As the U.S. economy fights its way out of pandemic-related shutdowns and disruptions, consumers are spending again—and inflation is on the rise. Couple that with rising input costs on packaging, and many breweries may be tempted to raise the price of their beer in taprooms and on retail shelves.
For the country’s biggest beer makers, price moves generally take place in the fall or early spring. And with little price movement in 2020, some industry experts assume that this fall will see an uptick in prices.
“With upward pressure in production costs—cans, labels, raw ingredients—and increased consumer demand back in the on-premise, a draft [price] increase is most definitely in the works,” says Donn Bichsel, Jr., founder of consulting firm 3Tier Beverages. “I have heard from multiple supplier partners that [distributors are starting] this discussion …, testing big suppliers’ appetite for raising prices up to $10 per half-barrel and $5 per sixtel for craft and imports, with $5 and $3, respectively, for domestics.”
But what does that mean for breweries who aren’t in direct competition with macro beer—or who don’t distribute their beer at all? The pricing calculations for smaller breweries are different from those of the big guys, but they still require forethought, strategy, and competitive analysis. Here, some experts suggest some guiding principles to frame your brewery’s conversation about whether to raise prices.