Unless otherwise indicated, the following dates and statements relate to the week ending June 20. March 2021 compared to the same week last year on NielsenIQ offshore channels.
31. March – We now have a few weeks to cover Pantra’s peak weeks of 2020. As we do regular updates over the next few weeks, there will be a lot of negative numbers. However, it is important to put these numbers in context and recognize the unique buying dynamics of March/April 2020. This time last year, there was a massive shift in volume from these local channels due to mandatory closures and restrictions in bars and restaurants, resulting in record sales of beer, wine and spirits in the offshore channels. Given these year-to-year comparisons, it would be unrealistic for current out-of-town sales to exceed or even come close to the unprecedented year-to-year growth. This is why we often cite sales trends from two years ago as a benchmark for more normal sales volumes.
In the most recent week ended 31 August 21, total dollar outbound sales fell 20.4% from the same week a year earlier. Wine production increased by -29.7%, spirits by -21.2% and beer/FMB/cider by 15.2%. Although these year-to-year comparisons seem dismal, out-of-state alcohol sales remain well above the pre-pandemic norm.
Sales in dollars for the week ending the 20th. March 2021 was 23% higher than the same week in 2019. Although more and more bars and restaurants are opening across the country, there is still an imbalance in terms of volume outside the country. A breakdown by outing category compared to two years ago shows that alcohol is up 39% and wine and beer/FMB/cider is up 18% compared to the same week in 2019.
The week ends on the 20th. In March, almost all beer segments recorded double-digit declines compared to the same week last year. High quality brandy was down 21.6%, low quality brandy was down 23.3%, craft brandy was down 23.1%, cider was down 27.0% and FMD excluding seltzer was down 12.7%. Imports fell only slightly, with an overall decline of 5% and a 4% drop in Mexican imports. Are these three segments still above last year’s sales peak? The production of Hartseltzer increased by almost 1%, that of strong tea by 26.8% and that of alcohol-free beer by 17.2%.
Across the category, large packs fell the most last week, with 30-packs down 40.3% and 24-packs down 29.4%. Remember, however, that around this time last year, large packages experienced an unusually high growth rate, so they are now facing an equally high payout. Small packs, on the other hand, have barely grown in the past year and their sales are therefore more manageable, with 6-packs down 8.7% and single packs down 1.3% last week. These trends are less a reflection of current performance than of the exceptional growth segments of the past year.
The only channel with positive growth momentum was commodities, which grew by 1.8%. This also reflects last year’s performance and sales figures, as convenience stores grew much more slowly than other channels during this period.
Although overall growth in the spirits segment was down 21.2%, some segments continue to grow. Sales of finished cocktails remained three times higher (+134%), with cognac up 19% and tequila up 3.5% in the week ending June 20. March 2021 in offshore channels. Gin had one of the biggest declines, down 32.8 percent. It should be borne in mind, however, that last year gin sales rose sharply in the first weeks of the pandemic (by 88.8% in the week ending 21 March 20), making comparison difficult. Cognac was down 28.5%, cognac 11.0%, rum 35.2%, vodka 36.6%, whiskey 21.0% and American whiskey 26.8%.
All shower price levels are lower than last year. Non-premium alcoholic beverages continue to decline, with ultra-premium beverages experiencing the slowest decline (1.7%) (premium -22.9%, average -33.1%, value -25.3%).
The total price of wine fell 29.7% this week at the expense of table wine (-33.8%), while the price of sparkling wine fell only 0.9%. While these decreases seem significant, overall volume is still significantly higher than two years ago (+18.4% vs. 3/23/19). Most segments and variations showed decreases, with increases for wine cocktails (+69.9%) and non-alcoholic wines (+36.8%). In terms of packaging, there are increases in some alternative packaging, notably cans (+24.9%) and Tetra (+2.7%), while more traditional formats such as 750ml glass (-28.3%) show decreases.
Most channels showed large declines, but convenience (albeit a small one) was a bright spot with a 3.7% increase. All price levels fell, but the higher the price, the smaller the drop. Wines at $25 were 7.1% cheaper than wines at $11, which were 39.3% cheaper.
Penetration remains about 1.5 to 2 points above the 2019 monthly norms. For March and April 2021, out-of-state alcohol use is expected to remain stable, with levels similar to February at approximately 30% to 31%. We are unlikely to see an extreme drop in the number of households buying alcohol abroad in the coming months.
Average dollar expenditures per stop work customer remained high and above the norm throughout the pandemic, primarily due to dollar expenditures per trip, as opposed to customers who travel more. For March and April 2021, consumer spending on alcohol is expected to remain at January and February 2021 levels, with a slight increase in April due to typical seasonal trends.
In the field
From 5 to 8 years old. In March 2021, NielsenIQ’s local partner, CGA, surveyed 1,584 people in New York, Illinois, California and Texas (alcohol use and time spent outdoors in the past three months). Here are some of the highlights of this survey.
- The same locations remain popular when consumers go out again after their first outing. However, fine dining restaurants come in third (27%), behind independent restaurants (45%) and chains of casual restaurants (44%). This puts them ahead of neighborhood bars (24%).
- Drinks with food are cited as the main reason for going to bars and restaurants (47%), underlining the popularity of more casual venues. However, with 29% of visits for pleasure/rewards and festivities, business opportunities remain.
- Visiting bars and restaurants with a partner/spouse remains a key group in post-reopening visits, but visiting with friends and family becomes equally important, especially for 21-34 year olds. 50% went out with friends after the reopening and only 40% with a partner or spouse.
This time last year, there was a massive shift in sales from these local channels due to mandatory closures and restrictions in bars and restaurants, resulting in record sales of beer, wine and spirits in the offshore channels. Given these year-to-year comparisons, it would be unrealistic for current out-of-town sales to exceed or even come close to the unprecedented year-to-year growth. Although these year-to-year comparisons seem dismal, out-of-state alcohol sales remain well above the pre-pandemic norm. – Danelle Kosmal, vice president of alcohol at NielsenIQ.
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