What's up everyone! Happy Monday.
I had a call yesterday with a brewery trying to figure out if they can raise prices. The short answer is "it depends"—so here's how I'm seeing the tradeoffs.
Inflation, tariffs, and supply chain disruption have driven up the cost of malt, hops, packaging, and labor. Meanwhile, consumer discretionary spending is getting squeezed. High housing costs, stagnant wages, and economic uncertainty have made beer buyers more price-sensitive. Breweries are caught between rising costs and resistance to price increases. The result is a market where value—quality per dollar—matters more than ever.
The Cost Pressure
The 10% universal tariffs introduced in recent years have affected base malt, specialty malt, hops, and aluminum. Breweries that locked in contracts before tariffs have seen some relief, but spot purchases and new contracts reflect higher prices. Packaging—cans, lids, boxes, labels—has been volatile. Labor costs have risen as competition for workers has intensified. For many breweries, COGS as a percentage of revenue has crept up even as volume has declined.
Consumer Response
Retail scan data and distributor feedback suggest that consumers are trading down when prices rise. Premium craft SKUs may lose share to value-oriented options. On-premise, patrons may reduce visit frequency or order fewer rounds. Breweries that push through price increases without corresponding value—better experience, clearer quality, stronger brand—risk volume loss.
Strategic Responses
Breweries are responding in several ways. Some are reducing package sizes or shifting pack formats to hit price points—e.g., 12-packs instead of 24-packs, or single-serve cans. Others are investing in cost reduction—improving yield, reducing waste, negotiating better contracts—so that they can hold prices or raise them more slowly. Still others are emphasizing value through experience: a taproom that delivers more than just beer can justify a premium. The common thread is that pricing can no longer be set and forgotten; it must be reviewed in light of costs, competition, and consumer behavior.
The Data Imperative
Pricing decisions require cost visibility. If you do not know your COGS per SKU, you cannot assess whether a price point is sustainable. If you do not track depletion by channel, you cannot measure the impact of price changes. Breweries that treat costing and pricing as integrated disciplines are better positioned to navigate a high-cost environment.
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Cost and depletion visibility is the foundation for pricing decisions. BrewLedger supports that—see how it works when you're ready.