Brewing Uncertainty: Outlook for Beer’s Key Ingredients, Pricing, and Portfolio Strategy

Want to stay ahead of the signals reshaping agri-food supply chains? Join us for our next live webinar on April 28, a platform demo and product update covering what's new and what's coming. Register here.

Beer is navigating one of its most complex periods in recent memory. Rising input costs, shifting consumer behavior, and growing competition from adjacent categories are converging in ways that make traditional planning assumptions increasingly unreliable. This was the topic of our recent Helios AI webinar featuring two industry experts:

Randy Browne - Founder of randybrowne consulting and formerly Category Insights Leader at Molson Coors, anchored the demand and retail narrative, covering macro consumer behavioral trends, retail channel dynamics, and the economic forces reshaping beer category performance at scale.

Francisco Martin-Rayo - Co-Founder and CEO of Helios AI, anchored the supply and climate intelligence side, translating what is happening in barley, hops, and wheat growing regions into forward-looking price and disruption signals.

Here is what they covered.

Dollar Growth Is Masking a Volume Problem

Beer dollar sales continue to rise, but don't be fooled. Volume is flat or declining in many markets. The culprit is cumulative price increases moving through the three-tier system: suppliers raise prices, distributors and retailers layer on their own, and consumers end up paying significantly more per unit. Mix shift toward above-premium products amplifies this effect, making topline results look healthier than underlying consumption trends actually are.

The risk: this mask eventually comes off. Continued price increases suppress demand over time, reduce household penetration, and give retailers reason to allocate shelf space and promotional dollars toward faster-growing categories.

Does Pack Size Determine Price Sensitivity?

Not all SKUs carry the same elasticity. Premium 24-packs and 30-packs are among the most price-sensitive configurations in the portfolio, with significantly less consumer tolerance for repeated increases than smaller packs of above-premium brands. Getting the price-pack curve right and understanding where elasticity thresholds sit by brand and format is increasingly a core revenue management capability, not a nice-to-have.

Are Gen Z and Health Trends Permanent Headwinds for Beer?

The health and wellness headwind is real and durable. Among Gen Z in particular, consumption behavior within an occasion has become more experimental, mixing beer, non-alcoholic beer, mocktails, and water rather than committing to a single beverage. Affordability plays a role too: younger consumers have less buying power, which shapes the overall volume they drive in any given evening.

What makes this harder to reverse is timing. The 21-28 age window is when beer habits form, and volume lost during that period is difficult to recapture later. Older generations moderating for health reasons are not offsetting the shortfall. Add a Surgeon General warning on alcohol consumption into the mix, and you have a structural headwind that is not going away.

Recession Resilience Is No Longer a Safe Assumption

Beer was historically considered recession-resistant. That assumption deserves scrutiny now. The combination of health trends, more alternatives including THC/hemp products and functional beverages, and sustained price increases means that a recessionary environment may not produce the consumption stability it once did. Planning teams should stress-test their volume models against a broader range of scenarios.

Can Non-Alcoholic Beer Scale Beyond a Niche?

Non-alcoholic beer is one of the few genuine growth segments in the category. Improved taste profiles have driven meaningful adoption, and major suppliers have followed early movers with mainstream brand extensions. But context matters: non-alcoholic beer is still under 3% of total beer volume in most markets, and under 1% in some. Retailer shelf space is constrained, and the segment is likely to consolidate around a small number of top performers rather than sustain a long tail of smaller brands.

Roughly 80% of non-alcoholic buyers also purchase regular beer, making this less of a substitution story and more of an occasion expansion play for the right brands.

Input Costs Are Adding Another Layer of Pressure

Fertilizer prices have moved significantly, from the high $300s/low $400s per ton up to the high $600s, with reports that growers are actively reconsidering planting decisions as a result. Transportation costs remain elevated. A scenario of 12-18% input cost inflation through end of 2026 into 2027 is not off the table. Larger players are better positioned to absorb these increases; smaller and craft-focused businesses face a more difficult margin environment with fewer levers to pull.

What Does This Mean for Strategy?

Portfolio breadth, revenue management discipline, and organizational flexibility are the differentiators in this environment. Businesses that can cover more occasions, optimize price-pack architecture, and move quickly on shifting signals will be better positioned than those running narrower playbooks built for more stable conditions.