Consumers Feel Alcoholic Beverage Inflation 4x Over Actual Increases

As prices rise, consumers’ perception of alcoholic beverage inflation exceeds the measured rate 5 to 1.

By the Numbers

Research from the latest edition of PYMNTS’ Consumer Inflation Sentiment study, “Consumer Inflation Sentiment: In It For The Long Haul,” which draws from a survey of more than 2,300 United States adults, finds that consumers perceive the prices of alcoholic beverages to have risen 23.1% year over year.

Yet, data from the U.S. Bureau of Labor Statistics notes that the prices of these items have only risen 5% year over year, about a fifth of the amount that consumers perceive it to be.

The Data in Context

Notably, while inflation proves a headwind for leading beer, wine and spirits brands, the impact seems to be mostly on margins, rising prices not dramatically affecting consumers’ spending habits.

“Right now, we’re not seeing trade down in our U.S. market,” Molson Coors CEO Gavin Hattersley told analysts on a call last month discussing the company’s third quarter 2022 financial results. “Albeit premiumization has slowed down, but we’re not seeing trade down.”

Additionally, an October report from the Distilled Spirits Council of the United States (DISCUS), whose members include the majority of distilled spirits brands in the country, notes that, according to their index for measuring luxury spirits sales, the category grew 23% in the second quarter of 2022.

“We continued to see strong consumer demand for luxury spirits brands through the second quarter of 2022 despite the current economic environment,” DISCUS chief of public policy Christine LoCascio said in a statement. “It appears macroeconomic headwinds slowed the astonishing growth rate of luxury spirits sales of 2021 but were not strong enough to reverse the positive premiumization trend.”