SALES UPDATE FOR WEEK ENDING MAY 23RD
MHW with its partnership with Nielsen 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, and while there are some re-openings across the country, off premise growth still has to be massive to offset the on premise losses. We, along with our on premise partners (Nielsen CGA), will be watching these shifts carefully, but it will likely be a slow journey back. 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 5/23/20 compared to the same week in 2019. This week includes partial sales for the days leading up to Memorial Day. Note that given receipt timing of retailer data, we will see the full impact of Memorial Day in the data for the two week period ending 5/30/20 vs two weeks of year ago. After several weeks of very strong off premise sales, and now with on premise establishments beginning to re-open at different rates across the country, growth rates for alcohol slowed for the week ending 5/23/20, which is the week leading into Memorial Day weekend. Total alcohol off premise dollar sales grew 24.8% compared to the same week last year, a rate lower than what we had reported for each of the last four weeks. Spirits continue to lead growth at 33.1%, followed by wine at 27.2%, and beer/FMB/cider at 20.9%. Off premise alcohol sales continue to lead total fast moving consumer goods (FMCG) growth rates, which is growing at a slower pace of 11.7%.
Under a full lockdown situation and even with ‘alcohol to go’ allowed, Nielsen has estimated that off premise volume sales would need to maintain at least 22% growth rates to offset the on premise losses. Spirits and wine have managed to maintain those volume growth rates, while beer/FBM/cider has remained below that threshold. COVID-19 12 weeks to date (since w/e March 7, 2020) volume % chg vs year ago: Spirits: +32.6% Wine: +27.1% Beer/FMB/Cider: +17.5% As the on premise begins to emerge from lockdown and some consumption shifts back to those channels, that 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. For the latest week, we are starting to see some very ‘small’ signs of changing consumer/shopper behavior. Consumer spending is an entirely different matter. Given the massive shift from on premise to off premise and concurrent reductions in the price consumers pay in these two channels, overall consumer dollars are down double digits. e-COMMERCE SALES Online alcohol sales remain strong, up again in the 250% range for the week ending 5/23/20 compared to the same week last year, and the 10th consecutive week of triple digit growth. A few further e-commerce highlights include: ● Over the ten week period through week ending 5/23/20, Wine represented just under 70% of online alcohol sales dollars, but Spirits grew the fastest, and is now up to 22% share of alcohol online sales. Beer is well behind at just a 10% share. ● While new online buyers are the strongest contributor to growth of online alcohol sales, basket size is also a major contributor. The average basket size for an alcohol purchase in brick and mortar stores for 4 weeks ending 5/16/20 is $23, compared to an average basket size of $68 for alcohol in online purchases. ● The largest ‘age’ demographic contributor to alcohol online sales are those 35-44, accounting for 29% of dollars over the COVID period, versus 23% pre-COVID, well above their overall share of overall legal age drinkers. ● E-commerce brand leaders are not necessarily consistent with store purchased brand leaders - across the top 10 brands in each channel - only 2 brands are in each of the top 10 lists for spirits, 5 for wine, and - more consistently - 8 for beer.
BEER/FMB/CIDER While beer/FMB/cider growth rates are lagging growth rates of wine and spirits, overall dollar contribution from the beer category is much higher than the other two categories in Nielsen measured off premise channels. Beer accounts for nearly $180 million in growth for the latest week, while wine and spirits combined account for about the same -- $190 million in growth in Nielsen off premise channels. ● Leading into Memorial Day, Beer had its strongest week in sales to date for 2020, bringing in more than $1 billion in off premise sales for the week ending 5/23/20. This represents the second strongest sales week in the past year, with July 4th 2019 only slightly ahead. ● The big winner for the week of course was again hard seltzers, up 272% in off premise dollar sales, and reaching over 10% share (10.1%) of the category. For all COVID weeks together through May 23, 2020, hard seltzers have a growth rate of 326% and 8.2% dollar share of the category. White Claw was once again the top growth brand for the entire beer/FMB/cider category. White Claw and Truly combined accounted for nearly 1/3 (32%) of total category growth dollars. ● Other winners among top growth brands for the category include Mich Ultra, Bud Light Seltzer, Modelo, Bud Light, and Coors Light. ● Growth rates across key segments include: premium lights slowing to +8.2%, below premium +4.0%, craft +14.8%, FMBs (excluding seltzer) +18.0%, Mexican imports +19.8%, cider +9.4%, hard tea 32.1%, kombucha 89.2%, and non-alcoholic beer +37.4%. ● Across pack sizes, 12 packs are leading growth +40.9%, followed by 36 packs +40.3%, 30 packs +26.1%, and 24 packs +21.8%. Large packs – including 12 packs – continue to gain share, with 24/30/36 packs in aggregate up 2.0 share points compared to pre-COVID time periods, and 12 packs up 5.3 points in dollar share. This is all mostly at the expense of singles and 6 packs.
WINE Wine dollar sales in Nielsen measured off premise channels grew +27.2% in the most recent week vs year ago - just under the overall 12 week COVID to date growth of +30.8%. Within table wine by key producing state and country of origin over the COVID period to date, Italian table wines have maintained a significant lead, even more impressive given that it’s the largest imported country - so its strong growth comes from a large base! Over most COVID impacted weekly periods now, $20-$25 priced wines have led all others in growth in Nielsen measured off premise channels, and over the last 3 weeks, the $25+ tier has finished a strong second. Within the much more ‘premium’ DtC Wine Shipment channel, there has been an inverse relationship over the last couple of months to price - less expensive wine tiers (<$30) have grown significantly faster than more expensive tiers ($30-$50, and $50-$100, though both of these still posted double digit gains), while at the upper end (>$100), both value and volume were in decline. These DtC shipment trends are likely a combination of newer or less frequent buyers participating in this channel, along with suppliers offering wines at reduced prices to stimulate demand. SPIRITS Spirit sales in Nielsen measured off premise channels grew +33.1%, again well ahead of the other alcohol categories, and like the other categories, just under the overall 12 week COVID to date growth. While Spirits was also growing faster than wine or beer pre-COVID, it’s likely that some of its growth lead since then is a function of its higher on premise share of alcohol than in the off premise, and a transfer of demand as restaurants and bars shuttered for ‘on’ the premises eating and drinking. Similar to the past few weeks, growth was again led by three segments - RTDs, Tequila, and Cordials - and since the beginning of April their growth has really stood out from the others. It’s no coincidence that for both Tequila and Cordials, their share was significantly higher in the On Premise compared to the Off Premise pre COVID (16.2% vs 9.2% in the case of Tequila, and 12.4% vs 7.3% in the case of Cordials), so both have benefited from demand transfers on to off premise. While Gin had been one of the more surprising growth segment leaders in some earlier weeks, its current growth rate is now not too dissimilar from the total spirits category. There was further evidence of lower levels of large pack buying growth than in earlier COVID weeks. While 1.75L sales are still well above year ago, 750 ml size growth exceeded that of the large size for the 4th consecutive weekly period.