SALES UPDATE FOR WEEK ENDING JULY 11TH
The MHW and Nielsen partnership continue to provide you with the latest weekly update for beer, wine, and spirits sales in Nielsen measured off premise channels along with our commentary. Again, please note that this represents retail sales in certain key off premise trade channels - not ALL trade channels. As you all know, while the on premise had begun to re-open to varying extents across the country, there have been pauses and/or retreats more recently, and so off premise volume growth will have to still be very significant to offset on premise declines vs year ago. We'll be watching these shifts carefully along with our on premise partners (Nielsen CGA). As always, a reminder that this also represents a total category view - and we recognize that the impacts on individual companies within the alcohol industry are not equal.
TOTAL BEVERAGE ALCOHOL
Unless otherwise noted, all trends below are for Nielsen off premise channels for the week ending 7/11/2020 compared to the same week in 2019. We continue to remind our readers that we are only measuring sales in some specific off premise channels, and that the impact of the health crisis on sales is uneven across companies in the Alcohol industry.
Growth trends are back in the double digits for alcohol in Nielsen measured off premise channels. Total alcohol is up 17.3% in dollar growth for off premise channels for the week ending 7/11/20 compared to the same week last year, well up from the +11.8% posted last week, largely due to stronger beer/FMB/cider growth as the latest week likely captured the full impact of the July 4th weekend. The overall +17.3% increase for Alcohol is about double the growth rate of total Fast Moving Consumer Goods (+8.8%).
Spirits lead growth, up 25.5%, which is still significantly above wine +16.6%, and beer/FMB/cider +14.9%. Total alcohol sales for off premise channels are down 14.1% compared to the prior week, but that is expected, given the sales volume for the July 4th holiday week that was the prior week. Core beer (excluding beyond beer segments of FMBs, seltzers, etc.) fared a bit better this week, up 7.6% in off premise dollars compared to the same week last year.
Online sales continue to play a role in off premise growth for alcohol. For the COVID weeks ending 6/27/20 (beginning the first week of March), online off premise alcohol dollar sales grew 309% compared to that same time period last year. Week-over-week, alcohol was the fastest – or one of the fastest – growing categories in ecommerce channels. We should note, however, that alcohol is also one of the smallest categories in ecommerce channels, so there is a lot of opportunity for growth.
Across total consumer goods, click & collect growth rates have exceeded those of delivery, up 95% and 39% for the week ending July 4, 2020. Growth rates for click and collect alcohol have maintained triple-digit growth throughout COVID.
Across the three categories in alcohol, wine maintains the bulk of the share of online alcohol sales, however, spirits has been growing faster and gaining share throughout COVID impacted weeks. The challenge of course for beer is to identify ways to gain a bigger piece of that online pie.
Based on Nielsen CGA RestaurantTrak data (comprised of c15,000 independent restaurant operators and smaller groups), after a slight dip in overall restaurant sales for the July 4 weekend, the On Premise at a Total US level saw week on week growth again (+4%), but the performance varied by state. A common thread across all states is that key cities have and continue to fare worse than the rest of their respective state.
On Premise velocity is -30% lower than last year in the week to July 11 in outlets that are operational, but it does represent a +184% increase compared to March 28 when the On Premise shutdown commenced. Average check value is also continuing its upward trajectory and is now only -7% lower than it was a year ago.
The growth engine of hard seltzers continues with triple-digit growth, up 149% in off premise channels for the week ending 7/11/20 vs year ago. Hard seltzer dollar share of the category is 11%, down from the previous week’s record-breaking share of nearly 12%, but up slightly from the several weeks prior to July 4th. Truly lemonade mix pack continues to make waves, and is the second biggest growth driver among brand extensions, with Mich Ultra as the first and White Claw variety pack #2 as the third.
The latest week of off premise data also looks better for super premiums (driven by Mich Ultra) at +19.6%. Crafts are also back to double-digit growth, up 10.6%, and Mexican imports had a slightly better week, up 8.2%, which is still much lower than the COVID YTD dollar growth rates for Mexican imports, which is 16.8%. As we discussed last week, out of stocks are most likely driving the slowing of growth for Mexican import beer. Other segment performance: premium lights +5.0%, FMBs (excluding seltzers) +6.7%, cider +2.3%, and below premium -1.6%, which was the only segment in the category to have negative growth trends.
Wine dollar sales in Nielsen measured off premise channels grew +16.6% in the most recent week vs year ago, up slightly from last week’s +15.6%.
Sparkling wines continued to grow faster than table wine - in fact, while earlier on in the health crisis, sparkling wines were lagging, it’s been eleven consecutive weeks now where sparkling wines have grown in excess of table wine, and often by substantial margins. During the last six weeks for instance, sparkling is up 31.1%, almost double that of table wine growth, and imports (both Champagne and Prosecco) are contributing to that. This suggests that sparkling wine, just like pre-COVID, is a strong segment, and that a large number of consumers are still celebrating many occasions, but just transferring those celebrations from a restaurant or bar to ‘around the home’.
Latest Direct to Consumer (Dtc) wine shipment numbers for June 2020 from Nielsen’s partnership with Wines Vines Analytics in collaboration with Sovos ShipCompliant showed a hefty dollar increase +31%, and an almost +40% increase on volume, again depressing the average price vs year ago. This is now the fourth consecutive month where volume growth exceeded value, although the June gap was not as large as April or May. And on the encouraging side, the 31% increase in dollars was the highest of the last four months. The total 12 month value of DtC wine shipments is now creeping up on $3.5 billion in sales.
Segments trailing overall DtC shipment growth were wines from Napa and Washington state, while Sonoma, Oregon, and Rem U.S. (wine producing states beyond CA, OR, and WA) posted substantial gains well ahead of the total category
Spirits’ growth of +25.5% continues to lead the other beverage alcohol categories by a wide margin, almost 10 points better than wine or beer/FMB/cider.
Leading with growth at minimum +50% and for some much more are RTD (+71.6%), Tequila (+69.4%), and Cognac (+53.1%). Vodka just managed to stay out of single digit territory with dollar growth of just +10%, well behind the overall spirits category.
The higher Ultra Premium spirits tier continues to outperform the growth rate of the other price tiers below it, with growth rates generally above +50% for most weeks. Remember again that all those consumers who might have ordered a cocktail in a restaurant or bar are able to save a significant amount of money when they buy a bottle of the same liquor or drink components, at a store or online, and have that drink at home. So purchase of an ‘expensive’ bottle of their favorite spirits might still represent a significant savings if that’s the case, OR some consumers may just want to ‘treat’ themselves and unwind.