That's actually an encouraging sign to Nadine, that beer's not alone. "Something changed" in the latest period, "but that's the main thing I'm worried about" rather than structural challenges. After lapping last yr's "big one-off factors," specifically the increased immigration enforcement impact on Hispanic consumers, there were signs of stabilization in beer from Nov 2025 thru early Apr 2026, Nadine noted. Then it flipped. Now the remainder of the yr "really depends on what happens to the economy and gas prices," Nadine figures. "I think it's going to come down to affordability.""The stresses that we&#39;re seeing for the beer consumer are clearly stresses that consumers that drink other products feel as well," Andrew said separately. Consumer confidence hit an all-time low in May, per oft-cited University of Michigan survey that's been running since 1952. When trends improved in Q1, people arguing beer's declines were more structural vs cyclical "got a little quiet," and that tells me "things actually did start to stabilize" and "yeah, in fact, all the external cyclical pressures," from gas prices to weather and more "are in fact the major driver" of recent slowdown.STRs Hit Hardest Off-Prem Since Apr, 'Cept Dollar Stores; On-Prem Continues to Outperform Indeed, Andrew found that "gas price shock" had the most "significant" impact on c-stores and mass merch channels, among other off-prem channels. Beer sales-to-retailers volume in the US went from -1.6% in Q1 to down ~5% in Apr-May. Decline rates in c-stores and liquor stores more than doubled since Q1 to -5.7% and -4.7% respectively. Grocery and mass merch trends saw extra steep ~4-pt negative swings since Q1, suddenly down 5% and 4.3% since Apr. Dollar retailer channel is the only channel unphased, up ~9% in both Q1 and Q2 YTD. But on-premise channels were less impacted overall, continuing to outperform off-prem by a wide margin this yr. Bar/taverns (-1.8%) and restaurants (-2.5%) depletions saw lowest % slowdown of any channels, just 0.6-0.7 pts below Q1 trends. And while concession and recreation slowed more since Apr, they're down just 1.9% and 3.2%, respectively.Consumer Spend Away from Home Nearly Equal to At Home and That Moderates Consumption On-prem's outperformance accentuates Lester's "most overlooked datapoint in the alcohol beverage industry," which is "real per capita expenditures for food and beverages" at home vs away from home. Consumers used to spend 2:1 at home vs away from home, but now it's nearly 1:1, meaning consumers are "just as likely to spend" their money in an on-premise establishment as an off-premise establishment. That's gonna be a drag on volume since how folks consume away from home "is very different" vs at home. Beer cos still operate with more emphasis on driving displays in the off-premise, but on-prem is where the dollars are increasingly shifting toward, Lester emphasized. "It would behoove ourselves to kind of think differently," he said.On-prem retailers "are willingly spending more money" on their beer purchases and price increases to consumers "are much more aggressive in the on-premise right now&hellip;because that's quite frankly where the people are." Even since gas prices began to spike, consumer expenditures away from home "continues to show that the American consumer has not slowed down their away from home purchases." Ultimately, "it's not going to be a volume game," he stated.Beer CPI Increases for At Home Pulling Ahead of Spirits; Spirits Prices Up Most Away from Home Meanwhile, beer price increases for at-home consumption are back to handily outpacing spirits YTD thru May 2026, INSIGHTS notes. That wasn't the case in 2025, recall, as both spirits and beer CPI at home rose 1.1%. For first two mos of 2026, they were neck and neck again. But as general inflation ticked up amid war in Iran, beer CPI increased and spirits CPI decelerated. Now beer CPI at home is up 2% vs spirits CPI +0.9% YTD thru May. Spirits prices were flat in both Apr and May while beer increases rose 2.2% in Apr and +2.9% in May. All while general inflation rose ~4% in Apr-May, increasing to +3.2% for the year. Tho spirits prices have been rising faster away from home thruout the last several yrs, Nadine pointed out separately. Up more than 30% vs beer up ~25% since 2019."Cash Outlay" is King It's not just on-premise shifts changing the way folks spend on alcohol, Nadine reminded. Combo of premiumization, RTD wine & spirits growth and on-premise shifts collectively drove increases, leading average share of wallet spend on alcohol to grow vs 2019 for American households, she shared citing Bureau of Economic Analysis data. CPI data shows "something similar" too. The way consumers drink alcohol is changing, and health & wellness, Gen Z drinking less factors into that. But the "main thing" weighing on consumption is what Nadine calls "cash outlay," in her view. If a consumer has $20 to spend on alcohol and wants to be a bit more cost-conscious, instead of spending slightly more for "much more" alcohol on a bottle of Jack Daniel's, they're spending slightly less for an 8pk of High Noon, she used as an example.Pricing Won't Make Up for Volume Loss in Nadine's View; But "Price War" Would Be "No Help to Anyone" Asked if she thinks volume declines will be offset by price increases, Nadine flat-out said "no." But pricing/promo actions at the brand level are mainly just "a tool." She pointed to aggressive discounting in tequila that "didn't really do anything for volumes" as a key signal that "if a price war starts, it's of no help to anyone."

Price, Affordability and On-Prem Spend Becoming Bigger Factors on 2026 Trends

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