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Spirits to grow share of US e-commerce sales

The spirits category is expected to increase its share of the US alcohol e-commerce channel at the expense of wine, according to the chief operating officer, Americas, for IWSR Drinks Market Analysis.

Spirits are forecast to represent 39% of US e‐commerce alcohol share by 2024

In June, trade show Vinexpo New York held a webinar, called The New Normal: Beverage Alcohol in a Covid Environment, which was sponsored by the IWSR.

Speaking during the webinar, Brandy Rand, chief operating officer, Americas, for IWSR Drinks Market Analysis, said spirits are forecast to represent 39% of US e‐commerce alcohol share by 2024. Wine is expected to represent 44% of US e-commerce sales by 2024, while beer is predicted to represent 12% and the ready-to-drink sector is forecast to represent 5%.

Rand said wine represented 54% of US e-commerce alcohol sales in 2019, followed by spirits at 28%, beer at 12%, RTDs at 5% and cider at 1%.

Rand noted that as consumers were forced to adopt e‐commerce during the pandemic, the channel’s growth rate in the US has accelerated by several years.

The US market “was a bit far behind” when it comes to e‐commerce, Rand said, but the channel has now “created a lot of opportunities”.

US alcohol volumes

From a US perspective, total alcohol volumes grew by 0.3% in 2019, with spirits and the RTD category growing by 3.1% and 43.1%, respectively. Wine dipped by 0.8%, beer fell by 2% and cider dropped by 3.8%. Value was up in all alcohol categories in 2019, except beer.

Rand said total US alcohol volumes were predicted to fall by 1.9% in 2020, compared with a decline of 1.5% in 2009 after the recession of 2007‐09. The return to growth is forecast to take several years, with flat growth by 2024, mainly because of the continued decline of beer. Spirits are likely to weather the storm, Rand noted, maintaining share and marginal growth rates.

The long‐term premiumisation trend is expected to be resilient, with the value of total US alcohol forecast to rise by 2.9% between 2019 and 2024. The RTD category, including flavoured malt beverages, is expected to fuel total alcohol growth in the US.

Hard seltzers, as a standalone category outside of beer, made up 2.4% of US alcohol volume share in 2019, and the IWSR expects the category to take a 6.6% volume share of US alcohol by 2024. Hard seltzers are now bigger than vodka in the US, Rand noted.

During periods of economic downturn, Rand said the US alcohol industry generally keeps its steadiness. After the 2001 recession, Rand said US alcohol volumes grew by 4% between 2001 and 2004. She noted that the “same subcategory trends have held since the recession, with beer in decline, but wine, spirits and RTDs all driving growth”.

IWSR forecasts total global alcohol consumption will experience double-digit declines in 2020 due to the Covid-19 pandemic and will take until at least 2024 to reach pre-crisis levels.

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