At Bob’s Market in Santa Monica, alcohols and Wine buyer Rick Rosenbloom held up a 750 milliliter bottle of Veuve Clicquot Brut, one of the store’s most popular champagne brands.
âA month ago it was selling for $ 52 a bottle,â Rosenbloom said Wednesday. “Today it’s $ 69.99, and we’re losing money on it.”
It is not your imagination. Supply chain issues along with higher energy and material costs mean that traditional year-end liquor races are putting a much bigger dent in your wallet than in 2020.
And that is if you are lucky enough to find your favorite libations. Empty shelves are common for the most popular wine, beer and spirits brands, with alcoholic beverages out of stock by around 11% in U.S. stores as of November 28, according to data provider IRI Worldwide.
Demand for alcohol has been strong since the start of the COVID-19 pandemic and prices have risen, although competition has limited the sticker shock, industry experts say.
In November, consumers paid nearly 1% more for alcoholic beverages than a year earlier, according to Labor Department data released Friday. Overall, the consumer price index jumped 6.8% more than expected from November 2020, the highest annual inflation rate since 1982, mainly due to food, energy and housing.
But people who make and import wine, beer, and other beverages are reporting that material shortages and rising costs likely mean more price hikes are on the way.
âAt the moment, no one wants to increase their prices. We have not increased our prices. The tendency has been to absorb that for as long as possible, âsaid Ryan Friesen, chief distiller at Blinking Owl Distillery in Santa Ana, which uses organic California grains to make its products, including vodka, gin, whiskey and aquavit.
âIt’s going to end. You have to, âsaid Friesen, vice president of the California Artisanal Distillers Guild. âIf we absorb an additional increase – and I’m not kidding – of 100% increase in our freight costs, for example, we cannot take that blow indefinitely. “
Friesen’s tip: âKeep your spirits up as long as you can because prices are going to have to go up.
It has even been a challenge for industry veterans such as Rosenbloom, 66. He takes care of all alcoholic beverage storage for his 89-year-old father, Bob, who opened the independent store in 1965.
Rick Rosenbloom is like that neighborhood guy who always knows when it’s about to rain before everyone else. Regarding supply issues or increasing costs, Rosenbloom said “I can smell it coming” which helped the Ocean Park area market stock to avoid the worst of the downturn. the end of the year.
The litany of issues leading to price hikes have become familiar: a cranky supply chain causing delays and increasing shipping rates, higher spending on fuel and other costs, and shortages of bottles, cans and more. other materials.
âThe spirits industry, like many others, is affected by shortages of glass, pallets, containers and [truck] drivers, âsaid Lisa Hawkins, senior vice president of public affairs at the Distilled Spirits Council in the United States..
Major beverage companies have warned prices are on the rise.
At Constellation Brands Inc., whose brands include Corona and Modelo beers and Robert Mondavi wines, managing director Bill Newlands told an investor conference on November 30 that âin the next three to six months, we are probably going to see “single digit inflationary pressures” due to factors such as higher glass and shipping costs.
In October, Campari CEO Bob Kunze-Concewitz told Bloomberg Television the Italian company would be “more aggressive” on pricing due to supply chain issues and higher shipping costs. “We have to react to this because the pressures have really increased,” Kunze-Concewitz said.
Glass and metal are two components hard hit by the COVID-19 pandemic, said Paul Hughes, chemist and assistant professor of distilled spirits at Oregon State University.
âThe shortage of glass and some metals must be due to the large amount of materials needed to make, contain and deliver COVID-19 vaccines,â Hughes said.
Hawkins of the Distilled Spirits Council said switching to a boring bottle isn’t an option in a market where the container is often a mass-produced art form and a key brand statement.
âPersonalized bottles, unique labels and premium packaging are a big part of the overall marketing of spirits products,â she said. âLuxury spirits bottles are often presented on home bar carts or presented as special and one-of-a-kind gifts. “
Even switching to a smaller bottle to deal with product shortages isn’t straightforward, Hawkins said. âModifications to glass bottles often require a change in labels, closures and packaging,â she said.
Bob’s Market – Veuve Clicquot notwithstanding – has kept some prices stable thanks to Rick Rosenbloom’s early warning system of suppliers and brokers, some of whom he has worked with for decades. One example is a New Zealand sauvignon blanc from winemaker Oyster Bay, which he still has a sufficient supply of and hasn’t raised the price to $ 11.99 a bottle.
âI used to buy about half a pallet every three weeks, but as 2021 was down here last summer, I’m starting to feel it, with a few of my smaller New Zealand wines becoming unavailable,â said Rosenbloom.
“And I thought, you know what?” I should probably start stacking Oyster Bay a bit more and got a head start. And it’s a good thing that I did because quite early on, now my supplier is no longer there. It’s only one category, but for us it is a very large category.
The boss, Bob Rosenbloom, would likely win any longevity competition in the grocery business. He started working for his father’s grocery store in the 1940s, during World War II, at the age of 9. Ten US Presidents ago, in 1965 he opened the first of what would become a four-store grocery chain called Bob’s Market. It has since consolidated to the sole location of Ocean Park Boulevard.
Rosenbloom said it was essential for his son to lead the company’s alcoholic beverage business, given the challenges he faces in the rest of the market, including a recent inability to find enough workers.
âThe prices of the goods we use for our supplies have increased dramatically,â said Bob Rosenbloom. âThe only way to get over that is to increase some prices, which creates more inflation. This is our biggest problem.
The packaging is sourced from China and shipping costs have been up to quintupled from pre-pandemic rates, he said.
Meanwhile, Rick Rosenbloom watches as Oyster Bay Sauvignon Blanc quickly leave its shelves.
âI’ve built it up to about 50 Oyster Bay cases, right now I’m probably looking at half of that,â he said. âHopefully enough that my consumers can get through the rest of the year, really getting through this holiday season. Stores that weren’t paying attention and were just buying it week to week will have to start replacing it with this or that, but we won’t have to.