USA sees five-fold rise in online alcohol sales

Online sales of alcohol in the US have risen almost five-fold this month compared to the same period last year, as consumers who frequently drank in bars and restaurants embrace e-commerce during the coronavirus lockdown, according to Nielsen.

Online alcohol sales in the US have risen five-fold in the two weeks to 18 April compared to same period in 2019

In a report on alcohol sales across the US released yesterday, Nielsen highlighted how drinkers who were regular consumers in the on-trade have driven a surge in online alcohol sales since the lockdowns began in mid-March.

Looking at total alcohol sales from the beginning of March until April 18, Nielsen recorded that e-commerce retail sales have than doubled versus one year ago (+234%), and have increased almost five-fold in just the latest two weeks of that time period.

In terms of categories, the greatest rate of growth in online sales has been seen in spirits, although wine continues to have by far the largest share of e-commerce, commanding almost 70% of internet alcohol retail sales, according to Nielsen.

The data analyst also recorded a three-fold increase in the number of buyers using the web to stock up on alcohol during  the two-week period until April 18, compared to a two-week pre-Covid period.

Nielsen also noted that the dollar value of each online order has increased significantly, commensurate with an increase in the number of units per order. 

Considering this trend, Danelle Kosmal, vice president of beverage alcohol at Nielsen, suggested that the growth in web-based drinks sales was being driven by consumers who visited bars and restaurants regularly, but were now of course unable to due to the coronavirus lockdown measures, which has seen the on-trade shuttered for the time being.

“As we learned from our consumer survey, 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,” he began.

“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,” he added.

Continuing, he recorded, “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.”

In conclusion, he said that it was vital that companies harness the spend of these consumers. “Understanding how the frequent on-premise drinker is purchasing alcohol in off-premise channels now will be increasingly more important, particularly as suppliers, restaurants, and breweries lean on creative ways to engage this consumer group,” he said.

Meanwhile, in the UK, Mintel pointed out that the sudden increase in shoppers turning to the web to buy food and drink would last well beyond the lockdowns, and represented a long-term change in consumer buying habits.

Mintel’s latest research* has revealed that the online grocery market is forecast to grow by 33% in 2020 to reach an estimated value of £16.8 billion, up from £12.7 billion in 2019. This huge increase follows four consecutive years of slowing growth: in 2019 growth fell to a historic low of just 2.9%. The market is set to be worth £17.9 billion by 2024, growing by 41% over the five year period.    

Such a forecast comes as Mintel highlights a dramatic change in online shopping habits over the coronavirus lockdown period, habits that Mintel believes could prove lasting.

In the very early days of the spread of the coronavirus in the UK, before social distancing measures were announced, 7% of Brits increased the total amount of online shopping (both food and non-food)**. In the space of fewer than two months, online shopping has seen a dramatic boost with the number of consumers who say they’ve increased their online shopping rising to 36%***.

Meanwhile, 50% of Brits have tried to limit the time they spend in-store, while a further 9% have used click-and-collect more ***.

Nick Carroll, Associate Director of Retail Research at Mintel, said: “Over the course of just a few months, Covid-19 has had a seismic impact on Britain’s grocery sector.

He continued, “The pandemic is giving a significant short-term boost to online grocery services, as shoppers look to avoid stores and limit their contact with the outside world. However, the impact will last beyond the crisis. Shopper numbers in the online grocery market have plateaued in recent years as retailers struggled to get new customers to try these services.”

He added, “The outbreak is bringing a new audience to online grocery, and this should boost the market long term with strong growth forecast through to 2024.”

Finally, he commented, “While there is currently a significant disruption to the online grocery market, with some retailers not accepting new customers, this will ease in the short-term as more capacity is brought online.”

*Mintel’s latest estimates as of 23 April 2020; subject to change based on ongoing research and economic shifts.

** Research conducted 28 February-13 March

*** Research conducted 16-23 April