Spirits led growth in Nielsen measured off-premise channels, up 27.4% from a year earlier and well ahead of other alcohol categories, and up 3.2% the prior week.
Wine sales are up 14.1% year over year but declined from the previous week (-3.3%), likely largely due to the Easter timing shift. Beer/FMB/cider growth is up 12.3% (-0.9% from the previous week). Beer specifically is up 4.6%.
E-Commerce
Since the week ending March 7, 2020 through April 18, 2020, alcohol e-commerce retail sales have more than doubled vs. one year ago (up 234%), and they have increased almost five-fold in just the latest two weeks of that time period.
Spirits has grown the fastest, while wine continues to be the largest by far, commanding almost 70% of online alcohol retail sales.
In that two-week timeframe, the number of weekly online buyers is approximately three times higher than where they were in a two-week pre-COVID period. The dollar value of each order has increased significantly, commensurate with an increase in the number of units per order.
The increase in the actual number of buyers making purchases of alcohol is driving off-premise growth the most–up 27% for the week ending 4/11/20 compared to the same week last year. Dollar spend on alcohol per buyer is also contributing strongly to growth, but at a slightly lower increase level (up 13.3%) for the week ending 4/11/20 compared to last year.
Nielsen also conducted a survey, fielded March 27-April 17 to our consumer panel, to understand how and why consumers are purchasing alcohol in off premise channels.
Understanding Consumer Buying
Among the 10,000+ beverage alcohol drinkers surveyed, only 17% said they stocked up more on adult beverages in the past month compared to their typical purchasing, while 41% of respondents said they did not stock up at all on alcohol.
However, actual purchase behavior indicates that dollar spend for that group increased by 25% for the four weeks ending April 4, 2020 compared to last year.
Most consumers (69%) said they are purchasing brands they know and trust.
For the latest seven-week timeframe when COVID-19 heavily impacted consumer behavior (from the week ending 3/7/20 through the week ending 4/18/20), we’ve seen the following change in dollar sales in aggregate (from our in-store retail measurement):
Total alcohol: +24.4%
Beer/FMB/cider: +18.9%
Beer, specifically: +11.8%
Wine: +29.4%
Spirits: +32.7%
“Despite deep economic impacts, we continue to see premiumization in the off-premise across all three categories (i.e. the average price per equivalized volume is still ahead of where it was last year),” said Danny Brager, Senior VP-Beverage Alcohol at Nielsen.
“Perhaps we’ll see that slow or reverse in the months ahead, but we also recognize that consumers are transferring money they might have spent on alcohol in a restaurant, bar or tasting room to something they are buying at lower mark-ups from stores or online, or from those on premise establishments that are offering alcohol to go at much reduced prices than ‘normal’.”
Danelle Kosmal, VP-Beverage Alcohol at Nielsen, said:
“Frequent on-premise adult beverage drinkers (pre-COVID) are much more likely than the average adult beverage drinker to purchase alcohol in both brick-and-mortar stores and online.
“Twenty-eight (28%) of frequent on premise drinkers said they purchased more alcohol in the past month at a physical store, compared to 15% of the average drinker claiming to purchase more at a store.
“That frequent on-premise drinker is 60% more likely to have purchased more alcohol in the past month through delivery or pick up from a store, 80% more likely to have purchased online from a bar or restaurant, and 55% more likely to have increased their online purchases from a brewery, winery or wine club, or distillery,” she added..
Beer/FMB/Cider
Beer/FMB/cider growth is up 12.3% (-0.9% from the previous week). Beer specifically is up 4.6%.
Hard seltzers now account for 8% of category dollars, and grew 288% vs. last year. They contributed more than 50% of category dollar growth for the week ending 4/18/20, and they represented eight of the top 10 growth brand extensions for the week. Michelob Ultra and Modelo Especial were the only two non-seltzers in the 10 top growth list.
The premium light segment slowed significantly this week, up 1.5% in dollar sales compared to last year, although Coors Light and Miller Lite remained in the top 15 growth brands for the week. Below Premium (+1.7%) also slowed this week.
Craft and independent craft continue to grow at similar rates, up 5.8% and 5.9% respectively, although independent craft is down slightly in dollar share compared to its average weekly share in 2019 (-0.4 share points).
Hard tea had a strong week, up 28.4%.
Large pack size trends continue, with 24-packs up 19.8% and 30-packs up 20.9%. 6-packs are down nearly 2%, and they lost just over 2 share points vs. their average weekly share in 2019.
Wine
Wine sales in Nielsen measured off-premise channels grew +14.1% in the most recent week vs. a year ago, but decreased -3.3% vs. the prior week, likely as a result of the shift in Easter timing.
At the same time, relative to previous history, the Easter bump last week (+5.3% vs. prior week) was significantly less than the +13% Easter week bump that we’ve seen typically in the past 4 years.
Over the COVID-19 period to date since the week ending March 7, 2020, the segments experiencing the largest uptick in growth compared to the full year ending February 29, 2020 have been 1.5 L and 3L Boxes, as well as 750 ml bottled wine sold at price tiers $20-$25 and $11-$15.
Examining the very large Direct to Consumer (DtC) wine shipment numbers for March 2020 a bit further (as a result of Nielsen’s new partnership with Wines Vines Analytics in collaboration with Sovos ShipCompliant):
Reversing historical trends, volume grew faster than value, as the average price per bottle dropped compared to where it was last March.
Within California, there were large double digits increases from Sonoma and Central Coast wines, vs single digit increases from Napa wines. Napa average bottle prices dropped by close to $6 compared to last year.
Small wineries (those between 5K and 50K cases annually) experienced the largest increase in both percentage and absolute terms (March 2020 vs. March 2019) compared to both larger and even smaller wineries.
Spirits
Spirit sales in Nielsen measured off-premise channels grew +27.4%–well ahead of the other alcohol categories, and +3.2% vs the prior week.
Over the COVID-19 period to date since the week ending March 7, 2020, the segments experiencing the largest uptick in growth compared to the full year ending February 29, 2020 have been:
- 1.75L sizes, while ready-to-drink (RTD) cans (on a lower base) are up triple digits.
- RTD cocktails, tequila and gin are the top 3, with cordials and American whiskey just behind. Gin might be a surprise, but mixers like tonic water are also flying off the shelf.
- Certain cordial segments–including coffee, creams, cognac blends, Amarettos, Aperitifs and other specialty cordials–are selling exceptionally well, as consumers are likely trying different types of mixed drinks, including some maybe ‘flavoring’ their evening coffees.
The segment whose growth vs. a year ago continues to strengthen for each of the last three 4-week periods is cognac, and we’ve noticed both an increase in percentage of households buying and the amount they spend.