Off-premise sales measured by Nielsen in the week ended July 18 were up 19%, with distilled spirits leading the charge, up 29.3%. But wine and beer/FMB/cider all showed strong growth, up 19.7% and 15.4%, respectively.
“While growth rates have ebbed for all three categories, coinciding with on premise re-opening to varying extents, spirits has clung on to its earlier growth better than either beer or wine, while the latter’s growth has decelerated the most,” said Danelle Kosmal, vp-beverage alcohol at Nielsen. “That may be attributed to some business moving back to the more wine-friendly restaurant environment, which is less impacted by new closures than bars.
Looking at just those more recent growth rates may be a better indication of what we’ll potentially see through the end of the summer, and maybe even into the fall, as consumers settle into their new normal.”
Overall on-premise sales velocity (average dollar sales per the average on-premise outlet in Nielsen CGA measurement) in U.S. outlets that are currently operational is down -28% vs last year in the week to July 25. Compared to March 28, when the on-premise shutdown commenced, sales velocity is +205%. Average purchase/transaction value is -9% compared to pre-COVID norms, up from -50% at its lowest.
“It’s worth noting that restaurant sales velocities over the last few weeks are more stable now than what we saw previously, but that these numbers are specific to dining locations, and not the much less stable ‘bar’ environment,” Nielsen said.
Beer/FMB/Cider
Total beer/FMB/cider was up 15.4% in dollars and 12.% in volume for the July 18 week. Core beer (excluding beyond beer segments) is up 8.6% in dollars. Every segment in the beer category is back to positive growth rates in off-premise channels, likely due to the shift back from on-premise with the second round of closures.
Considering the tough comps from the summer of seltzers in 2019, the segment continues to grow at phenomenal rates, up 142% compared to the same week last year, Nielsen said. Seltzers accounted for 45% of the total category growth.
Growth rates for other key beer segments for the week ending July 18 were: super premium +20.6% with Michelob Ultra once again the top growth brand extension for the category: craft +12.6%; Mexican imports +7.2%, premium light +6.4%, FMBs +5.0%, and below premium +0.4%.
The beer/FMB/cider category had a strong week in the convenience channel, up 18.4%, outpacing growth rates for the grocery channel, which were up 15.4%.
SETTLING INTO THE NEXT NORMAL
For some segments, there were distinct differences in trends during the restricted living time period compared to the re-opening time period. Total beer/FMB/cider growth during the restricted living time period was up 21.8% in dollar growth. That slowed to +16.6% in the re-opening period (to date). Here are segments and channels that saw some of the biggest shifts from the restricted time period to re-opening:
Segments that haven’t shifted as much between the two COVID time periods or phases include super premium, premium light, craft, and non-alcoholic beer.
Wine
Wine dollar sales in Nielsen measured off premise channels grew +19.7% in the most recent week vs year ago, up from last week’s +16.8%.
Comparing growth rates between the earlier restricted living period and the more recent re-opening period:
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Package size growth rates are showing a very big swing: earlier in the pandemic period, consumers shopped in stores infrequently and sought larger packages, and so we saw larger packages (e.g. 1.5L bottle, 3L and 5L boxes) growing quickly. Those growth rates have subsided significantly, though the 3L box is still up 30% during the past seven weeks vs year ago. Cans and 375 ml bottles are both growing in the 50% range during that same time period.
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Within just bottles, growth of the lower price tiers ($11 and under) have receded substantially. Growth rates of price tiers in the $11-$20 range are still substantial, but reduced versus where they were earlier, while growth rates of price tiers $20-$25 and $25+continue to be the highest, and steadiest. A reminder again, consumers moving their product purchase from on to off premise are saving large sums of money when that happens.
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Unlike table wine, sparkling wine growth rates have, if anything, accelerated as consumers have settled into their ‘new normal’ and moved their celebrations from the on premise into or around the home.
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By channel, while generally growth rates predictably decelerated moving into the re-opening weeks, the Convenience channel was the only one that maintained consistent high rates of growth across the two time periods suggesting a steadier shopping pattern.
Spirits
Spirits’ growth of +29.3% continues to lead the other beverage alcohol categories by a wide margin, and continues to gain share within the total beverage alcohol space. Comparing growth rates between the earlier restricted living period and the more recent re-opening period:
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Segments where growth has slowed much faster than the total spirits category (but still growing): American whiskey; cordials; gin; rum; vodka
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Segments where growth has increased moving into Re-opening: cognac; Scotch; Japanese whisky
And how about the two clear sub-category winners:
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RTD cocktails: +89% in the first three months vs year ago; and +81% over the last seven weeks. Cans now represent around ⅓ of the RTD category over the last 52 weeks, with now triple digit growth
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Tequila: +67% in both periods of time
A few other interesting nuggets:
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Across the various off premise channels Nielsen is tracking, in those selling a large array of fast moving consumer goods as well as alcohol such as the Grocery channel, spirits growth rates decelerated moving into the re-opening period. On the other hand, growth rates are more consistent across the two time periods in more specialized channels, such as the Liquor and Convenience channel. And in fact, growth rates in the Convenience channel are higher than any other.
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Package size growth rates are showing a very big swing: earlier on consumers shopped in stores infrequently and sought larger packages, and so we saw the 1.75 Litre grow faster than the 750 ml bottle, but that has now reversed. And smaller sizes (all the way from the 50 ml to 375 ml) are growing faster now than they did in the first three months
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