Spirits continued to lead growth, up 38.8% in the week ended May 16 from the like year-earlier week, but down 8.9% from the previous week. That’s according to Nielsen, which finds wine was up 30.8%, but down 3.7% from the prior week, and beer/FMB/cider saw sales rise 25.5% from the 2019 week, but down 2.3% from the previous week.
Off-premise alcohol sales exploded, soaring 141.5% year-over-year.
For the 11 weeks when Covid-19 heavily impacted human behavior in the U.S., total alcohol sales off-premise are up 27%. Beer/FMB/cider are up 27.1% (beer alone is up 13.8%), wine is up 31.1% and Spirits is up 36.1%
Despite these strong numbers, consumers are spending a lot less on bev/al than before Covid-19. First, for the most part, bars and restaurants remain closed or with severe occupancy limits, and, second, it’s to be expected that consumers would trade down.
“While volume sales of total off-premise alcohol continue to be strong, consumer spending is an entirely different matter. Given the massive shift from on-premise to off-premise and concurrent reductions in the prices consumers pay in these two channels, overall consumer dollars spent on alcohol are still down significantly,” said Danny Brager, senior vp-beverage alcohol at Nielsen.
“Large pack sizes for beer/flavored malt beverages/cider continue strong year-over-year growth from previous weeks, with 30-packs +33.1% and 12-packs +46.6% for the week ending May 16,” said Danelle Kosmal, VP-Beverage Alcohol.
“And as we’ve seen through our sales data, hard seltzers continue to explode, and our consumer research echoes that. Among all buyers purchasing hard seltzer during Covid weeks, 44% of them were new to hard seltzer, meaning they hadn’t purchased hard seltzer in the entire year prior to March 2020 (including the summer seltzer craze of 2019). This reflects an interesting dynamic — that while many trends are pointing to consumers purchasing existing brands they know and trust, there is also a subset of consumers that are willing to try new (or new-to-them) products.”
Looking at the numbers from Nielsen in brief:
Beer/FMB/Cider sales are up 25.5%. Excludng FMBs and cider, beer alone is up 16.3%.
Hard seltzers now account for 9.1% of total category dollars, and continue on the path to reach 10% share this summer. Year over year, hard seltzers grew 311% in the week, but that’s almost meaningless because it’s off a very small base.
While premium lights and below premium beers continue in the black, up 12.6% and 6.5% respectively, both are losing share compared to pre-COVID time periods. The premium light segment lost 1.5 share points since pre-COVID time periods, and below premium is down 2.4 share points.
Mexican imports are up 26.8%, super premium is up 24.2%, craft is up 19.7% (independent craft slightly behind at +18.9%). FMBs (excluding seltzers) are up 27.7%.
Large packs continue to drive growth, with 30 packs +33.1% and 24 packs +32.5%, vs 6 packs which are growing at 13.1%.
Twelve packs continue to play an important role, up 46.6%. Here are some contributors:
- In the early weeks of COVID, hard seltzer share of growth was ~55-60%; however, in recent weeks it has dropped to the low 50s.
- Segments that are seeing a greater contribution to 12 pack growth in recent weeks include budget, premium lights, premium regulars, and super premiums.
- With Cinco de Mayo sales captured in recent weeks, imports are also seeing a greater share of growth for 12 packs than initial COVID weeks.
Wine
For the seventh consecutive week, wine dollar sales in Nielsen measured off-premise channels were up 30% or more. In the most recent week, wine was up 30.8%. Sparkling wine in particular had another very strong week (+41.8%), well above the growth rate of table wine (+26.7%), which was still strong.
In the case of canned wine, since the start of the health crisis, the lowest individual weekly growth rate was +52%; each of the last three week’s growth was above +70%. And in each of the four individual weeks, 375 ml wine bottles have grown over +60%.
The $20-$25 price tier continues to lead off premise growth in Nielsen measured channels, aligning with continuing off premise premiumization.
On the Direct to Consumer (DtC) side though, the average price of a bottle of wine in April 2020 was $33 in the current month, a significant drop from $42 a year ago. It’s likely this is a combination of ‘new’ buyers in this channel coming in at lower price points than existing buyers, and suppliers reducing prices on some of their products to stimulate demand and replace lost tasting room business, Nielsen’s analysts said. .
Within Nielsen measured off premise channels, the ‘big’ keep getting ‘bigger’ in wine – the top 100 wine brands, which accounted for 65% of pre-COVID sales dollars, have accounted for just over 70% of the COVID period year-over-year growth.
Spirits
Spirit dollar sales in Nielsen measured off premise channels grew +38.8%, again well ahead of the other alcohol categories.
Within beverage alcohol overall, spirits are better developed in the on-premise space, and so it’s likely that a portion of its more rapid growth is a function of transferred demand from restaurants and bars shuttered for on-premise eating and drinking, Nielsen said.
Growth was again led by three segments: ready-to-drink (RTD) cocktails, Tequila and cordials.
Cognac growth has continued to strengthen — for seven consecutive weeks its growth rate vs year ago has risen, including the most recent week, in contrast to most other segments whose growth rates generally decelerated in the current week.