Spirits again led growth in off-premise sales, up 33.1% from a year earlier, 8.1% from the prior week, Nielsen reported. Wine was up 27.2%, but down 1.9% vs. the prior week. Beer/FMB/cider growth is up 20.9% from a year earlier and up 7.4% vs. the prior week. Beer specifically is up 11.8% from a year earlier, 6.1% from the prior week.
For the latest 12 weeks when COVID-19 heavily impacted consumer behavior (from the week ending March 7 through the week ending May 23, Nielsen has measured the following change in dollar sales in aggregate (from our in-store retail measurement):
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Total alcohol: +26.8%
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Beer/FMB/cider: +21.6%
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Beer, specifically: +13.6%
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Wine: +30.8%
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Spirits: +35.8%
Under a full lockdown situation and even with ‘alcohol to go’ allowed, Nielsen has estimated that U.S. off premise volume sales would need to maintain at least 22% growth rates to offset the on-premise losses. Spirits and wine have managed to maintain those volume growth rates, while beer/FBM/cider has remained below that threshold. For the 12 weeks ending May 23, the percentage change in off-premise volume sales vs. one year ago is:
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Spirits: +32.6%
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Wine: +27.1%
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Beer/FMB/Cider: +17.5%
E-commerce Highlights
Online off-premise alcohol sales are up 248.3% year-over-year for the one-week period ending May 23. This is the 10th consecutive week of triple digit growth.
Over the ten weeks ending May 23, wine represented just under 70% of online alcohol sales dollars, but spirits grew the fastest, and is now up to 22% share of alcohol online sales. Beer is well behind at just a 10% share.
While new online buyers are the strongest contributor to growth of online alcohol sales, basket size is also a major contributor. The average basket size for an alcohol purchase in brick and mortar stores for the 4-week period ending May 23 was $23, compared to an average basket size of $68 for alcohol in online purchases.
The largest ‘age’ demographic contributors to alcohol online sales are those 35-44, accounting for 29% of dollars over the COVID period, versus 23% pre-COVID, well above their overall share of overall legal age drinkers.
Danny Brager, Nielsen’s Senior VP-Beverage Alcohol said: “As the on-premise space begins to emerge from lockdown and some consumption shifts back to those channels, that 22% volume sales threshold number will change; however, the shift is likely to be slow and extended over a long period of time, due to both social distancing requirements and large variances in individual consumer confidence.
“Meanwhile, e-commerce remains strong for alcohol–and interesting, leading brands in e-commerce dollar sales are not necessarily consistent with those in our in-store retail channels. When considering the top 10 selling brands across each of beer/wine/spirits separately for in-store and online, the number of brands that are on that list for both in-store and online are just 2 for spirits, 5 for wine and–more consistently–8 for beer.”
Danelle Kosmal, VP-Beverage Alcohol added: “While beer/FMB/cider growth rates are lagging growth rates of wine and spirits, overall dollar contribution from the beer category is much higher than the other two categories in Nielsen measured off-premise channels. Beer accounts for nearly $180 million in growth for the latest week, while wine and spirits combined account for about the same–$190 million in growth in Nielsen off premise channels.
Hard seltzer reached an important milestone this week: more than 10% share of total off-premise dollar sales within the beer/FMB/cider category.”
Beer/FMB/Cider
Beer/FMB/cider dollar sales growth is +20.9%. Beer specifically is +11.8%.
Leading into the Memorial Day holiday, beer had its strongest week in sales to date for 2020, bringing in more than $1 billion in off-premise sales for the week ending 5/23/20. This represents the second strongest sales week in the past year, with July 4th, 2019 only slightly ahead.
The big winner for the week was again hard seltzers, up 272% in off premise dollar sales. For all COVID weeks together through May 23, 2020, hard seltzers have a growth rate of 326% and 8.2% dollar share of the category.
Growth rates across key segments include: premium lights slowing to +8.2%, below premium +4.0%, craft +14.8%, FMBs (excluding seltzer) +18.0%, Mexican imports +19.8%, cider +9.4%, hard tea 32.1%, kombucha 89.2%, and non-alcoholic beer +37.4%.
Across pack sizes, 12 packs are leading growth +40.9%, followed by 36 packs +40.3%, 30 packs +26.1%, and 24 packs +21.8%. Large packs – including 12 packs – continue to gain share, with 24/30/36 packs in aggregate up 2.0 share points compared to pre-COVID time periods, and 12 packs up 5.3 points in dollar share. This is all mostly at the expense of singles and 6 packs.
Wine
Wine dollar sales in Nielsen-measured off-premise channels grew 27.2% in the most recent week vs year ago, just under the overall 12 week COVID to date growth of 30.8%.
Sparkling wine growth (+36%) again exceeded table wine growth (+23.8%) for this latest week. Italian table wines have maintained a significant lead–which is even more impressive given that it’s the largest imported country, so its strong growth comes from a large base.
Over most COVID impacted weekly periods, $20-$25 priced wines have led all others in growth in Nielsen measured off-premise channels, and over the last the weeks, the $25+ tier has finished a strong second.
Within the much more ‘premium’ DtC Wine Shipment channel, there has been an inverse relationship over the last couple of months to price — less expensive wine tiers (those wines under $30) have grown significantly faster than more expensive tiers ($30-$50, and $50-$100, though both of these still posted double digit gains), while at the upper end (>$100), both value and volume were in decline.
These DtC shipment trends are likely a combination of newer or less frequent buyers participating in this channel, along with suppliers offering wines at reduced prices to stimulate demand, Nielsen said.
Spirits
Spirit sales in Nielsen measured off premise channels grew 33.1%, again well ahead of the other alcohol categories, and like the other categories, just under the overall 12 week COVID to date growth.
While spirits were also growing faster than wine or beer pre-Covid, it’s likely that some of its growth lead since then is a function of its higher on-premise share of alcohol than in the off-premise, and a transfer of demand as restaurants and bars shuttered for ‘on’ the premises eating and drinking.
Similar to the past few weeks, growth was again led by three segments — RTD cocktails, tequila, and cordials — and since the beginning of April their growth has really stood out from the others. It’s no coincidence that for both tequila and cordials, their share was significantly higher in the on-premise compared to the off-premise pre COVID (16.2% vs 9.2% in the case of Tequila, and 12.4% vs 7.3% in the case of Cordials), so both have benefited from demand transfers on to off premise. While gin had been one of the more surprising growth segment leaders in some earlier weeks, its current growth rate is now not too dissimilar from the total spirits category.
There was further evidence of lower levels of large pack buying growth than in earlier Covisd weeks. While 1.75 liter sales are still well above year ago, 750 ml size growth exceeded that of the large size for the 4th consecutive weekly period.