Higher beer prices ahead

Beer prices may soon rise for consumers because of the increasing costs of barley and other raw materials.

The Associated Press story focuses on larger breweries, since they sell most of the beer.

“Raw material costs have gone up so much in such a short period of time, it’s unavoidable that you will see some price increases eventually,” said Morningstar analyst Matthew Reilly.

One of the culprits is barley. The story reports on North American production, but barley/malt prices have also been ramping up in Europe after a tough growing year. That means that even craft breweries that use continental malts also face higher prices.

Meanwhile, input from one craft brewery owner:

The situation may improve later in the year – a prospect smaller breweries are counting on to help with costs. Mark Stutrud, president and founder of Summit Brewery in St. Paul, Minn., said he’s hoping prices fall somewhat in July and August.
“If there’s an increase in the amount that cultivated, that would be good news,” Stutrud said.

Summit Brewery is the third largest brewery in Minnesota and makes more than 60,000 barrels of beer a year, including an extra pale ale popular in the Twin Cities area. Its beers are available from distributors in 13 states in the Midwest and Great Plains.

Stutrud has had to increase costs modestly each year since early 2000 to keep up with price increases and inflation.