What is in this article?:
- Alcohol prices rise at restaurants, bars
- Craft beer prices the steadiest
Mass-market beer prices have risen more than those of craft beers in the past seven months.
Alcohol pricing in restaurants and bars over the past seven months has increased dramatically, with wide variations by segment, and researchers suspect restaurants may be making up for lost margins during the recession.
Restaurant Sciences LLC, a market research firm that tracks food and beverage consumption across the foodservice spectrum in North America, tracked millions of transactions at a period roughly between October 2012 and April 2013, breaking down price increases on various product categories by segment.
According to the research, mass-market beers, like Budweiser and Pabst Blue Ribbon, showed the highest price increases within the beer category — except in family dining concepts, where beer prices for that level of product remained steady. Despite the popularity of “ultra-premium” craft beers, price increases for those products were relatively low.
For liquor, the biggest increases were seen in fine dining — where the price of spirits grew more than 11 percent — and also in family dining, where prices increased 4.5 percent on average. The casual dining and bar/nightclub sectors, where most spirits are sold, saw virtually no increase.
Wine prices also inched up during the period, with the biggest increases seen at the family-dining and fine-dining levels — though the data may indicate consumers are migrating to more expensive bottles, said Chuck Ellis, president of Restaurant Sciences.
The report, however, does not explain why prices went up during the research period.
Ellis said it’s difficult to gauge whether wholesale prices are increasing overall because states have differing regulations and controls on alcohol sales. The fact that results varied dramatically by segment, however, indicates that wholesale price increases may not be entirely to blame, he said.
“I think restaurants are coming out of three-and-a-half years of tough times where they had to eat a lot of margin,” he said. That was particularly true at the fine-dining tier, he noted, which was hit hard by the recession, and where average drink prices across the board increased “with a vengeance.”
At the fine-dining level, for example, the price of spirits grew 11 percent on average during the six-month period of November 2012 through April 2013, while liquor pricing within the casual dining segment remained flat, with little to no increase.
Looking at the period of October 2012 through March 2013, wine prices in the fine-dining sector increased 5.3 percent, the researchers found.
Ellis said there’s an argument that some of that shift is the result of consumers trading up, buying an $11 glass rather than the $10 glass. “For wine, we know that’s part of it,” he said. “But not as much for spirits. About two-thirds of that increase was due to price increases and one-third was consumer mix.”