Nielsen: US wine sales shift towards big brands and boxed wines

The US off-trade saw a shift towards big brands and boxed wines, the latest data from Nielsen shows, as sales of alcohol continued to see double digit growth despite slowing down since the height of the Covid-19 pandemic.

US liquor store (Photo: iStock)

US off-trade sales of alcohol grew 17.5% in the 12 months to 1 August, the latest figures from Nielsen have shown, but growth has tailed off since the height of the Covid-19 crisis.

Spirits sales saw the largest boost in the latest 12 month figures, rising 29%, with wine still showing strong growth of 17.3%. Core beer sales grew only 7.8%, but when the figures including cider, flavoured malt beverages (fmb) and hard seltzers, this rose to 13.9%.

Although this represents strong double digit growth, alcohol sales have tailed off since the height of the crisis – growth in the ‘Covid-19 period to date (covering the week ending 7 March to 1 August) was 23.6% in value, compared to only 3.5% in the 52 weeks to 29 February 2020.

During this period, spirits saw sales growth of 33%, wine of 25.9% and total beer, fmb and cider of 19%, with volumes up 28.%, 21.1% and 15.4% respectively.

Danelle Kosmal, vice president of Beverage Alcohol at Nielsen pointed out that despite the slow down, growth remained in double digits, compared to last year and that some trends had continued.“We’re seeing a continuation of some trends, including the growth of tequila and wine-based cocktails, as well as newer trends like how beer in the convenience channel is outpacing growth of larger channels, which wasn’t occurring during the earlier days of the pandemic. The bounce back of convenience stores, which is beer’s most important channel, is another sign that consumers have settled into a “next” normal.”

Shift to brands and boxed wines

Drilling down, wine sales were dominated by sparkling wine, up 32.8% in the off-trade, while table wine lagged the category on 13.6% growth, losing 2.7 percentage points in the latest week’s figures, compared to the same time period last year. Wine-based cocktails were also in strong growth, with sales of 93.6% in the off-trade.

Nielsen also looked at the performance of the top table wine brands in the 9 weeks to 3 August, which showed the brands were in strong growth compared to the same period in 2019 – representing 26% of sales, compared to 10% last year.

It also showed that larger formats and boxed wine grew, and there was a shift away from private label, as consumers bought into larger brands. Eight wine brands made it into the top 15 this year, including Black Box, Woodbridge, Barefoot, Apothic and Kendall Jackson Vintner’s Reserve, while private label fell off the list completely.

Spirits

RTD cocktails proved the fastest-growing segment of the spirits category, up 100% in the off-trade, while the shift from on to off-trade also favoured cognac, up 67.3% and tequila, which saw “phenomenal” growth, Nielsen said, fuelled by ‘multiple factors’.

“Tequila is growing at a phenomenal pace in off-premise channels, and it is also taking share from other top categories in spirits,” the report said, pointing to a 2.2 share point gain in off premise spirits, and a 2.6 share point gain in the latest week of data compared to that same period last year.

“It isn’t slowing down… Tequila was the fastest-growing category in on and off premise before COVID, and that trajectory hasn’t changed.”

It added that while it was increasing its presence in the category as customers sought to replicate the on-trade experience at home, growth was being driven not only by the ultra-premium end, but also by only a handful of brands.

“For the past five months (COVID YTD), the 5 top growth brands in tequila accounted for nearly 60% of the category’s growth in off premise,” Nielsen said.

Overall, whiskey was the largest contributor to overall growth of the category, representing 32% of  all growth, but its sales of 27.6% lagged the category.