The record levels of inflation have forced American consumers of alcohol and tobacco products to switch from Budweiser and Marlboro to cheaper, economy brands such as Icehouse and Eagle 20’s, according to a report.
Retailers are reporting that customers are increasingly preferring more cost-effective beer brands such as Busch Light, Icehouse and Milwaukee’s Best Ice.
In the four weeks that ended on July 2, retail sales of economy beer ticked up by 5.4% compared to the same period last year, according to Nielsen data that was commissioned by beer-industry consultant Bump Williams Consulting Co.
The study was cited by The Wall Street Journal.
By comparison, retail sales of economy beer dropped last year by 10.9%.
Marvin Hamama, 39, who lives in the Ypsilanti, Michigan area, told the Journal that because of inflation, he has ditched his usual choice of Corona or Pacifico beer in favor of Icehouse.
While one serving of Corona costs $2.99 before tax, an Icehouse costs just $1.29.
“I don’t like the cheap stuff, but sometimes you still go for it,” Hamama, a marijuana cultivator, told the Journal.
Smokers are also shunning more expensive options like Marlboro in favor of discount brands including Eagle, Pyramid, and Montego — all of which are manufactured by Vector.
Xcaliber International, the producer of economy cigarette brands such as 24/7, Edgefield, and Berley, is reporting substantial sales growth this year — chipping away at Marlboro’s market dominance.
Xcaliber brands cost about half as much as Marlboro.
“Consumers are much smarter than they were, and they’re more price-conscious,” company co-owner Lee Levinson told the Journal.
“They just got smarter in how to spend their money.”
Research is showing that those with means continue to spend money on premium, imported brands such as Modelo Especial, whose sales continue to grow.
The government’s consumer price index soared 9.1% over the past year, the biggest yearly increase since 1981, with nearly half of the increase due to higher energy costs.
The Bureau of Labor Statistics reported that the price beer, ale, and malt beverages rose 4.3% in June compared to a year ago.
The price of cigarettes surged by 8.1% in June.
