Nielsen: Off-Premise Alcohol Gains Likely to Further Decelerate

Unless otherwise noted, all trends below are for dollar sales within Nielsen U.S. off-premise channels for the one-week period ending 5/30/20 compared to the same week in 2019. We continue to remind our readers that we are only measuring some specific off premise channels, and that the impact of the health crisis on sales is uneven across companies in the alcohol industry.

The year-over-year growth rate for total off-premise alcohol dollar sales within Nielsen measured channels is +22.2%, -1.4% compared to the previous week. This week still captures some pre-Memorial Day movement.

Wine was +24.2% (though -5.5% vs. the prior week).
Spirits again led growth, +32.2% (though -6.8% vs. the prior week). Beer/FMB/cider growth is +18.2% (+2.4% vs. the prior week). Beer specifically is +9.6% (+1.7% vs. prior week).
Sparkling wine growth (+30.6% vs. year ago; -3.3% vs. prior week) again exceeded table wine growth (+21.1% vs. year ago; -6.1% vs. prior week) for this latest week.

Signs of Trends Starting to Shift

750 ml table wine growth rates have now exceeded the 1.5L bottle for 6 consecutive weeks.
Boxed wines growth rates, both 3L and 5L, have decelerated for 5 consecutive weeks, though they still remain up double digits vs. year ago.

Premiumization

Growth of both $20-$25 and $25+ table wine price tiers have remained near or above +40% for the last five weekly periods.
While ‘trading up’ was also a pre-COVID trend, growth rates of these tiers are now well above the others over this period of time, widening the premiumization gap.
Yet as a reminder, while this represents trading up within the off-premise environment, some of that also represents a reduction in price paid from what would have been spent on that same bottle, or glass of wine, in the on-premise pre-COVID.

For the latest 13-week timeframe when COVID-19 heavily impacted consumer behavior (from the week ending 3/7/20 through the week ending 5/30/20), wine is +30.3% 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 13-week timeframe ending 5/30/20, wine is +26.4% in off-premise volume sales vs. one year ago.

In the words of Danny Brager, Senior Vice President of Beverage Alcohol at Nielsen:

“We are moving from the ‘restricted living’ phase of the pandemic to a ‘protracted re-opening’ phase. As a result, it’s likely that we will see further deceleration going forward of the substantial off-premise gains that we had seen over the last three months, but it’s still a long road back to pre-COVID times.”

Overview: Nielsen COVID-19 insights and analysis