No doubt the entry of into the craft segment by Anheuser-Busch and other Big Alcohol giants through craft brewery acquisitions has turned up the pressure in the market place. Competition is as tough for craft brewers as it has ever been. But will Big Alcohol use their size to push pricing down – to squeeze smaller brewers out?
According to an article in the Motley Fool, AB has lowered their pricing on average by 2.5% for its acquired craft beer portfolio. Sales for most of these brands are up double digits. Is this strong growth related to the drop in price? The simple answer is no. Sales growth of acquired craft brands has been driven by adding new markets through their massive distribution channel, not by pricing.
But that doesn’t mean AB and other global brewers now playing in the craft segment won’t continue to drop pricing. A 2.5% price drop may be modest, but this may also only be the beginning. Time will tell. Keep a sharp eye on those shelf tags for acquired brands. They may be on a downward trend.