How the Economy and Consumer Habits will Impact the Beer Industry
In a rough and tumble economy, with ballooning inflation and fears of a looming recession, one of the most important indicators of where the beer industry might be headed is how beer drinkers feel about the economy, as measured by the Consumer Sentiment index published regularly by the University of Michigan. According to an analysis by beverage industry consulting firm First Key, this metric is highly predictive of certain beer-buying behaviors, and it’s currently at its lowest level since it was first measured in 1952.
First Key goes on to say that “what may be surprising to many is that falling consumer sentiment may actually be good for beer sales – although bad for beer’s price mix.”
“It can be tricky to interpret an overly simple economic analyses such as this one, and yet a likely explanation is that drinkers tend to trade down from wine and spirits as a result of growing economic distress. Or it may even be that beer benefits the same way that comfort food benefits during anxious times, as a source of familiarity and, well, comfort,” states First Key.
Understanding the complex relationship of a changing economy and consumer habits is imperative for craft brewers of all sizes to survive the rough seas ahead, Read the details of the analysis here.