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According to Nielsen CGA measured channels, the year-over-year growth rate for total off-premise beverage alcohol dollar sales are up 24.8%.
In addition, Nielsen’s E-commerce measurement powered by Rakuten Intelligence claims online off-premise beverage alcohol sales were up 141.5% year-over-year for the one-week period ending May 16, 2020.
In the week ending May 23, spirits sales were up just over 33% (an 8% increase over the previous week), and wine fell to just over 27% (a nearly 2% drop from the previous week).
During the 2020 pandemic lockdown, for 12 weeks up to May 23, off-premise spirits dollars were up overall nearly 36% and wine nearly 31%.
Still, Danny Brager, Nielsen’s beverage alcohol senior VP said, “Given the massive shift from on-premise to off-premise and concurrent reductions in the prices consumers pay in these two channels, overall consumer dollars spent on alcohol are still down significantly.”
Nielsen has estimated that the United States (US) off-premise beverage alcohol volume sales would need to maintain at least 22% growth rates to offset on-premise losses.
Brager again: “As the on-premise space begins to emerge from lockdown and some consumption shifts back to those channels, that 22% volume sales threshold number will change; however, the shift is likely to be slow and extended over a long period of time, due to both social distancing requirements and large variances in individual consumer confidence.”
Nielsen also claims e-commerce remains strong for beverage alcohol, but leading brands in e-commerce dollar sales are not consistent with in-store retail channels. Of the top ten selling brands across each of wine and spirits for in-store and online, only two spirits brands and five wine brands share space both online and in-store.
Off-premise table wine growth in the week ending May 23 was 23.8% and Sparkling wine was up 36%. In the 750 ml bottle segment, $20-$25 continues to lead the off-premise growth; in the three weeks preceding May 23, over $25 bottles led the pack.
Since the start of the health crisis, the lowest individual weekly growth rate for canned wine was, astonishingly +52%; each of the previous three week’s was above +70%.
In April 2020, Direct to Consumer (DtC) wine sales significantly declined in the average price of a bottle from $42 a year ago to $33. Nielsen speculates a combination of new, less frequent buyers may have homed in on lower price points, plus suppliers reduced some prices to stimulate demand and replace lost tasting room sales.
Nielsen’s report tells us the top 100 brands, which accounted for 65% of pre-pandemic off-premise sales dollars in year-over-year growth, have accounted for just over 70% during lockdown.
Hard seltzers also grew—by a whopping more than 300%, and now accounts for just over 9% of total category dollars—expected to reach 10% this summer.
At the end of 2019, Nielsen did an analysis to understand hard seltzer buyers. The study showed a majority of hard seltzer dollars generated by buyers expanding their beverage alcohol purchases to include seltzer. Hard seltzer off-premise sales between 3/1/20-4/25/20 shows hard seltzer buyers more than doubled compared to the same time period in 2019—44% of that increase was from new hard seltzer consumers, but 68% of the dollars spent came from existing, pre-pandemic seltzer buyers. Overall, Nielsen’s report says, “Hard seltzer buyers during COVID-19 are spending less of their total alcohol dollars on beer and wine compared to the same time period last year.”
Nielsen CGA recently looked at consumer perceptions within states that have already lifted shelter-in-place restrictions. Between May 22-26, 1,300 consumers were surveyed from Miami, Orlando, Tampa, Houston and Dallas, and it appears social distancing isn’t having much of a negative effect on consumer on-premiss visits.
88% of consumers were satisfied with their overall on-premise experience with social distancing measures in place; 34% have been on-premise three times or more in the last two weeks of May 2020.
Casual dining chains have received 40% of diners, followed by independent restaurants at 35%. Bars and restaurants for drinks with food attracted 42% of consumers, with 32% visiting on-premise spots for ‘relaxed/quiet drinks.’
Younger consumers top the list of on-premise returnees: 27% of 21-34, compared to 16% of 35-54, and 6% of over 55.
In the five cities of Texas and Florida 33% of consumers have gone out to eat in a bar/restaurant in the last two weeks—16% have been in for a drinking occasion.
Among those who have yet to get back into the on-premise scene, before returning 45% say they need more time to feel comfortable, 22% are self-isolating, 19% are worried about their financial concerns, 41% require outdoor seating and 40% want to be sure social distancing measures exist.
In my next post, I will talk about on-premise reopening.
