Press Release:

According to GuestMetrics, the overall average price for beer in full service restaurants and bars accelerated during the first quarter of 2013, though higher average prices in the Craft beer segment was driven by more expensive craft beers becoming increasingly popular among consumers.

“While beer’s price/mix was up +3.2% during 2012 compared to the prior year, that accelerated to +3.6% during the first quarter of 2013,” said Bill Pecoriello, CEO of GuestMetrics LLC. “Looking specifically at the Craft beer segment, its price/mix was up +3.5% in 2012 and accelerated to +3.8% during the first quarter of 2013. Additionally, looking at pricing in absolute terms, while Craft and Imports were generally at parity in 2011, the gap widened in 2012 as the price of Craft increased faster than that of Imports, and widened even further during the first quarter of 2013. However, in analyzing the various price tiers within Craft, our analysis indicates that the increase in average prices was primarily the result of a mix effect as consumers increasingly chose more expensive Craft beers,” continued Pecoriello. Based on data from GuestMetrics, the average Craft price was $5.42 vs. Import of $5.39 in 2011 for a 3-cent delta, Craft was $5.59 vs. Import of $5.52 in 2012 for a 7-cent delta, and during 1Q13, Craft was $5.72 vs. Import of $5.62 for a 10-cent delta.

“As we wrote about earlier in the year, the majority of growth among Craft beers in 2011 and 2012 was driven by the more expensive price tiers within Craft beers, and during 1Q13, this trend continued at an accelerated rate,” said Peter Reidhead, VP of Strategy and Insights at GuestMetrics. “Based on our data, while the most expensive brands within Craft, which we call Tier #1, accounted for 15% of Craft beers sold in 2011, that increased to 22% in 2012, and was 29% during the first quarter of 2013. However, while there was a fairly dramatic trade-up taking place within Crafts, the average price paid within each of the four price tiers has remained largely unchanged over the past nine quarters. Therefore, the increase in Craft price from $5.42 in 2011 to $5.59 in 2012 to $5.72 in 1Q13 was due almost exclusively to mix effect as consumers traded up to more expensive brands.”

“Given the rapid shifts taking place in on-premise and the beer category in particular, we believe this is a perfect example of why operators and suppliers need to have an up-to-date understanding of the changes taking place in consumer preferences,” said Brian Barrett, President of GuestMetrics. Based on data from GuestMetrics, looking at the y/y growth of price/mix in 2012 and 1Q13 compared to their respective prior year periods, Premium Light price/mix accelerated from +2.2% to +3.2%, Premium Plus from +2.4% to +3.4%, and Premium Regular from +0.9% to +1.4%.