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INDUSTRY RECAP

IRI WEEK ENDING 6.28.20   

Link to Report here

The latest week, ending 6/28/20, shows many YMCO states and total U.S at the lowest category growth rates over the last 17 weeks. In California, spirits grew 27.6%, which is slightly below average. Wine grew 12.8%, the 2nd lowest week since March this year. 4th of July data will be available next week.

 

Share change remains consistent for YMCO

 

YMCO YTD 6-28-20 YTD $ Share Change

NIELSEN IMPACT ON WINE & SPIRITS US - WEEK ENDING 6.27.20 

Link to Report Here

 

Wine

  • Channels- Post COVID -19 Growth

    • All channels remain up.

    • US Food and Combined Liquor Plus each +30%. 

      •  (US Xaoc +28%, Drug Census +12% and US Conv +16.4%)

  • Volume Trends Total US- Growth Rates versus Previous Week

    • Growth rates slight decrease in week 6/27/20

      • Growth rate appears to be stabilizing

      • States are in phase 1 and phase 2.

    • Week ending 6/27/20 +19.1% 

    •  Prior week +20.4%

  • Unit & Price Trends Total US- Growth Rates versus Previous Week

    • Units for Week ending 6/27/20 decreased -787K over prior week

      • Average retail increases to $9.80 over prior week

  • State Performance- Post COVID -19 Growth

    • Maryland +38%

    • Michigan, California +30%

    • Texas, Virginia +28%

  • Top 15 Manufacturers Total US- Post COVID -19 Growth

    • Riboli Family Wines +147%

    • DFV Wines +54%

    • Palm Bay +45% 

    • Deutsch Family +37%

  • Size Total US- Post COVID -19 Growth

    • Alternative Packs large growth remain

    • 3L growth remain

    • 355ml (cans) +143%

    • 375ml, 250ml +73%

    • 3L +53%

  • Flavors Total US- Post COVID -19 Growth

    • Misc Red +34%

    • Moscato, P Noir, Rose, Sparkling +30%

  • Price Segments Total US- Post COVID -19 Growth

    • $20-24.99 +39%

    • $10-14.99 +36% 

    • $15-19.99; $25-29.99, $30-49.99; $50>  +30%

  • National Accounts Performance- Post COVID -19 Growth

    • SpartanNash +36%

    • Target +35

    • Meijer +33%

    • Food Lion +30%

 

Spirits

  • Channels- Post COVID -19 Growth

    • All channels remain up

    • US xAOC +39%

    • US Food +44%

      • (Combined Liquor Plus 33%, US Conv +29% and Drug Census +17%)

  • Volume Trends Total US- Growth Rates versus Previous Week

    • Growth rate stabilizing in week 6/27/20

      • States are in phase 1 and phase 2.

    • Week ending 6/27/20 +29.8%

    • Prior week +30.1%

  • Unit & Price Trends Total US- Growth Rates versus Previous Week

    • Units for Week ending 6/27/20 decrease -121K from prior week

    • Average retail increased to $15.98.  $0.02 over prior week

      • (Average retail up $1.57 over prior year)

  • State Performance- Post COVID -19 Growth

    • Michigan and New Mexico +44%

    • Indiana +42%

    • Nebraska +37%

    • Texas +36%

    • Maryland+32%

  • Top 15 Manufacturers Total US- Post COVID -19 Growth

    • Infinium +95%

    • Proximo +59%

    • Fifth Generation +55%

    • Campari +51%

    • Pernod Ricard, William Grant, Bacardi, Moet Hennessy +40%

    • Others –approximately +30%

  • Size Total US- Post COVID -19 Growth

    • 355ml +210%

    • 1.75L +41%

    • 1L +40%

    • 750ml +38%

  • Category- Post COVID -19 Growth

    • Prepared Cocktails +88%

    • Tequila +65% 

    • Cordials +51%

    • American Whiskey, Gin, Irish Whiskey, Cognac +40%

    • Rum +30%

  • Price Segments- Post COVID -19 Growth

    • >$40 +70%

    • $30-39.99 +55%

    • $22-29.99 +48%

    •  $15-21.99 +41%

  • National Accounts Performance- Post COVID -19 Growth

    • Whole Foods +76%

    • Target +60% 

    • Meijer +47%

    • Spartan Nash +46%

CONSUMER/SHOPPER INSIGHTS & ANALYSIS

 

Market:

The Unemployment Rate Fell From 13.3% In May To 11.1% In June – Beating The 12.2% Prediction Economists Had. The Labor Department Reported That 4.8 Million Jobs Were Added In June—More Than The 2.9 Million Expected. As Legislators Reconvene After The Holiday, Another Round Of Stimulus Checks Will Be A Major Topic - Which Could Affect Consumer Spending.

The Return Of The NBA

The NBA Season Is Set To Resume On July 30. The 2019-20 NBA Season Went On Hiatus On March 11 Because Of The Coronavirus Pandemic. A Lack Of Sports Will Make For The Perfect Opportunity For Activation As Consumers Of All Ages Will Watch As The NBA Is The Largest Sport To Return To Live Action In The U.S To Date.

Consumer:

Consumer Spending, Which Accounts For More Than Two-Thirds Of U.S. Economic Activity, Jumped 8.2% Last Month – A Promising Sign For Businesses. E-Commerce Appears To Be Benefiting Significantly As 55% Of Consumers Have Bought More Products Online.

On Premise:

Alleviate Concerns With Safe Practices

On Premise Locations Shouldn’t Be Too Optimistic About Customers Returning There Once The Curve Finally Flattens. Just 40% Of Consumers Say They Will Return On Premise Within A Month When The Infection Rate Decreases. Take This As An Opportunity To Draw Attention To Safety Steps Being Taken So When Consumer Return They Know Their Safety Is Priority Number One.

Off Premise:

Innovate Business Models

Off Premise Locations Should Focus On How To Keep Up With The Continued Increase In Online Shopping Use - As 30% Of US Consumers Expect To Shop More Online And Less In Store Post-Crisis. In Addition, Off Premise Locations Should Improve Upon Contactless Payment Options: 27% Expect To Retain Heightened Use Of Contactless Payment After The Crisis Ends


Spirits:

Highlight Premium Brands

Consumer Spending Continues To Rise And So Is Their Desire For Premium Brands. As Bars And Restaurants Begin To Re-Close, Encourage Consumers To Bring Their Favorite Top Shelf Brands Home To Treat Themselves As The Pandemic Continues. Spirits Priced Over $40 Have Risen +70% Since COVID-19 Began

 


Wine:

Alternative Packaged Wine Surging

Canned Wine Has Been Setting The Bar High Since The Outbreak Began But They Aren’t Alone, As 375ML Wine Has Grown +73%! Canned Wine Sales Continue To Be The Fastest Growing Alcohol Item, Experiencing +143% Growth Since The Pandemic Began. Canned Wine Provides Consumers With Unmatched Portability And Convenience For Those Looking To Spend More Time Outdoors.

NIELSEN U.S. BEVERAGE ALCOHOL HIGHLIGHTS WEEK ENDING 6.27.20

Nielsen Beverage Alcohol Practice 

TOTAL BEVERAGE ALCOHOL

Unless otherwise noted, all trends below are for Nielsen off premise channels for the week ending 6/27/20 compared to the same week in 2019.  We continue to remind our readers that we are only measuring sales in some specific off premise channels, and that the impact of the health crisis on sales is uneven across companies in the Alcohol industry.

 

Off premise trends are slowing down – at least for now. We are finally seeing the off premise slowdown that many of us expected to see earlier this month, when the on premise started opening up. For the week ending 6/27/20, total alcohol off premise alcohol sales were up 19.2%, which is the second slowest growth week since mid March. That’s down from a growth rate of 25.4% for the prior week.  The Liquor channel was the largest channel contributor to the slowdown. 

Spirits continue to lead growth, up 29.2%, but also slowed significantly compared to previous weeks’ growth trends. Wine grew 18.5% in dollar sales, and beer/FMB/cider was not far behind that, up 16.1%. Core beer excluding FMB/seltzer/cider was up 8.1%.  The reduction in alcohol growth levels parallels the slowdown across all fast moving consumer goods (FMCG), with FMCG growth slowing from +13.1% to +9.4%.

If the on premise would have continued to open up, we would have predicted that the slowing of off premise trends would have continued in upcoming weeks, as alcohol volume would have increasingly shifted back to the on premise. However, with the second round of on premise closures happening in key states across the country, we will likely see an uptick again in off premise growth, particularly for the next two weeks of data, which will include July 4th related sales.

ON PREMISE

Based on Nielsen CGA RestaurantTrak data (comprised of c15,000 independent restaurant operators and smaller groups), sales velocities in the week ending June 27, 2020 improved to -10% vs the pre-COVID norm (for those outlets still open), representing a +220% increase vs the week ending March 28.  However, there is predictably significant state by state variation based upon differences in COVID infection rates by state and government action in those states.  

For instance, in Texas and Florida recent velocity growth over the last few weeks has been tempered. In Florida, velocity was flat at -0.2% for the current week vs the prior one, while in Texas velocity dropped by -4%.  On the other hand, in the latest week, velocity grew by +53% June 27 vs June 20 in NYC metro, with the wider state growing by +24%.

NY aside, a common observation across many states is that key cities have, and continue to, perform worse than the rest of their respective states compared to their pre-COVID levels. With business travel/commuting still massively restricted and large events and late night occasions still not really happening, the city centers are still having a difficult time.

We have obviously now entered a period of turbulence and flux in the on premise channel as many states have begun dialing back their opening plans, so a very localized view will be necessary to understand impacts. 

BEER/FMB/CIDER 

Growth rates for all segments across the beer/FMB/cider category slowed significantly in off premise channels for the week ending 6/27/20. Hard seltzers were up 187%, which represents the first time since November 2019 that hard seltzer growth dropped below 200%. However, this doesn’t minimize the total size of seltzers, which sold $107 million in Nielsen off premise channels for the latest week (the second largest week ever for hard seltzer sales – next only to the week leading up to Memorial Day 2020). Hard seltzers continue to chip away at dollar share, accounting for 10.7% of category dollars for the latest week. Seltzers now have annual sales of $2.8 billion (latest 52 weeks) in Nielsen off premise channels, up $2 billion in annual sales from a year ago. Seltzers accounted for 7 of the 10 top growth brand extensions for the latest week (Mich Ultra, Modelo Especial, and Corona Extra were the 3 non-seltzer growth brands).

 

After seltzers, super premium was the segment with the next strongest growth rate, up 16.7%. Craft grew 12.9%, Mexican imports +11.2%, FMBs excluding seltzers +10.4%, premium lights slowed to +4.4%, cider +1.6%, and below premium dropped to -0.6%, representing the first time any segment in the category experienced negative growth trends since the first week of March. 

WINE

Wine dollar sales in Nielsen measured off premise channels grew +18.5% in the most recent week vs year ago, down from +23.8% the last week.  While the ‘hot’ $20-$25 price tier segment cooled a bit this week, the price tiers just below and above it ($11-$15, and $25+) performed strongly.  Within pack sizes, the highest growth rates - albeit on relatively small bases - remain Cans and 375 ml bottles.

We examined table wine varietal performance this week; over the past 17 weeks, the fastest growing wine types have been Sauvignon Blanc, Red Blends, Moscato, Pinot Noir, Rose’, Cabernet Sauvignon and Riesling (in that order) -- all +30% or more, with Sauvignon Blanc leading at +38%.  However, if we compare the difference in growth rates during this 17 week period versus pre-COVID (52 week ending Feb 29, 2020), the order looks a little different, with Moscato and Riesling (“sweet” anyone?) leading the way, followed by Red Blends, then Pinot Noir and Sauvignon Blanc. 

 

We should also note that wine is more ‘restaurant’ aligned than bars - its share of alcohol in restaurants pre-COVID was close to 3x its share in bars.  With mandated bar closures more evident than restaurants, wine may weather the storm better in the on premise.   

SPIRITS

Spirits’ growth was significantly trimmed back - to +29.2% this week from last week’s +39.5%, with that deceleration spread across ALL Spirit segments.  Yet, Spirits’ growth continues to lead both Wine and Beer by a wide margin -- by more than 10 pct points in the latest period. 

 

Since the re-opening period (week ending June 6, 2020), the strongest segments over the past 4-weeks versus year ago have been…

RTD’s: +91.8%

Tequila: +69.8%

Cognac: +51.4%

Cordials: +41.3%

A strong test of a segment’s overall strength is how effectively the segment’s pre-COVID higher on-premise development has been transferred to off premise growth.   From the table below, it appears that Tequila, followed by Cordials and Gin, have done the best job in achieving that transfer; Rum has not been as successful

Another view of spirits’ strength is that while it’s skewed more heavily to bars than restaurants compared to wine and beer, and is therefore more exposed to bar closures, much of that lost volume has been effectively transferred to the off premise.

 

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