As inflation continues to hit both daily routines and wallets, people do what they can to counter rising prices: some by driving less, others by not taking that vacation and still others by buying up certain liquors before the prices rise.
Over the last month, more than one alcohol producer reported an increase a boost in sales in advance of rising prices. The maker behind not just the spirit needed to make a Negroni but also brands like Aperol and Grand Marnier, Campari reported revenue of 535 million euros (US$562 million) in the first three months of 2022.
People Are Buying A Lot Of Campari, Aperol
Compared to the same quarter in 2021, sales are up 29%. While some of the sales boost comes from bars reopening in Europe, a not-so-insignificant portion also comes from both bars and individuals buying more in advance of the company increasing prices by the "mid-single-digit and upwards" to counter inflation
Aperol, in particular, saw a 72% boost in sales as many bought entire boxes to stock up before prices increase.
"In difficult times, you cannot treat yourself, maybe you skip the vacation but you can go for the nice bottle of Scotch, cognac or bourbon," Campari CEO Bob Kunze-Concewitz told Reuters.
Heineken Is Also Not Struggling
Dutch beer brewer and brand Heineken (HEINY) also saw a 5.2% annual jump in beer sales; sales to bars and restaurants in particular nearly tripled. As Heineken significantly raised prices on some of its premium products, revenue jumped 24.9%.
"Raising the price on premium products won't be met with as much consumer kickback as it would on a value offering," Hargreaves Lansdown analyst Matt Britzman told Reuters.
This type of demand has also kept investors happy as Heineken shares, which have been falling for the last two years, rose 2.85% in the last month.
While strong sales cannot always be tied into specific trends such as inflation or the pandemic, the fact remains that many people are buying more alcohol than they were earlier.
According to a report by financial services company Rabobank, online alcohol sales from grocery stores quadrupled from around $441 million in 2019 to $1.6 billion in 2021. In 2022, sales are expected to grow by another 15% to $1.87 billion.
When In Doubt, Blame Inflation
While inflation cannot be used to explain every current trend, alcohol is not immune to the staggering inflation gripping many sectors of the economy. Data from the Office for National Statistics (ONS) found that wine prices rose by 3.3% between January 2021 and 2022 while beer prices increased by 0.8%.
This may not be as strong as what's happening to food items like eggs and bacon, which rose by a respective 7.9% and 30% in the same time period, but is significant enough to have a psychological effect on many people's buying habits — for the makers, this is large a positive as fear of inflation can often lead to panic-buying and stocking up on the part of the consumer.
As a result, sales of spirits like Aperol and Campari are able to survive even major world events like Russia's war on Ukraine — while the company has not stopped business in Russia entirely like many other companies, the cuts would have been significant enough had it not been for the global spike in sales.
"What we decided to do in Russia is to basically reduce the business significantly, our aim is to have enough sales to cover the wage bills of our people in the country," Kunze-Concewitz told Reuters.
