At Bob’s Market in Santa Monica, California, liquor and wine buyer Rick Rosenbloom picked up a 750-milliliter bottle of Veuve Clicquot Brut, one of the store’s most popular brands of champagne.
“A month ago the bottle was $ 52,” Rosenbloom said on Wednesday. “Today it’s $ 69.99 and we’re losing money.”
It is not your imagination. Supply chain problems and higher energy and material costs mean that traditional liquor runs leave a much bigger dent in your wallet by the end of the year than they did in 2020.
And that’s if you’re lucky enough to find your favorite drinks. Empty shelves are common among the most popular brands of wine, beer, and spirits, with alcoholic beverages selling out around 11 percent in U.S. stores as of November 28, according to data provider IRI Worldwide.
Alcohol demand has been strong since the COVID-19 pandemic began, and prices have risen, although competition has contained sticker shock, industry experts say.
According to Labor Department data released on Friday, consumers paid almost 1 percent more for alcoholic beverages in November than a year earlier. Overall, the consumer price index rose 6.8 percent higher than expected from November 2020, the highest annual inflation rate since 1982, mainly due to food, energy and housing.
But people who manufacture and import wine, beer, and other beverages report that prices are likely to continue to rise due to material shortages and rising costs.
“Nobody wants to raise their prices at the moment. We didn’t raise our prices. The trend is to absorb this for as long as possible, ”said Ryan Friesen, chief distiller at Blinking Owl Distillery in Santa Ana, which uses organic California grains to make their products, including vodka, gin, whiskey and aquavit.
“This will come to an end. It has to, ”said Friesen, vice president of the California Artisanal Distillers Guild. “If, for example, we absorb an additional – and I’m not kidding – 100 percent increase in our freight costs, we can’t take this blow forever.”
Friesen’s advice: “Get out there while you can, because prices have to go up.”
It was even a challenge for industry veterans like Rosenbloom, 66. He takes care of all alcoholic beverage stocks for his 89-year-old father, Bob, who opened the independent business in 1965.
Rick Rosenbloom is like that neighborhood guy who always knows when it’s raining before anyone else. When it comes to supply issues or increased costs, Rosenbloom said, “I can smell it,” which helped the Ocean Park area avoid the worst year-end crisis.
The many problems driving price increases are well known: a tangled supply chain leading to delays and increasing shipping rates, higher fuel and other costs, and bottlenecks in bottles, cans and other materials.
“The liquor industry, like many others, is experiencing bottlenecks in glass, pallets, containers and [truck] Drivers, ”said Lisa Hawkins, senior vice president of public affairs for the United States Distilled Spirits Council.
Large beverage manufacturers are warning of rising prices.
At Constellation Brands Inc., whose brands include Corona and Modelo beers as well as Robert Mondavi wines, Chief Executive Bill Newlands said at an investor conference on November 30th, “In the next three to six months we will likely see mid-singles -digit inflationary pressures “due to factors such as higher glass and shipping costs.
In October, Campari CEO Bob Kunze-Concewitz told Bloomberg Television that the Italian company will be “more aggressive” on pricing due to supply chain issues and higher shipping costs. “We have to react to that, because the pressure has really increased,” said Kunze-Concewitz.
Glass and metal are two components that have been hard hit by the COVID-19 pandemic, said Paul Hughes, chemist and assistant professor of spirits at Oregon State University.
“The shortage of glass and certain metals must be due to the sheer amount of materials used to manufacture, contain and deliver vaccines for COVID-19,” said Hughes.
Hawkins of the Distilled Spirits Council said switching to a boring bottle is not an option in a market where the container is often a form of mass art and an important brand statement.
“The custom bottles, unique labels and quality packaging are a big part of the overall marketing of liquor products,” she said. “Luxury spirits bottles are often presented on local bar carts or presented as special, unique gifts.”
Even switching to a smaller bottle to address product shortages is not an easy proposition, Hawkins said. “Changes to glass bottles often require changing labels, caps and packaging,” she said.
Bob’s Market – regardless of Veuve Clicquot – has kept some prices stable thanks to Rick Rosenbloom’s early warning system for 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 they still have in abundance and have not raised the bottle price of $ 11.99.
“I bought about half a pallet every three weeks, but when the pike went down here until last summer in 2021, I start smelling it and a few of my smaller New Zealand wines are no longer available,” said Rosenbloom.
“And I thought you know what? I should probably start piling up more Oyster Bay and I’ve moved on. And that’s a good thing, because my supplier will be out soon. This is only one category, but a very large category for us. “
The chef, Bob Rosenbloom, would likely win any grocery longevity contest. He started working for his father’s grocery store when he was 9 years old during World War II in the 1940s. Before ten US presidents, he opened the first of a four-storey grocery chain called Bob’s Market in 1965. Since then, it has consolidated into a single location on Ocean Park Boulevard.
Rosenbloom said that given the challenges he is facing in the rest of the market, including the recent inability to find enough workers, it is imperative that his son run the alcoholic beverages company’s side.
“The prices of the goods we use for supplies have increased tremendously,” said Bob Rosenbloom. “The only way to overcome this is to raise some prices, which leads to more inflation. That is our biggest problem. “
The packaging is from China and shipping costs have increased up to five times compared to pre-pandemic rates, he said.
Meanwhile, Rick Rosenbloom is watching Oyster Bay Sauvignon Blanc quickly leave its shelves.
“I built it up on about 50 boxes of Oyster Bay, right now I’m probably looking at half of those,” he said. “Hopefully enough for my consumers to get through the rest of the year, just this Christmas season, really. The stores that haven’t been paying attention and have bought it week after week have to start replacing with this or that, but we don’t have to. “