New Buyers and Large Basket Size Fuel Alcohol eCommerce Triple Digit Growth

Nielsen Beverage Alcohol Practice reports that year-over-year growth rate for total off-premise alcohol dollar sales within Nielsen measured channels is +24.8%, +5.4% compared to the previous week.

Unless otherwise noted, all trends below are for dollar sales within Nielsen U.S. off-premise channels for the one-week period 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 one year ago.

Wine was +27.2% (-1.9% vs. the prior week).
Spirits again led growth, +33.1% (+8.1% vs. the prior week). Beer/FMB/cider growth is +20.9% (+7.4% vs. the prior week). Beer specifically is +11.8% (+6.1% vs. prior week).
Sparkling wine growth (+36%) again exceeded table wine growth (+23.8%) for this latest week.
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-which is 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, $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.

For the latest 12-week timeframe when COVID-19 heavily impacted consumer behavior (from the week ending 3/7/20 through the week ending 5/23/20), wine is +30.8% in dollar sales in aggregate (from our in-store retail measurement).

Under a full lockdown situation and even with ‘alcohol to go’ allowed, Nielsen has estimated that U.S. off premise volume sales would need to maintain at least 22% growth rates to offset the on premise losses. For the 12-week timeframe ending 5/23/20, wine is +27.1% in off-premise volume sales vs. one year ago.

“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,” says Danny Brager, Senior Vice President of Beverage Alcohol at Nielsen.

E-commerce Highlights

Online off-premise alcohol sales are +248.3% year-over-year for the one-week period ending 5/23/20.
This is the 10th consecutive week of triple digit growth.
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 the 4-week period ending 5/16/20 was $23, compared to an average basket size of $68 for alcohol in online purchases.
The largest ‘age’ demographic contributors 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 remains strong for alcohol-and interesting, leading brands in e-commerce dollar sales are not necessarily consistent with those in our in-store retail channels,” says Brager. “When considering the top 10 selling brands across each of beer/wine/spirits separately for in-store and online, the number of brands that are on that list for both in-store and online are just 2 for spirits, 5 for wine and-more consistently-8 for beer.”

Overview: Nielsen COVID-19 insights and analysis