Nielsen’s Alcohol Beverage Team Reveals Insights into the Beer Industry

Beer category dollar sales in off-premise retailers increased 12.3% to $856M but that was the slowest growth over the last six weeks, according to Nielsen.

Beer Category Dollar Sales Growth Rate Slowest of Last 6 Weeks

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Beer category dollar sales in off-premise retailers tracked by market research firm Nielsen increased 12.3%, to $856 million, for the week ending April 18th, compared to the same one-week last year.

Although dollar sales for the week were the third highest of the six-week pantry-loading and replenishment period caused by COVID-19, the growth rate was the lowest of that time frame. In the previous five weeks, dollar sales increased:

  • 14%, to $791.9 million, for the week ending March 14th;
  • 42%, to $967.1 million, for the week ending March 21th;
  • 17%, to $817.8 million, for the week ending March 28th;
  • 19%, to $836.3 million, for the week ending April 4th;
  • 19.4%, to $861 million, for the week ending April 11th.

The latest one-week snapshot from Nielsen also included Easter Sunday, which the firm noted would typically lead to a dip in sales following the holiday. And it should be noted that although the beer category continues to string together strong double-digit dollar sales in off-premise retailers, those sales increases aren’t enough to make up for the loss of on-premise sales. That’s especially true for craft beer, as Brewers Association, (BA) chief economist Bart Watson has estimated that 40% of craft volume flows through the on-premise trade.

Bump Williams Consulting (BWC), which offered its own analysis through April 19th, noted that the latest week was the first during the COVID-19 stock-up period that the beer category’s growth trends (+15%) did not exceed the average growth rate of the six-week stock-up period (+20%). Beer wasn’t alone, as wine (+13% for the week ending April 19th) and spirits (+37% for w/e April 19th) were both below their respective six-week averages of +28% and +39%.

BWC added that beer growth trends in convenience stores (+17% for w/e April 19th) outpaced those in grocery stores (+15%). Among the widest disparities in c-store sales were those for imports (+20% in c-stores vs. +1% in grocery) and hard seltzers (+422% in c-stores vs. +221% in grocery).

According to Nielsen, hard seltzers now account for 8% of beer category dollar sales, increasing 288% year-over-year. Hard seltzers contributed more than half of the category dollar growth for the week ending April 18th, and made up eight of the top 10 growth brand extensions for the week, the firm added.

Mark Anthony Brands, maker of White Claw and Mike’s Hard, overtook Anheuser-Busch InBev for the top spot on the top growth vendors by dollar sales for the week ending April 19th, while Truly Hard Seltzer maker
Boston Beer Company leapfrogged
Molson Coors for the No. 4 spot, according to BWC.

The premium light (+1.5%) and below premium (+1.7%) segments both slowed during the week, Nielsen reported. BWC mused that those slower dollar sales trends may signal a return to “normalcy.”

Meanwhile, dollar sales growth of craft (+5.8%) and independent craft (+5.9%) mirrored one another last week, Nielsen said. Also of note, hard tea dollar sales increased 28.4%.

The growth trends in California were the slowest since February, while Washington state posted its second strongest growth week, Nielsen reported.

The trend toward larger pack sizes continued, as 24-packs (19.8%) and 30-packs (20.9%) posted strong double-digit growth during the week ending April 18th, according to Nielsen. Six-pack dollar sales declined about 2% compared to the same week in 2019, and lost more than 2 share points compared to their average weekly share in 2019.

Among the consumer insights shared by Nielsen, the number of people making purchases in March and April has unsurprisingly increased year-over-year and is driving off-premise growth. The number of households making alcohol shopping trips increased 27% for the week ending April 11th, while the total alcohol spend per buyer increased 13.3%.

Nielsen also shared the results of a consumer panel survey conducted between March 27th and April 17th. The firm acknowledged that survey results often differ from actual purchasing behavior, so the goal of the latest survey was to compare the survey’s responses with scan data to “provide a more accurate picture of COVID-19 stocks ups and replenishment weeks.”

Of the more than 10,000 bev-alc consumers surveyed, just 17% said they stocked up on alcoholic beverages over the last month compared to their usual buying behaviors, and 41% of respondents said they didn’t stock up at all on alcohol. However, actual purchasing behavior showed that the dollar spend for those consumers actually increased by 25% for the four-week period ending April 4th year-over-year. Consumers who said they kept the same amount of alcohol on hand also increased their dollar spend 13.3% compared to last year.

A majority of the survey’s respondents (69%) said they were buying trusted brands, and just 2.3% of respondents said they were buying more premium or expensive alcoholic beverage brands than normal.

Nielsen also offered a view of how on-premise consumers before COVID-19 are now purchasing alcoholic beverages in off-premise channels, and found that frequent on-premise consumers were more likely than average adult beverage consumers to buy alcohol in both brick-and-mortar stores and from online retailers. More than a quarter of frequent on-premise drinkers (28%) said they purchased more alcohol in the past month at a physical store, compared to 15% of average drinkers who claimed to have purchased more at a store.

Frequent on-premise drinkers were also 60% more likely to have purchased more alcohol in the past month through delivery or pick up from a store, 80% more likely to have purchased alcohol online from a bar or restaurant, and 55% more likely to have increased their online purchases from a brewery, winery, wine club or distillery.

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