After a full year of growth in 2020, the wine category is back into negative territory, down 0.6 percent at the end of 2021’s first quarter, according to SipSource, which tracks wine and spirits depletion data.
After gaining significant momentum in the off-premise, growth dropped from +9% at the end of December 2020 to only +7.3 percent at the end of March 2021. In the on-premise, trends have likely bottomed out at –55.2 percent (February 2021) and should begin to grow in strength in the coming months,” said Dale Stratton, SipSource analyst.
Meanwhile, all geographies experience growth in spirits sales, with the center of the country contributing heavily to that increase. The East North Central division has the highest growth, at +11.0 percent with the South Central division following at +8.4 percent. Growth has accelerated over the last three months in all geographies as we head into very strong comparisons with Q2 2020,” said Stratton.
“The first four months of 2021 have seen significant progress on the reopening of on-premise accounts,” said Stratton. “At the end of April there were 286,604 open on-premise accounts, which means nearly half of accounts lost in 2020 have either been reactivated or replaced. This is an increase of 72,218 reopened accounts since December 2020. This leaves roughly 72,304 needed to open to get back to pre-pandemic levels.”
The just-issued first quarter report goes on to detail on-premise reactivations from a geographic standpoint, as well as highlight the incredible growth of the ready-to-drink category, including in the on-premise.
The Pacific and Northeastern divisions accounted for the highest percentage of closed accounts in 2020 (-61% and -46.9%, respectively) and maintain the slowest growth as of April 2021, still accounting for -14.7% and -14% closure rates as compared to pre-pandemic levels. Meanwhile, the South Central and South Atlantic divisions, which accounted for the lowest account closure rates in 2020 (-27.3 percent and -26.6 percent, respectively) have seen growth of up 25.5% and +17.4%, respectively.
In both the on- and off-premise sectors the Premixed Cocktail category continues to gain momentum, soaring 73.1 percent. Stratton additionally highlights the Premixed Cocktail category as “the only segment that is experiencing growth in the on-premise” meaning it is likely that you’ll be able to find a pre-mixed cocktail on the menu of your favorite restaurant when it reopens.
Stratton attributes the growth to the fact that “these products offer a great vehicle to reduce complexity and expand services” as dining rooms reopen and staffing concerns continue to impact the hospitality industry.
