No-, Low-Alcohol Volume Seen Growing 28% in U.S. in 5 Years : IWSR

Posted on January 17, 2022 by Joel Whitaker

Once but a sliver of the global beverage alcohol market, no- and low-alcohol beer/cider, wine, spirits, and ready-to-drink (RTD) products grew by more than +6% in volume in 10 key global focus markets in 2021, and now command a 3.5% volume share of the industry, according to a new study published by IWSR Drinks Market Analysis.

According to the new IWSR research, 43% of adults across the focus markets
who have purchased no- and low-alcohol beverages say they are substituting those products in place of full-strength alcohol for certain occasions, rather than abstaining from alcohol overall. The majority of no/low drinkers also enjoy standard strength alcohol too – only 17% of people report they are drinking no/low to avoid alcohol completely. The country with the largest proportion of alcohol abstainers is the
US, with 23% of no/low drinkers avoiding alcohol completely.

Among adults who have purchased no/low alcohol, 37% of people say the reason for doing so is to avoid the effects of drinking alcohol. A third of drinkers buy no/low alcohol because they enjoy the taste.

Among the 10 focus markets examined in the 2022 IWSR No- and Low-Alcohol Strategic Study (Australia, Brazil, Canada, France, Germany, Japan, South Africa, Spain, the United Kingdom, and the United States), the market value of no/low alcohol in 2021 was just under US$10 billion, up from $7.8 billion in 2018.  IWSR forecasts that no- and low-alcohol volume will grow by 8% compound annual growth
rate (CAGR) between 2021 and 2025, compared to regular alcohol volume growth of +0.7% CAGR during that same period.

“While January has become a popular month for people to cut back or abstain from alcohol, interest in no- and low-alcohol drinks has increasingly become a year-round trend among consumers across the world,” says Emily Neill, COO of IWSR Drinks Market Analysis. “To meet that demand, beverage alcohol companies have invested heavily to introduce a number of innovative new products, and many established mainstream brands have recently crossed over to develop no/low alcohol versions of their popular beer, wines, and spirits.”

No-Alcohol is the Growth Driver over Low-Alcohol
Beer/cider is the largest no/low category (at 75% volume share), with no-alcohol beer projected to drive growth at more than +11% CAGR over the study’s 2021-2025 forecast period. No-alcohol RTDs and noalcohol spirits are both expected to post about +14% CAGR volume growth. The wine category is the exception, as the taste of low-alcohol wine is perceived by many consumers to be superior to that of noalcohol
wine. Low-alcohol wine is expected to grow almost +20% CAGR 2021-2025, vs. no-alcohol wine projected at +9% CAGR.

Germany dominates the no- and low-alcohol products in terms of volume.  The amount of no- and low-alcohol products in Germany is more than three times that of the next-largest no/low market, Spain. Both Germany and Spain clocked volume increases of about +2% in 2021, while the US grew by +31% and the UK by +17%. Total volume of no/low products in Japan registered a small decline (-1%) last year.

Among adults who have purchased no/low alcohol, 37% of people say the reason for doing so is to avoid the effects of drinking alcohol. A third of drinkers buy no/low alcohol because they enjoy the taste.

“The no/low alcohol market is still very much in its early growth stage in many categories and geographies, as the sector continues to define itself,” adds Neill. “Brands that will ultimately dominate in the no/low space are those that are successful in navigating the barriers of taste, price, pack format, availability, and overall consumer education.”

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47% Expect to Visit On-Premise More Often in 2022

Posted on January 17, 2022 by Joel Whitaker

That’s according to CGA. which surveyed 1,988 consumers within Florida, Texas, California, Illinois and New York on their expectations, desires and how they plan to behave in the next two weeks.

Over the last two-week period, visitation is down slightly wave-on-wave for food-led (64%) and drink-led (37%) occasions. However, intent to visit for the next two weeks is static for food and increases to 41% for drink-led occasions, CGA said.

A quarter of On Premise visitors have been visiting venues less often than normal over the past two weeks (+11pp vs. December 2021), with this being driven principally by COVID-19 concerns.  Seven out of 10 consumers surveyed, however, said the plan to visit a bar or restaurant in the next two weeks.

Forty-seven percent of On-Premise visitors said they expect to go to restaurants and/or bars more often than they did in 2021, compared to just 10% expecting they will do this less often.

Within the next 6 months, 31% of consumers expect their spending in bars and restaurants will increase.

Consumer confidence in visiting venues is set to increase, with 61% of consumers very confident in visiting small/intimate venues this year (+2pp versus in the next few weeks) and 43% confident in visiting experiential venues (+2pp versus in the next few weeks).

One in five consumers surveyed said they planned not to drink in bars and restaurants for Dry January. So far, two thirds of consumers taking part are sticking with it, with one in five now saying the expect to drink before January ends and 15% no longer taking part.

While traditional, made-to-order cocktails are still the preferred serve type for 52% of category drinkers, a third would prefer RTD or draft cocktails if COVID-19 cases remain high.

Mimosas (32%) were the most popular mixed drink consumed over the holiday period, followed by the festive favorites of Irish Coffee (27%), Eggnog (24%) and Hot Ciders (21%).

“While there is no doubt that it is still a challenging time for the On Premise, the average consumer is showing a lot of positivity around visitation and the channel has come a long way from where we were in Spring 2020, and even compared to this time last year,” Matthew Crompton, CGA Client Solutions Director, Americas, said.  Sixty-one percent of consumers are comfortable visiting the on-premise venues as they normally would and 34% expect their spend to increase in the next 12 months, meaning there’s lots to play for.”

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Japan Recognizes Bourbon, Tennessee Whiskey as Distinctive U.S. Products

Posted on January 17, 2022 by Joel Whitaker

Japan is the 44th country to officially recognize “Bourbon” and “Tennessee Whiskey” as distinctive products of the United States, the Distilled Spirits Council of the United States (DISCUS) said.  

“This recognition ensures that only Bourbon and Tennessee Whiskey that are produced in the United States according to official U.S. standards may be sold in Japan,” said Robert Maron, DISCUS Vice President of International Trade. “Japan ranks as the top export market for American Whiskeys. This action will ensure the integrity of these popular spirits products in this critical market.” 

American Whiskey exports to Japan reached $89 million from January – November 2021, according to the latest data available. Between 2010 and 2020, Japan grew from the fifth-largest export market for American Whiskeys to the top export destination, with American Whiskey exports increasing by nearly 51%.   

“This official recognition will help Bourbon and Tennessee Whiskey exports continue to expand in this dynamic and growing market,” added Maron. 

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Virginia Bill Would End State Stores

Posted on January 17, 2022 by Joel Whitaker

A Virginia lawmaker has filed a bill to do away with the state’s liquor monopoly and end its state store system.

In fiscal 2021, the Virginia Alcoholic Beverage Control Authority generated gross revenue of $1.4 billion from the sale of distilled spirits, Virginia wines and mixers, and the collection of license fees and other miscellaneous revenues from July 1 through June 30., a $163 million increase from fiscal 2020.  For FY 2021, the ABC state store system earned $237.3 million from retail sales.  In addition VABCA collected $294 million in retail taxes and $85.1 million in wine and beer taxes.

During FY 2021, retail sales grew 14.7%, with six new ABC stores generating nearly $4.9 million in sales. ABC oversaw four store remodels and 10 store relocations to growing market areas, enhancing customer service and accessibility. Sunday sales also continued to play a role in the rising revenue, increasing by 11.8% in FY 2021 to $104.9 million.

An increase in online orders was a major contributor at the start of FY 2021 as customers used in-store pick-up, curbside pick-up and next day shipping to maintain social distancing. While the rate of online orders declined over the course of the year as customers returned to in person shopping, online transactions continued to be well ahead of pre-pandemic levels as ABC expanded availability of shipping and introduced same day delivery on a limited basis.

Sales to restaurant and hospitality businesses demonstrate the pandemic’s ongoing impact on these segments of our economy. After being heavily impacted late in FY 2020 as the pandemic started, sales to licensees returned over the course of FY 2021, ultimately reaching historic levels of spirits purchased in the final months of the fiscal year. With the slow growth back to pre-pandemic levels, licensee sales finished FY 2021 at a 5.6% increase over the prior year.

The top five brands purchased in Virginia ABC stores in FY 2021 were:

  1. Tito’s Handmade – domestic vodka
  2. Hennessy VS – cognac/Armagnac
  3. Jack Daniel’s 7 Black – Tennessee whiskey
  4. Patron Silver – tequila
  5. Jim Beam – straight bourbon

Of the five top sellers, Patron Silver tequila saw the most impressive leap in sales, from $20.9 million to $28.9 million, a 38.1% increase, followed by Hennessy VS cognac from $46.9 million to $52.8 million, a 12.6% increase. Tito’s Handmade vodka sales also increased from $52.3 million to $57.9 million, a 10.5% increase over FY 2020.

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Where to Buy N95s, KN95s, and Surgical-Style Masks in 2022

Posted on January 17, 2022 by Joel Whitaker

Where to Buy N95s, KN95s, and Surgical-Style Masks in 2022

With the CDC now saying we all need better masks, we found this post from The New York Times’ Wirecutter newsletter worth reading.  I don’t think it’s enough simply to have a brand, retailer and price.  We all need to understand how these things work and what makes one better than another.  So scroll on down until you come to the section “The research.”  Knowledge is power.

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Boston Beer Projects Earnings Per Share to Fall Dramatically

Posted on January 13, 2022 by Joel Whitaker

Boston Beer Co. said it projects earnings per share for fiscal 2021 will be somewhere between a loss of $1 and a profit of $1.  That’s down dramatically from the company’s previous project of $2 to $6.  “The estimated lower shipment growth is primarily a result of more aggressive wholesaler inventory reduction than expected, primarily affecting Truly,” the company said. “Additionally, due to higher-than-expected supply chain costs, which include costs for additional damaged and expired inventory resulting from the lower shipment volumes, we estimate gross margins to be lower than expected.”

It also said it estimates:

  • Depletions increase of between 21% and 22%.
  • Shipments increase of between 15% and 16%.
  • National price increases of between 2% and 3%.
  • Gross margin of between 38% and 40%.
  • Increased investments in advertising, promotional and selling expenses of between $85million and $95 million. This does not include any changes in freight costs for the shipment of products to the Company’s distributors.
  • Non-GAAP effective tax rate of approximately 43%, excluding the impact of ASU 2016-09.
  • Estimated capital spending of between $145 million and $150 million.

The company didn’t change its guidance for 22022.

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