Beer Marketer's Insights - Could Beer Biz Get 2% Pricing Next Yr? "No," Say 3 Wall St Analysts Emphatically

Another hot topic that wove thru several presentations at our Beer Insights Seminar earlier this week was the growing pressure on beer industry prices and suppliers' increased emphasis on affordability (as they respond to increasingly challenged consumers). That's showing up in their price-pack architecture, fewer and smaller front-line increases and actual price reductions on some brands. Can the beer biz get 2% pricing next yr, INSIGHTS asked a panel of 3 leading Wall Street analysts? "No," said Evercore ISI's sr managing director Robert Ottenstein immediately in response. "No Way," emphatically agreed HSBC managing director Carlos Laboy. Goldman Sachs' managing director Bonnie Herzog also said "no," adding that any pricing next yr will be more thru "net revenue management," i.e. different packaging, etc. Concern About Discounts and Price Reductions; "Don't Lower Prices," Warned Robert Analysts expressed concern about increased discounting and even price reductions on some brands. "I am worried about some of the discounting that's out there from some of the retailers," said Robert. The inability of Michelob Ultra to realize incremental price is "not good," Robert added. "I don't like the pricing on Ultra. I don't like the headline price reductions on [Corona] Premier and [Modelo] Oro," he continued. "Maybe you're getting some volume, I don't like it. I don't like it on Heineken Silver" either, he said. So Robert essentially an equal opportunity offender on this subject, which he clearly feels very strongly about. "Be creative in terms of providing more value, rather than lowering prices," said Robert. "That's an across-the-board statement, I just don't like lower prices," he added. "Slow the increases, maybe not have an increase for a year or two, but don't lower prices. Because pricing is a signal of value," continued Robert. "You see this across industries. You lower prices, you lower the equity value of the brand. You see this time and time again across industries for decades," said Robert. That's "dead on," said Carlos.Several Pieces of Evidence Showing More Pricing Pressure; Beer CPI Up 1% Thru Sep Recall, beer CPI (consumer price index) is over 1 point below general inflation thru Sep 2025. Up just 1.1% yr-to-date. In a big switch, spirits biz taking more price than beer since Apr. And prices of beer's newly crowned #1 brand, Michelob Ultra, are basically level with a yr ago in scan data. Up just 0.3% to $29.50 (including lower prices at Walmart all summer long). That's lower than the avg price of a case of beer. What's more, several smaller import brands now selling at reduced prices to get to Ultra price point. And subpremium brands are gaining share, albeit still declining in sales, significantly boosted by Busch Light innovations in May-Jun.

Could Beer Biz Get 2% Pricing Next Yr? "No," Say 3 Wall St Analysts Emphatically

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