Unless otherwise noted, data and insights below are for the week ending March 20, 2021, compared to the same week last year in NielsenIQ off-premise channels.
March 31st – We are now a few weeks into lapping the peak pantry-loading weeks from 2020. As we report out regular updates over the next few weeks, there will be a lot of negative numbers. However, it is important to provide some context behind these numbers and recognize the unique purchasing dynamics during March/April 2020. At this time last year, because of mandated closures and restrictions within bars and restaurants, there were massive shifts in volume from these on-premise channels, resulting in record-high sales across beer, wine, and spirits in off-premise channels. With these year-ago comparisons, it would be unrealistic for current off-premise sales to outpace or even approach the unprecedented growth from last year. For this reason, we often will include sales trends compared to two years ago, as a benchmark to more “normal” sales volumes.
“At this time last year, because of mandated closures and restrictions within bars and restaurants, there were massive shifts in volume from these on-premise channels, resulting in record-high sales across beer, wine, and spirits in off-premise channels. With these year-ago comparisons, it would be unrealistic for current off-premise sales to outpace or even approach the unprecedented growth from last year. While these year-ago comparisons may seem bleak, sales for off-premise alcohol remain far above typical sales prior to the pandemic.” – Danelle Kosmal, Vice President of Beverage Alcohol at NielsenIQ
For the latest week ending 3/20/21, total off-premise alcohol dollar sales declined by 20.4% compared to the same week last year. Wine growth was -29.7%, spirits growth was -21.2%, and beer/FMB/cider declined by 15.2%. While these year-ago comparisons may seem bleak, sales for off-premise alcohol remain far above typical sales prior to the pandemic.
Dollar sales for off-premise alcohol for the week ending March 20, 2021 are up 23% compared to the same week in 2019. While more bars and restaurants are opening across the country, there still remains an imbalance of volume in off-premise retail channels. Breaking this down by category in off-premise compared to two years ago, spirits are up 39%, and wine and beer/FMB/cider are each up 18% compared to the same week in 2019.
For the week ending March 20, nearly all segments in beer experienced double-digit declines compared to the same week last year. Premium lights were down 21.6%, below premium -23.3%, craft -23.1%, cider -27.0%, and FMBs excluding seltzers -12.7%. Imports had minimal declines, with total imports down 5% and Mexican imports down 4%. The three segments still up from last year’s peak sales? Hard seltzer growth is nearly flat, up 1%, while hard tea is up 26.8%, and no-alcohol beer is up 17.2%.
Across the category, large pack sizes experienced the strongest declines for the latest week, with 30 packs down 40.3% and 24 packs down 29.4%. However, as a reminder, last year at this time large packs were growing at extraordinarily high rates, so now they are facing equally extraordinarily high comps. On the other hand, small packs had minimal growth at this time last year, and therefore have more manageable comps, with 6 packs down 8.7% and singles up 1.3% for the latest week. These trends are less a reflection of current performance and more a reflection of last year’s stand-out growth segments.
Convenience channel was the only channel with positive growth trends, up 1.8%. This also is a reflection of last year’s performance and comps, as c-stores were growing at a much slower pace than other channels during this time last year.
While overall growth for Spirits is down 21.2%, there are a few segments that remain up. Ready-to-drink cocktails continue with triple digits (+134%), cognac is up 19%, and tequila is up 3.5% for the week ending March 20, 2021 in off-premise channels. Gin experienced some of the strongest declines, down 32.8%. However, remember that gin experienced a bump in sales during the initial weeks of the pandemic last year (up 88.8% for week ending 3/21/20), so again, we are comparing to difficult comps. Brandy is down 28.5%, cordials down 11.0%, rum -35.2%, vodka -36.6%, and whiskey -21.%, with American whiskey down 26.8%.
All price tiers in spirits declined compared to year ago. Premiumization in off-premise spirits continues, with ultra premium experiencing the slowest decline, down 1.7%, compared to the premium price tier at -22.9%, mid price tier at -33.1% and value at -25.3%.
Total wine declined by 29.7% this week, driven by table wine (-33.8%), while sparkling wine was only down 0.9%. Although these declines seem large, total volume is still up significantly compared to two years ago (+18.4% vs 3/23/19). Most segments and varietals saw declines, with wine cocktails (+69.9%) and non-alcoholic wines (+36.8%) being some of the few areas showing growth. From a package perspective, there is growth among some of the alternative pack types including cans (+24.9%) and tetra (+2.7%), while more traditional formats like 750ml glass (-28.3%) are driving declines.
Most channels are seeing sharp declines, but convenience (while small) is a bright spot, seeing growth of 3.7%. While all price tiers are declining, we do see that the higher the price point, the less significant the decline. Wines over $25 were down 7.1% compared to wines under $11, which declined 39.3%.
Penetration remains about 1.5-2 pts above monthly norms from 2019. For March and April 2021, we should expect off-premise alcohol penetration rates to remain stable, with similar levels as February, at about 30%-31% penetration. It’s unlikely that we will see an extreme drop in households purchasing off-premise alcohol in the next few months.
The average dollar spend per buyer in the off premise has remained high above norms throughout the pandemic, driven mostly by dollar spend per trip, as opposed to consumers taking more trips. For March and April 2021, we should expect consumer off-premise dollar spend on alcohol to remain at a similar level as Jan & Feb 2021, with slight increases in April, following typical seasonality trends.
March 5-8, 2021 NielsenIQ’s on-premise partner, CGA, surveyed 1 584 respondents (drank alcohol in the past 3months and were out in the on premise) in New York, Illinois, California and Texas. Below are some highlights from that survey.
- The same venues remain popular as consumers go out after their first outing. However, fine dining restaurants become the third most popular venue (27%) behind independent restaurants (45%) and casual dining chains (44%). This shift moves them ahead of neighborhood bars (24%).
- Drinks with food leads as the top occasion for going out to bars and restaurants (47%) highlighting the popularity of the more casual occasion. However with 29% visiting for treat/rewards and celebrations there remains trade up opportunities.
- Visiting bars and restaurants with a partner/spouse remains a key group on visits after venues reopened, but visitation with friends and family becomes equally as important especially for 21-34 year olds. 50% have been out with friends since reopening and just 40% with a partner or spouse