Pricing    |      Beverages  |     Global

The company owns some of the world’s most prominent spirits brands. With the U.S. government imposing tariffs on various countries, the German entity grew concerned about potential retaliatory tariffs from the EU on US exports, posing a direct threat to its American whiskey portfolio.

To address this uncertainty, the company sought to model various price increase scenarios, assessing the sensitivity of its portfolio and shopper switching behavior.

If the manufacturer was forced to raise shelf prices due to higher tariffs, it wanted a clear understanding of consumer reaction to financially plan for various outcomes.

The manufacturer was looking to estimate possible market share loss to competitors and to find price points that limit shopper switching behaviour.

Using the Buynomics software, the manufacturer simulated a range of price increase scenarios to evaluate the impact on unit sales, market share and revenue.

They also examined possible competitor moves. The simulations included isolated price increases on the company’s American whiskey products, as well as scenarios where the entire American whiskey market mirrored those increases.

1. 15% price increase on own products

2. 15% price increase on own and competitor products

1. Low Price Elasticity

The American whiskey portfolio showed low price elasticity, particularly when the entire market raised prices simultaneously— indicating a relatively positive consumer response to price hikes.

2. Category Switching Behavior

Most consumers who stopped buying the company’s American whiskeys either exited the alcohol category altogether or switched to a different type of alcohol, rather than to other whiskey types.

3. Minimal Increase in Promotional Sales

The share of sales made on promotion only slightly increased with higher prices, suggesting a limited negative impact on profitability.

4. Unexpected Shift to Scotch

Among those who did switch to other whiskey brands, most opted for Scotch rather than Irish whiskey—likely due to stronger brand presence and availability in that segment.

Buynomics is the leading Revenue Growth Management (RGM) platform for holistic optimization across all revenue levers.

By integrating multiple data sources with cutting-edge AI, it empowers RGM teams in enterprise organizations to make faster, more profitable, data-driven, and customer-focused decisions.

Holistic Approach

Portfolio optimization considering the effects of all product portfolio changes.

Predictive accuracy

Best in class predictive accuracy of up to 95%* of expected market behavior.

Speed to insight

Large number of scenarios compared in minutes, reducing the time spent on forecasting by 70-90%.

Profitability

Up to 2-4% higher gross profits through a better offering.

* Depending on data quality and completeness