Unless otherwise noted, all trends below are for dollar sales within Nielsen U.S. off-premise channels for the one-week period ending 8/1/20 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 was +17.5%.

• Spirits continue to lead growth, up 29%.

• Wine grew 17.3% in dollar sales.

• Beer/FMB/cider growth was at +13.9%. Core beer excluding FMB/seltzer/cider was +7.8%.

“Off premise alcohol growth slowed some for the week ending August 1, but remains in double digits, up 17.5% compared to last year,” said Danelle Kosmal, Vice President of Beverage Alcohol at Nielsen. “We’re seeing a continuation of some trends, including the growth of tequila and wine-based cocktails, as well as newer trends like how beer in the convenience channel is outpacing growth of larger channels, which wasn’t occurring during the earlier days of the pandemic. The bounce back of convenience stores, which is beer’s most important channel, is another sign that consumers have settled into a “next” normal.”

WINE

• For the week ending 8/01/20, the wine category was up 17.3% in Nielsen off premise channels.

• Table wine was up 13.6%, lagging total category growth, whereas sparkling wine grew 32.8% in off premise channels, far outpacing total category growth rates.

  • For the latest week, table wine lost 2.7 share points compared to the same week last year, while sparkling wine and wine-based cocktails picked up share, (+1.2 and +0.7 share points respectively).

  • Wine-based cocktails are nearing triple-digit growth rates again, up 93.6% in off premise dollar sales compared to last year.

ON PREMISE

NOTE: this section is focused on the on-premise (bar, restaurant, taproom, etc. space). Everything else in this report is focused on the off-premise (retail…grocery store, liquor stores, etc.) space.

• Visitation to bars/restaurants for eating and drinking occasions remains flat for the previous two weeks:

  • 42% have been out to eat in the past two weeks and 15% have been out for a drink.

  • With visitation remaining fairly flat it appears we have plateaued out on those consumers willing to return to the on premise before the situation improves. Therefore, outlets may need to look at fresh approaches to reaching out to those who have not returned.

• Visitation for eating by age once again reveals a fairly even split across demographics, revealing that the vulnerability of age does not appear to be a contributing factor to concern over visitation.

  • Drinking occasions for younger people have fallen though, as bar closures have an impact.

  • Both drinking and eating occasions are increasing in New York but are beginning to decline slightly again in Florida (for eating) and Texas (for drinking).

BEER/FMB/CIDER

• In a shift from initial COVID months, beer/FMB/cider in the convenience channel is outpacing growth of larger channels for the fifth consecutive week.

  • For the week ending 8/01/20, beer/FMB/cider grew 16.7% in the convenience channel, while the larger channels of Nielsen xAOC measurement universe (food, drug, mass, club) lagged, up 9.9% in dollar growth compared to the same week last year.

  • This is a reverse in trends from the earlier months of COVID, when consumers were stocking up at grocery and other large-format stores. During the early stages of COVID, growth rates of the grocery channel were close to double the growth rates of the convenience channel.

BEER/FMB/CIDER ACROSS KEY BEER STATES

This week we looked at beer performance in a few key beer states across the country to see where segments and brands are underperforming and over performing. A note that this analysis is looking at Nielsen xAOC measurement universe, which does not include the convenience channel. In this case, the beer/FMB/cider category grew 9.9% in Nielsen xAOC for total U.S.

• As a comparison, we looked across the xAOC channel in California, Illinois, Texas, Ohio, Florida, and New York. So, which states are outpacing total U.S. growth? California leads at +14.3%, followed by Florida at +10%, then Ohio +8.2%, New York +6.4%, Illinois +5.7%, and finally Texas +4.8%.

• What are the primary growth drivers in each of these states?

  • Let’s start with California. The #1 growth driver is hard seltzer, which isn’t exactly a surprise. However, the magnitude of growth is impressive. Hard seltzers contributed to 70% of the category’s growth in CA for the latest week. Hard seltzers represented the top 4 growth brand extensions in CA. The second strongest growth segment in CA was craft beer, up 15% compared to the same week last year. Imports and super premium segments were also strong contributors.

Some other trends to mention:

• Hard seltzers growth rates lagged in IL and NY (although still up very strong double digits in both of those states)

• Craft growth slowed a lot in IL, FL, and New York

• Mexican imports performed strongest in IL, but had the toughest declines in NY

SPIRITS

Spirits continue to lead growth, up 29.0% in Nielsen off premise for the latest week ending 8/01/20 compared to the same week last year.

• Ready-to-drink cocktails once again holds the title of fastest-growing segment, up 100% in off premise dollar sales.

• Cognac and tequila, up 67.3% and 64.3% respectively, continue with strong off premise growth, given their previously strong presence in on premise, which has shifted to off premise.

• Whiskey is still the strongest actual contributor to growth, accounting for 32% of total spirits growth; however, growth rates lag the category, up 27.6% compared to last year.

Tequila is growing at a phenomenal pace in off premise channels, and it is also taking share from other top categories in spirits. For COVID year-to-date (the beginning of March through 8/01/20), tequila has gained 2.2 share points in spirits in off premise channels, and gained 2.6 share points for the latest week of data compared to that same week last year. It isn’t slowing down. Tequila’s growth during COVID is fueled by multiple factors:

• The first is tequila’s growth trajectory prior to COVID. Tequila was the fastest-growing category in on and off premise before COVID, and that trajectory hasn’t changed.

• The second is tequila’s strong presence in the on premise, which now has shifted to the off premise, as drinkers are seeking that same tequila experience, but at home.

• The high end is also fueling growth. Prior to COVID, the ultra premium price tier of tequila was the fastest-growing tier in tequila, and that trend continues during COVID in off premise channels.

• While the long tail of tequila is increasing its presence in the category, there are still just a few brands that are driving most of the growth dollars. For the past five months (COVID YTD), the 5 top growth brands in tequila accounted for nearly 60% of the category’s growth in off premise.