Massive Channel Shifting Continues: Off-Premise and Online Sales Surge
April 15, 2020
Nielsen reported that alcohol sales were up 25 percent in off-premise channels in the week ending April 4, with less week-to-week volatility (up only +4 percent versus the previous week’s sales).
The spirits and wine categories continued to lead with the strongest growth rates, up 33 percent and 32 percent respectively in the week ending April 4, compared to the year prior.
Online sales of alcoholic beverages continued to climb with increases of 246 percent through March 21; 291 percent through March 28, and 441 percent through April 4. By comparison, e-commerce sales across all departments tracked by Nielsen were up 41 percent in the most recent week.
“No one has ever seen the kind of channel shifting we’re seeing now. It’s totally unprecedented,” Danny Brager, Nielsen's senior vice-president, beverage alcohol practices said.
The general premiumization trend continued, with average wine prices up 2 percent in the week ending April 4, Nielson also reported.
As noted previously, given the collapse of restaurant sales, alcoholic beverage volume growth needs to be up 22 percent to just get back to flat total industry levels. Data indicates volume growth between March 7 and April 4 was up 17 percent for beer and cider, up 29 percent for wine, and up 33 percent for spirits.
Online Sales Volume Offsets On-Premise Collapse
Nielsen pieced together a broader view of March wine sales by combining wine sales data from Nielsen’s retail off-premise sales measurement, Nielsen’s e-commerce measurement representing online merchants and DTC shipments from Wines Vines Analytics/Sovos ShipCompliant. That report showed dollar sales increases of just more than 30 percent in March 2020, enough to offset on premise declines.
Newly released Direct to Consumer (DTC) wine shipments for March 2020 from Nielsen’s new partnership with Wines Vines Analytics in collaboration with Sovos ShipCompliant also showed a high level of increases also consistent with significant channel shifting
DTC shipments in March 2020 totaled $423 million, a little over 20 percent of the size of Nielsen’s measured off-premise channel for March.
DTC shipments in March 2020 rose 18 percent in dollars versus the year prior, and an even higher 30 percent by volume. March 2020 shipment levels were in the range of what would be typically sold during the highest selling months of October and November.
The March 2020 growth rates represented a significant turnaround from what had previously been a deceleration of DTC shipment growth rates – which were down to mid-single digits in 2019 and even further reduced in the first two months of 2020.
The average price per bottle purchased dropped somewhat, to $42 per bottle this March, compared to $46 per bottle a year ago. Brager said that’s a likely result of ‘more mainstream’ consumers buying via the DTC channel commensurate with channel shifting related to COVID-19.
All price points except those $150 or more per bottle registered double-digit lifts in sales.
Washington state wines led the sales growth. They were up 65 percent, as well as shipments within and to the state of Washington (up 37.5 percent) The earlier onset of COVID-19 in Washington could be a factor in the larger sales increases in March, Brager said.
Separately, Nielsen reported 1.5L and 750 ml growth rates were still strong while 3L box growth was enormous, up 82 percent.
“The biggest question I get asked, is ‘how much of what we’re seeing represents additional consumption?’” Brager said. “I think the wine category overall is doing pretty well.”