This holiday season, alcohol will cost you a little more than it did last year. Additionally, there are ways to get more for your money whether purchasing a round of drinks or bringing a bottle to an event.
Beer continues to be less expensive than many liquors, and alcohol is still typically less expensive at home than in pubs and restaurants. But some spirits, including many tequilas and whiskeys, are seeing noteworthy price drops that have made even top-shelf bottles a bit more affordable.
According to official inflation data issued on Wednesday, the average cost of whiskey purchased for domestic consumption has decreased by almost 2% in the past year. Conversely, beer served outside the house costs roughly 4% more.
And on Thursday, federal regulators turned a spotlight on retail booze prices,accusing a major U.S. liquor distributorof favoring big chains like Costco and Kroger over independent shops, making it harder for smaller operators to compete.
In any case, most price changes for alcoholic beverages have been somewhat minor thus far. Between the first half of 2019 and the first half of this year, the cost of alcohol increased by about 15%, which was less than the 23% increase in overall consumer prices during that time. While overall inflation was 2.7% as of last month, alcohol prices had only increased 1.8% from the previous year.
There are actually high-quality products available for less money. It’s frequently superior to the items you’re paying more for.
IWSR U.S. president Marten Lodewijks.
Price control has been aided by weak demand.
According to Marten Lodewijks, president of the U.S. division of the beverage industry statistics firm IWSR, alcohol sales have had a difficult year. It s been fairly consistent across the board: a general pulling back of consumer spend on alcohol, and spirits in particular.
That trend coincides with a broader caution rippling through the economy. Retail sales around Thanksgiving showedmany households are still eager to spend, but only at the right price. Many brands are chasing value-wary shoppers wallets withincreasingly competitive deals and discounts.
As a nonessential item, it hit consumers quite hard, Lodewijks said of inflation s impact on alcohol in recent years. When prices on everything else started going up, suddenly that extra $5 on a bottle of spirits was meaningful.
His firm flagged in September thatsales volumes had declinedmore than expected during the first seven months of this year for beer, wine and spirits alike; the only exception was in canned cocktails, which beverage makershave been pushing heavily. The falloffs came amidgrowing interest in nonalcoholic mocktailsand signs that younger people arethinking twice about causal drinking. Shares of Diageo, a major importer of Scottish whiskey, and Pernod Ricard, which imports Absolut Vodka and Jameson whiskey, are each down by double digits since the start of this year.
U.S. beer sales have also suffered, squeezing brewers who havefaced a yearslong pullbackafter the previous decade s craft beer boom. Even so, beer remains the cheapest and by far the most popular alcohol at full-service restaurants,accounting for over half of booze salesin those settings this year, according to data released Tuesday by the transaction processor Toast.
Typically, weaker sales encourage price cuts, but this week s inflation data showed beer at bars and restaurants posting the biggest jump climbing 4% between November 2023 and last month. Lodewijks said at least two factors are likely at play: Many brewers have beenpassing on higher coststo their customers and chasing higher-dollar drinkers.
While mainstream and below beer has seen major volume losses, premium and above beer has generally fared very well, he said. Now, consumers won t be fooled into thinking a mainstream beer is premium simply by raising prices, but this could be an attempt by some brand owners to change the perception of their brand by moving it up the price ladder.
There are still big unknowns when it comes to brewers costs. President-elect Donald Trump s victory in November led somebeer makers to voice fresh worriesabout tariffs, after his first roundhit the aluminum and steel-reliant industryin 2018. Even Modelo importer Constellation Brands, which hadwaved offtrade concerns before the election, saw its stock fall 3.5% after Trump proposed25% tariffson goods from Mexico last month, before shares steadied.
In the meantime, some of the industry s headwinds since its pandemic-era boom are still benefiting consumers this holiday season.
The price of agave, a key ingredient in tequila and mezcal, has fallen dramatically since 2022, when it peaked at 32 Mexican pesos per kilogram, or about $1.60. By February 2024, 1 kilogram of agave cost just 5 Mexican pesos, or less than 30 cents. Tequila manufacturers took advantageas demand soared, producing trendy luxury tequilas many of them at lower prices. That has made it easier to buy a high-quality bottle in recent years without spending more, Lodewijks said.
What consumers are saying is, I m not going to spend $50, but spending $30, I can get a really good tequila for that price, he said.
Tequila is still the priciest liquor you can order at a sit-down restaurant, averaging $13.48 per drink as of the third quarter, the Toast data shows. But it s the only booze whose costs have remained basically flat for the past year.
Premium bourbons have propped up the U.S. whiskey industry, which is relatively strong at the moment even as Scottish and other imported options struggle, Lodewijks said.
Still, whiskey was the only at-home alcoholic beverage to see prices outright decline since last year, inflation data shows. Whiskey distillers have seen softer demand in key markets like California, Florida and Kentucky,according to IWSR. But Lodewijks said it could be that producers have managed to lower their costs through more efficient production.
Shop around and do your research, and you can really find good-quality product at a lower price, he advised holiday quaffers and bottle-gifters. Often it s better than the stuff you re paying more for.
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