Off-trade spirits sales growth slows as US bars reopen

25th June, 2020 by Nicola Carruthers

Spirits sales growth in the US off-trade slowed in the week ending 13 June as bars and restaurants continued to reopen across the country following coronavirus lockdowns, according to Nielsen data.

Alcohol

The US on-trade has started to reopen following the easing of coronavirus lockdowns

For the seven-day period ending 13 June, spirits continued to witness the highest growth across the alcohol category in the off-trade, with an increase of 25.1%. This was followed by beer, flavoured malt beverages (FMB) and cider at 20.3%, and wine at 20.1%. Beer on its own grew 11.1%. Total alcohol growth for the week rose 21.2%.

Within the beer, FMB and cider segment, hard seltzers continue to grow around 250% and maintain a 10% share of the category.

Sales of hard seltzers in the US off-trade experienced triple-digit growth in the week ending 6 June.

Danelle Kosmal, vice president of beverage alcohol at Nielsen, said: “This was the first week since the beginning of March that beer/FMB/cider, with the significant tailwinds of hard seltzer, actually grew faster than wine.”

The growth for spirits was the lowest recorded since the week ending 14 March 2020, Nielsen noted. Ready-to-drink (RTD) cocktails witnessed consistent growth rates of more than 80% for 11 weeks in a row.

Looking back over the last six weeks, RTD cocktails sales are now bigger in Nielsen’s measured off-trade channels than both gin and Irish whiskey. After RTDs, Tequila sits “comfortably” in second place, followed by cordials and Cognac.

While whiskey reported double-digit growth in the seven-day period, Nielsen said its growth was more than 10 percentage points less than the previous week’s growth.

‘Interesting trends’

Danny Brager, senior vice president of beverage alcohol at Nielsen, said: “As the on-premise space continues to expand openings across the country and we move from restricted living to reopening, off-premise alcohol sales have experienced a steady slowing of growth since early May.

“That said, we also have seen some recent and interesting trends in the growth of households purchasing items that correlate with celebrations, such as sparkling wine and higher-end wine and spirits. The timing of the spike in the number of households purchasing these celebratory items also coincides with Mother’s Day and college graduations.

“All eyes will be on sales leading up to the upcoming July 4 holiday and long weekend, during a year unlike any other.”

For the 15-week period ending 13 June, off-trade spirits sales in the US record a volume growth of 31% and a value growth of 34.6%, ahead of the wine and beer, FMB and cider categories.

In terms of e-commerce, Nielsen said during its peak in April, online alcohol sales levels were six times higher than comparable weeks in 2019, primarily led by the influx of new online alcohol buyers.

Looking at June, those increases have now fallen to three times higher than a year ago, says Nielsen. “Growth is still very impressive, but some consumers are likely returning to pre-Covid-19 shopping patterns,” Nielsen added.

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