Slideshow

US lockdown alcohol sales: the latest trends

04 May 2020 By Patrick Schmitt

We bring you the latest trends in alcoholic drinks sales in the US since the coronavirus lockdowns began, including the performance of wines, beers and spirits in both offline and online retail.

Using Nielsen data released last month, the following figures show off-trade sales for the week ending 18 April this year compared to the same period in 2019, as well as data comparing the Covid-19 affected timeframe, which means the period starting 7 March and ending 18 April.

Overall, total alcohol sales in the US off-trade are up 16% during the overall lockdown period compared to 2019, although the figure for the latest week is slightly down, just 0.6%, on the previous week.

The main trends can be seen below in volume terms, with more detailed analysis over the following pages.

Spirits has been the biggest riser since Covid-19 led to the closure of bars and restaurants in the US, with this category leading growth in Nielsen measured off-premise channels, at +27.4% (well ahead of other alcohol categories), and +3.2% vs. the prior week.
Wine sales are +14.1% year over year but declined from the previous week (-3.3%), which, Nielsen noted, was likely largely due to the Easter timing shift.
Beer/FMB/cider growth is at +12.3% (-0.9% from the previous week), with beer specifically up +4.6%.

General consumer insights

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 11 April this year 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 rate (up 13.3%) for the week ending 11 April compared to last year.
Nielsen also conducted a survey, fielded March 27 to 17 April, to its consumer panel, to understand how and why consumers are purchasing alcohol in off premise channels.
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 behaviour indicates that dollar spend for that group increased by 25% for the 4 weeks ending 4 April, 2020, compared to last year.
Most consumers (69%) said they are purchasing brands they know and trust.

Trends in value

For the latest seven-week timeframe when Covid-19 heavily impacted consumer behaviour (from the week ending 7 March through the week ending 18 April), Nielsen has recorded the following change in dollar sales in aggregate (from its in-store retail measurement):

Total alcohol: +24.4%
Beer/FMB/cider: +18.9%
- Beer, specifically: +11.8%
Wine: +29.4%
Spirits: +32.7%

Danny Brager, senior vice president of beverage alcohol at Nielsen, commented:

“While the weeks of March 14 and 21 (huge purchasing stock-up) and March 28 (retrenchment) swung wildly between weeks, the week-to-week sales levels since then have been much more consistent – reflected in the latest week ending April 18, 2020.

“Despite deep economic impacts, we continue to see premiumisation in the off-premise across all three categories (i.e. the average price per equivalised volume is still ahead of where it was last year). Perhaps we’ll see that slow or reverse in the months ahead, but we also recognise 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’.”

Beer/FMB/cider trends

Beer/FMB/cider growth is at +12.3% (-0.9% from the previous week). Beer specifically is +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 18 April, and they represented 8 of the top 10 growth brand extensions for the week (Michelob Ultra and Modelo Especial were the only 2 non-seltzers in the 10 top growth list).

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The premium light segment slowed significantly during the week ending 18 April, 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 in 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 Nielsen has seen typically in the past four 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%, which was 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 29 February, 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 ‘flavouring’ 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 the percentage of households buying and the amount they spend.

E-commerce

Finally, 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.

As previously reported by db, 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.

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 commented.

For more information visit the Nielsen Covid-19 site by clicking here.