Americans are drinking less beer after Bud Light, among others, raised their prices.
In AB InBev's (BUD) latest quarterly results, the total volume of beer sold decreased by 0.9%. At the same time, total revenue grew 10.2% to $14.67 billion, with price increases a key driver of that. After price increases and "really complicated" weather in the month of December, CEO Michel Doukeris called the Q4 results in the U.S. a "one-off, complicated quarter" in a call with investors.
Last quarter, the average price of a 24-pack of 12 oz. beer went up nearly 8%, per NielsenIQ data that was cited by Bump Williams Consulting. AB InBev's brands saw some of the highest price increases.
Under its portfolio, the price of Bud Light went up 8.9% year-over-year in Q4, followed by Budweiser, up 8.7%, Stella Artois up 8.2%, and Michelob UItra, up 6.7%.
That's compared to other leaders in the industry like Molson Coors' (TAP) Coors Banquet, which saw the largest jump, up 9.1%, Miller Lite & Coors Light beer, up 8.6%, and Corona Extra (owned by Constellation Brands (STZ) ), up 6.5%.
AB InBev CEO Michel Doukeris said the company needed to take a price hike because it was "lagging behind inflation throughout most of the year, but catching up toward the end of the year," and encourages investors to "think about the positive carry-over that this price will have in 2023."
The cost of beer, ale and other malt beverages at home was up 9% year-over-year, per January's CPI data.
When asked how consumers have been responding to higher prices, he said, "We know that beer is a resilient category." He also anticipates that consumers "will see their [consumers] purchase power coming back." Reassuring investors, he said, "the balance of volume and price will be very positive."
Bill Newlands, Constellation Brands CEO, told Yahoo Finance people will be back for beer.
Following price increases in October, the company saw "some short-term sensitivity," but says beer is pretty recession-proof.
"It's fairly recession resistant," Newlands said. Consumers see beer as an "affordable luxury."
"It's a critical piece of what they do for enjoyment, so I think we are going to continue to see this be an important category that does well and certainly, our brands will be at the forefront of that because of their sheer strength in the marketplace."
In Constellation Brands' latest quarterly results, which ended November 30, 2022, beer sales increased by 8%, while the number of cases sold to retailers by a distributor were flat year-over-year.
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Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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