USA: Off-premise beer sales not enough to make up for loss of on-premise establishments volumes in March-early August

Beer category sales in off-premise retailers during the COVID-19 pandemic haven’t been enough to make up for the loss of sales at on-premise establishments after shutdowns to stop the spread of the novel coronavirus, market research firm Nielsen reported on August 18.

During the COVID-19 period (from the week ending March 8 through August 8), beer category volume growth has averaged 15.3%. Nielsen estimated that the beer category would need to average 22% volume growth in off-premise retailers to offset the loss of on-premise sales — which hasn’t happened. That estimation assumes the on-premise accounts for 20% of the industry’s total volume and sales declines of 90%, the firm said.

Dollar sales during the COVID-19 period have increased 19% compared to the same time last year. Compare that to pre-pandemic beer category sales, which were up 3.8% for the 52 weeks ending February 29.

For the latest one-week period ending August 8, beer category dollar sales increased 13.8%, to $1.023 billion, Nielsen reported. Sales were on track with last week’s 13.9% increase. Growth in the category continues to be driven by hard seltzers and FMBs. With those segments removed, “core” beer sales were up 8% for the week.

Most segments were in the black for the week, led by hard seltzers (+115.6%), followed by super premiums (+19.9%), craft (+12.5%), imports (+9.5%) and premium lights (+6.4%). Budget offerings declined 1.2%.

During the COVID-19 period (from the week ending March 7 through August 8), hard seltzer dollar sales have reached $2.1 billion and year-to-date for the 32 weeks ending August 8 now total $2.45 billion. The hard seltzer segment has also gained 5.7% of dollar share of the beer category during the COVID-19 period, compared to the same weeks in 2019. In the latest week, hard seltzer accounted for 10.3% share of beer category dollars.

In a report today, Cowen and Company analyst Vivien Azer wrote that off-premise sales of all beer segments (minus cider) were trending below 12-week trends as more on-premise establishments opened.

Hard seltzer sales during the last four weeks increased 131% year-over-year compared to last year, but have decelerated from the 179% growth over the last 12 weeks. Keep in mind, those figures are likely hampered by tougher comps and out of stocks.

For the second month, Azer wrote that the hard seltzer segment has claimed a 10% share of beer category dollars. Meanwhile, hard tea is up 33% over both the last four- and 12-week periods.

Azer noted that Bud Light Seltzer sales accounted for 57% of Anheuser-Busch’s FMB sales during the period. For Boston Beer Company, Truly sales were up 131% over the last four weeks, and +157% over the last 12 weeks, with Twisted Tea sales up 36% (+34% for the 12 weeks). Corona Hard Seltzer, which launched in March, has claimed 3% dollar share of the FMB category year-to-date and 3.7% over the last month.

According to Cowen, year-to-date FMB share is as follows:

40% Mark Anthony Brands (White Claw and Mike’s Hard Lemonade, among others)
20% Boston Beer
10% AB InBev
8.7% Diageo
6.4% Molson Coors
3% Constellation Brands
12% Other brands

In those four weeks, Molson Coors’ Vizzy variety 12-pack is among the top 10 growth brands and the No. 3 new item year-to-date and the fifth fast-moving brand in the category. This gives Molson Coors two of the biggest innovation products of the year, with Blue Moon line extension Light Sky, which is the top-selling new beer item.

Nielsen also took a look at e-commerce sales of beverage alcohol products, which continue to grow faster than any other consumer product goods. Online sales of alcoholic beverages — which peaked at 551% year-over-year growth during the week ending April 25 — continues to hover in the triple-digits, with sales increasing 307% during the week ending July 4.

Compare that to the first week of March, when online alcohol sales were up just 13% compared to the same one-week period a year ago.

During the COVID-19 period (March through July 4), e-commerce sales of beer are up 274%. However, beer has the lowest share of online sales, with just 11.2% share of sales. Wine (69% share) and spirits (21.1% share) are outpacing beer in e-commerce sales. Online sales of spirits during COVID-19 are up 476%, while wine sales are up 273%.

Overall, dollar sales growth rates of spirits (+27.9%) and wine (19.1%) continue to outpace beer.

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