SALES UPDATE FOR WEEK ENDING JUNE 13TH
The MHW and Nielsen partnership are pleased 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. While the on premise has re-opened to varying extents across the country, off premise volume growth still has to be very significant to offset the on premise losses. 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 6/13//20 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.
As the on premise continues to expand openings across the country and we move from RESTRICTED LIVING to RE-OPENING, trends for alcohol off premise sales have experienced a steady slowing of growth since early May. For the latest week ending June 13th, 2020, total alcohol sales in the off premise were up 21.2% compared to the same week last year. Spirits once again leads growth rates, up 25.1% (falling from +30.5% last week), followed by beer/FMB/cider up 20.3% (compared to +22.3% last week), and wine up 20.1% (reduced from +24.0% last week). This was the first week since the beginning of March that beer/FMB/cider, with the significant tailwinds of hard seltzer, actually grew faster than wine. All off premise alcohol categories continue to outpace total fast-moving consumer goods, which are back into double-digit growth rates, up 10.1% compared to last year.
All eyes will be on sales leading up to the upcoming July 4 holiday and long weekend, within a year unlike any other we’ve seen in our lifetime.
During its peak in April, Beverage Alcohol e-commerce sales levels were 6x higher than comparable weeks of year ago, primarily driven by increases in buyers NEW to alcohol purchases made online. Those increases in June to date have now fallen to 3x higher than year ago, coinciding with a decrease in online alcohol buyers. Growth is still very impressive, but some consumers are likely returning to pre- COVID shopping patterns.
Throughout COVID weeks, an increase in the number of households purchasing alcohol has been one of the primary drivers of growth for off premise dollars. However, in recent weeks, the growth in the number of buyers is beginning to slow, up 14.7% for the 4 weeks ending 6/6/20 compared to those same 4 weeks last year. For a comparison, the number of buyers purchasing alcohol was up 16.2% for the 4 weeks ending 5/5/20 and up 20.5% for 4 weeks ending 4/11/20 compared to last year.
Which channels are driving growth with the increase in buyers for off premise alcohol? Throughout COVID weeks, liquor stores consistently have been driving much of the growth in buyers. The number of alcohol buyers in liquor stores is up 25.4% for the latest 4 weeks compared to last year. Grocery store alcohol buyers are up 14.2% compared to last year. Club buyers are also driving growth, up 17.2% compared to year ago.
We also have seen some recent and interesting trends in the growth of households purchasing items that correlate with celebrations, such as sparkling wine and higher-end wine and spirits. The timing of the spike in the number of households purchasing these celebration items also coincides with Mother’s Day and college graduations.
The green shoots of recovery continue to be evident in the on premise data, with increasing restaurant sales velocity coinciding with re-opening. Sales velocities in the week ending June 13, 2020 from Nielsen CGA RestaurantTrak on premise data (10,000+ transaction level POS feeds from a demographically balanced set of largely independently owned units) improved to -23% vs the pre-COVID norm (for those outlets still open), representing a +175% increase vs the week ending March 28 with significant variation depending upon re-opening dates across the country. The average check value nationally is also continuing its upward trajectory and is now only -8% lower than pre-COVID norms, and up from -50% at its lowest end.
Based on Nielsen CGA surveys over the weekend of June 5-7 in Texas, Florida, New York, and California, of those who drank alcohol in the last 3 months:
30% have been in bars/restaurants primarily for an eating occasion in the last two weeks, and 12% have visited the on premise primarily for a drinking occasion. Of those who have returned for a meal and/or a drink, they are considerably more likely to be young - 43% of 21-34 have been out to eat/22% to drink - compared to 29%/12% of those 35-54 and and 22%/4% of those 55+
Looking ahead to late June, more were planning to visit the On Premise; 35% plan to go out to bars and restaurants primarily for an eating occasion, and 19% for a drinking occasion--with the numbers higher in TX and FL, and lower in NY and CA
67% of consumers claimed to have ordered takeout/delivery of food in the last two weeks, and 14% a delivery that included alcohol.
Beer/FMB/cider dollar sales in Nielsen measured off premise channels grew +20.3%% in the most recent week vs year ago.
Growth rates for nearly all beer/FMB/cider segments are slowing compared to earlier COVID-19 weeks, except for super premiums and FMBs, which have maintained somewhat steady growth rates, up 22.7% and 19.0% respectively for the latest week. Mich Ultra had another strong week, up 29.7% and was the #2 ranked growth brand in the category, after White Claw. Hard seltzer growth rates continue to hover around 250% and maintain share above 10%, accounting for 10.4% of total category dollars for the latest week.
Wine dollar sales in Nielsen measured off premise channels grew +20.1% in the most recent week vs year ago.
The top 100 wine brands - accounting for approximately ⅔ of Nielsen measured off premise channel dollar sales - has seen some change since the beginning of March. Over the 14 weeks through June 6, 2020, 4 brands entered the top 100 that were not there in the year prior - Castello del Poggio, Line 39, Rancho La Gloria, and Whitehaven. But in addition, several other brands - previously in the top 100 - moved up considerably higher within this top sales echelon. Brands that moved up 6 or more placements included (in alphabetical order): Bartenura, Bread & Butter, Cavit, Daily’s Cocktails, Decoy, Gerard Bertrand, Justin, Kim Crawford, Matua, Oliver, Risata, Stella Rosa (now in the top 10), Roscato, Starborough, and Whispering Angel. The brand diversity is remarkable - some non traditional wine types and packaging, strong NZ (Sauv Blancs), Italian, and California representation, an Indiana based winery, sweeter wines, and French rose’s.
Direct to Consumer Wine shipments for the month of May 2020 based upon Nielsen’s partnership with Wines Vines Analytics and Sovos ShipCompliant contained some other interesting insights.
While wines made in the three western states and especially California account for the majority of overall DtC shipments, the highest shipment growth rates (over +50%) were from “remaining” USA - states beyond the big three wine producing states (CA, OR, WA).
By winery size, the highest DtC shipment percentage growth rates were highly polarized, led by the largest wineries at one end (those over 500K cases annually) and the smallest ones at the other (limited production wineries under 1,000 cases annually), with growth for both segments over the last 3 months between +30% and +40% versus year ago. The latter group was much less likely though to make up for its on-site sales losses.
Spirit sales in Nielsen measured off premise channels grew +25.1% versus year ago, the lowest level of growth since the week ending March 14, 2020, but still leading both wine and beer. However, there was also considerable variation among spirit segments. For instance, tequila’s hyper growth remained constant over the last two weeks and RTD’s are still ‘on fire’. On the other hand, while Whiskey growth was still double digits in the current week, its growth was over 10 percentage points less than last week’s growth.
With consistent and very strong growth rates in off premise spirits, we took a look at growth drivers for some of the categories leading growth, particularly tequila. Most of its off premise growth came from category expansion (meaning consumers added tequila to their alcohol set, rather than swapping it out for another segment). As consumers were preparing for initial shutdowns and then longer-term stay-at-home orders, they most likely were stocking their pantries with all types of spirits that they potentially wanted during the shutdown, particularly tequila, which was one of the leading growth segments pre-COVID, and also much more highly developed on premise compared to its off premise share.