And just like other essential fluids in life, like oil and gasoline, Beer prices are likely to climb. Educated guesses are at a minimum of at least a 10 percent jump in beer prices for the average consumer before the end of the year…
The International Herald Tribune noted in an article this week that beer sales “have been relatively flat in recent years among major brewers - including Anheuser-Busch, Molson Coors and Miller, a SABMiller unit - while small, independent brewers in the
"The craft brewing industry experienced a 12% increase by volume in 2006, with 6.7 million barrels of beer. Sales among microbreweries, which produce less than 15,000 barrels per year, grew 16% last year."
Do you remember the conversation we had last week with Hillary Cramer (“Ahead of the Curve”)? Her whole premise is figuring out the six-degrees of making bacon, or in this case, making beer (no pun intended): There are plenty of connections there.
According to the Herald Tribune, “everyone in the brewing industry is facing cost hikes in every step of production: Fuel, aluminum and glass prices have been going up quickly over a period of several years. Barley and wheat prices have skyrocketed as more farmers plant corn to meet increasing demand for ethanol, while others plant feed crops to replace fields lost to corn.”
For the past ten years, there’s been a glut of hops. That resulted in farmers refraining for producing more until the supply was diminished.
A quarter of the world's hops are grown in the
The result: a certain degree of "frothiness" in the prices for brewskies.
So far, price increases have been pretty modest - less than a dollar a 12-pack at retail, but analysts have identified the trend, and it’s towards $10 six-packs.
There could be a positive by-product of higher gasoline and beer prices: Fewer incidents of drinking and driving fatalities. That remains to be seen.