No more cheap beer? Blame hipsters
Brews like Pabst Blue Ribbon and Miller Lite have increased nearly 7% in price because of their 'retro' appeal. Wine and liquor are going up, too, but for different reasons.
Hipsters were recently accused of killing American razor sales. Now we can go after them for skewing beer prices, too: It seems that the brew passing between those unbarbered lips isn't artisanal ale but rather Pabst Blue Ribbon.
They're showing "a retro attraction" to brands like PBR, Miller Lite and Budweiser, according to Chuck Ellis of the Restaurant Sciences market research firm.
Ellis told the National Restaurant News that despite widespread interest in craft beers, it was the "mass market" stuff that showed the highest rate of increase.
While it's easy to pick on hipsters, they aren't to blame for other alcohol price increases.
A handful of theories have emerged, including increased demand, crop failures, labor shortages, restaurants making up for lost revenue and less wine made due to recession-slowed sales.
No matter what the reason, you'll be paying noticeably higher prices for whatever kind of grog you favor. That is, unless you're a fan of craft beers.
Yes, you read that right: While the price of "sub-premium" brewskis increased by 6.8%, small-batch beers went up only 1.8%.
Willing to pay more?
Restaurant Sciences studied millions of transactions completed between October 2012 and April 2013. The firm categorized price increases by market segment: bar/nightclub and family, casual and fine dining.
Liquor went up the highest in fine and family dining (more than 11% and 4.5%, respectively), with no increase in the casual dining and bar/nightclub sectors.
On the other hand, wine prices shot up 8.4% in family-friendly eateries and 5.4% in white-tablecloth establishments.
The Los Angeles Times suggests this is due to shrinking wine inventories and the growing trend of "targeting younger drinkers, offering labels with sassier names, relaxed tasting events and easy-drinking wines."
It's certainly worth the effort: Some $289 million worth of wine is sold in restaurants every year.
What's a drinker to do?
A cold beer with friends, fine wine at an elegant meal or a high-end scotch on a winter evening aren't necessities, obviously. But they're life-enhancing experiences and some people are willing to pay more for them.
Maybe a lot more. "North Americans are buying more from the top shelf than drinkers elsewhere," notes Kyle Stock of Bloomberg Businessweek.
Diageo, a company that owns many brands of potent potables, reports that North America is responsible for 40% of its profits but only about 30% of its sales. Top performers are Bulleit bourbon and high-end firewaters like Johnnie Walker Blue Label, which sells for as much as $200 a bottle. The company increased its prices from 7% to 10% but drinkers "didn't seem to notice, with sales by volume remaining steady."
Ellis theorizes that recession-related losses have led restaurateurs to increase prices: "I think (they're) coming out of three and a half years of tough times where they had to eat a lot of margin."
Fine-dining establishments were particularly slammed during the recession, he notes, and these eateries' average drink prices have gone up "with a vengeance."
Apparently some consumers are willing to pay for what they most want. The rest of us will be hitting happy hours and watching for social media vouchers that will at least cut the cost of appetizers or dinner, to help make up for the pricier rotgut. Or we'll be bringing our own wine and cheerfully paying the corkage fee versus $11 a glass for somebody else's grape juice.
Readers: Have you noticed the price increases? At what point will you stop buying alcohol when you're out on the town?
More on MSN Money:
I want the good ole days back so I can burn this tie.
Now that the cheap brands see their sales improving, greed takes over.
Suds and Duds,
There is no reason for beer prices to have escalated to where they are now. For low volume 'craft' beers or similar specialties, possibly yes, but overall its simply a matter of greed, and very akin to the escalating gasoline prices. Due to cost I had to give up on purchasing my traditional favorites like Anchor Steam, Peroni, Spaten, Becks and Dos Equis, and now go to the local Sprouts Market where their daily special is PBR at a rather amazing $ 4.49 a six. Not elegant... but still rather drinkable.
Peace to all ~
One influence on higher beer prices was the consolidation of the major breweries over the past ten years: there are fewer major beer companies than ten or even five years ago. Budweiser, the American iconic beer, was bought out by a Euro conglomerate; the major Canadian breweries bought out too. Coors was bought out. There are only 2-3 major beer companies in the world today. Monopoly companies can raise prices. Even many of the "craft" beers are made by the monopoly companies--check out where the beer is bottled.
The article indicates the higher liquor prices all occurred at upscale restaurants and family restaurants and this indicates to me that mixed drinks are now more popular (like martinis) and these restaurant owners like this article says are socking it to the customer. Liquor and beer are by far the most profitable items sold in restaurants.
I have noticed myself that a mixed drink in the middle scale restaurants I frequent are costing over $6-8 per drink and often I can't even taste the liquor. I suspect some of them may be shorting the shot of liquor and adding more fruit juice, water and ice.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
ABOUT SMART SPENDING
LATEST BLOG POSTS
Some "convenience" items come with a shocking markup. Even a minimal amount of prep work can help you get the most from your shopping dollars.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'