Nielsen Alcoholic Beverage Sales Update for Week Ending May 30, 2020
June 10, 2020
Across total fast moving consumer goods (FMCG) and alcohol, the week ending 5/30/20 has been one of the slowest growth weeks since the beginning of March (albeit still up double digits), as we are moving from the RESTRICTED LIVING phase of the health crises 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 3 months, but it’s still a long road back to pre-COVID times.
Dollar growth rates for total fast-moving consumer goods (FMCG) were up 10.1% compared to the same week last year, and down 3.1% compared to the prior week ending 5/23/30. Consistent with trends throughout COVID weeks, off premise alcohol growth surpassed that of FMCG, which is expected since the on premise is not back to pre-COVID capacity, while consumer confidence in getting back ‘out’ varies considerably person to person, and certainly is anything but universally high.
Total alcohol growth in Nielsen off premise channels for the week ending 5/30/20 (this week still captures some pre-Memorial Day movement) was +22.2% compared to the same week last year. Spirits led +32.2%, continuing to grow its share of alcohol off premise, followed by wine at +24.2% and beer/FMB/cider at 18.2%.
However, beer/FMB/cider was the only alcohol category (and one of the few consumer goods categories) that experienced growth vs. prior week (+2.4%), thanks to a bump from the beer-centric Memorial Day holiday. The category once again surpassed $1 billion in off premise sales in Nielsen measured channels, only $28 million behind beer/FMB/cider sales for the week of July 4th 2019, traditionally the biggest beer holiday. Wine sales retreated -5.5% from last week’s sales levels, while spirits sales declined -6.8% compared to last week.
Under a full lockdown situation and even with ‘alcohol to go’ allowed, Nielsen had estimated that off premise volume sales would need to maintain at least 22% growth rates to offset the on premise losses. Spirits and wine had managed to exceed those volume growth rates, while beer/FMB/cider remained below that threshold.
COVID-19 13 weeks to date (since w/e March 7, 2020) volume % chg vs year ago:
- Spirits: +32.1%
- Wine: +26.4%
- Beer/FMB/Cider: +17.2%
As the on premise begins to emerge from lockdown and some consumption swings back to those channels, we will adjust those threshold growth rates. Consumer spending is an entirely different matter. Given the massive shift from on premise to off premise and concurrent reductions in the price consumers pay in these two channels, overall consumer dollars are down double digits.
Across total consumer goods, pantry loading continues, albeit at moderating levels. Trip frequency levels are returning closer to pre-COVID norms, but basket sizes continue to be larger than pre-COVID, up 17% compared to last year in brick and mortar outlets. Frozen is one of the top growing departments, driven by meat stock-up, as shoppers have bought more beef and chicken across both fresh and frozen departments.
When it comes to alcohol, how have shopping behaviors shifted or differed across different age groups? The age group with the lowest growth rates compared to last year are those age 55 and older, both as a result of lower increases in their number of buyers as well as their shopping trip frequency. Given this age group is less likely than younger consumers to be highly engaged on premise drinkers, there was likely less of a shift from on premise to off premise for older consumers. For the 4 weeks ending 5/9/20, there was an increase of more than 20% for alcohol buyers aged 21-34, 35-44, and 45-54, compared to an increase of only half that for those 55+. And consumers aged 21-34 are shopping more frequently than any other age demographic for alcohol compared to year ago. As the on premise enters this new RE-OPENING phase, we will continue to track consumer behaviors across these age groups, particularly those 21-34 to evaluate how their off premise behaviors might be changing.
To have a full picture of Memorial Day holiday sales, Nielsen looked at the two weeks ending 5/30/20 compared to the same 2 weeks last year. For those two weeks, beer/FMB/cider surpassed $2 billion in off premise sales, growing $344 million compared to last year. Total category growth rates were 19.6%, while beer (excluding FMB/seltzer/cider) grew by 10.7%.
Hard seltzers contributed to nearly half (44.6%) of category growth dollars for Memorial Day this year, and for the second week in a row, captured over 10% of total beer dollar sales. Last year, hard seltzers had $61 million in Nielsen off premise sales for this 2-week time period, compared to $215 million in sales this year (just over a +250% growth rate). Other winning segments include Mexican imports (+17.5%), super premium (+16.4%), and FMBs excluding seltzers (+15.4%). Crafts were up 13.7%, premium light +7.5%, premium regular +6.9%, and budget +3.2%.
For the Memorial Day weeks, White Claw continued to hold a very strong spot as the #1 growth brand for the category, contributing 23% of overall growth, and now representing 5.3% of total category dollars. This is even more impressive considering that last year, the entire hard seltzer segment had 3.5% of category dollars for the 2 weeks of Memorial Day sales. White Claw wasn’t the only seltzer among strong category performers for Memorial Day. Truly was ranked #2 among growth brands, followed by Modelo, Mich Ultra, and Bud Light Seltzer.
Recent COVID trends in pack sizes continued through Memorial Day, with 12 packs experiencing the strongest growth rates (+38.1%). Large packs continue to outpace growth rates of smaller pack sizes, with 30 packs +24.8% and 24 packs +21.4%, compared to 6 packs +8.5%.
There has been recent talk about beer growth near US-Mexico border regions, due to beer supply shortages south of the border. A comparison of growth rates in southern vs. northern California supports that. During April, category growth rates in southern California lagged those in northern California; however, beginning in May, we started to see a strong shift of stronger growth rates in southern California markets compared to northern California markets.
Wine dollar sales in Nielsen measured off premise channels grew +24.2% in the most recent week vs. year ago - well under the +30.2% overall 13-week COVID-to-date growth.
Some further 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
- 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.
Spirit sales in Nielsen measured off premise channels grew +32.2%, again well ahead of the other alcohol categories. As a reminder, while spirits was also growing faster than wine or beer pre-COVID, it’s likely that some of its growth lead since then is a function of its higher on premise share of alcohol than in the off premise, and a transfer of demand as restaurants and bars shuttered for ‘on’ the premises eating and drinking.
Similar to pack size trend shifts that we see in wine, the 750 ml size has now grown faster than the 1.75L for four consecutive weeks.
What hasn’t changed is:
- premium and ultra premium priced products in aggregate are growing considerably ahead of mid-price and value priced segments
- RTDs and Tequila segments remain ahead of the other segments, BUT for a chance of pace, Cognac snuck just ahead of Cordials in this week’s growth rate ranking. And, while a smaller segment, Japanese whiskey has recorded two consecutive weeks of very strong levels of growth
Given the significant growth of Cordials over the past three months, we looked at the five brands adding the most dollars compared to year ago in Nielsen measured off premise channels, and they are (in ranked order): Baileys, Cointreau, Kahlua, Grand Marnier, and Aperol.