On September 24th, 2020, bw166 published its Total Beverage Alcohol Overview through August 2020. August marks almost six months of the impacts of the pandemic. The industry has seen a dramatic shift in consumer purchasing patterns by channel. The change has significantly benefited markets tracked by syndicated data companies such as Nielsen and IRI.
- The bw166 Total Beverage Alcohol Index sits at 124.8 at the end of August 2020. The Index is up 1.9% from August 2019, measuring the growth in overall beverage alcohol servings.
- Significant speculation exists to suggest that consumption has increased significantly due to the pandemic. Given that the bw166 Servings Index has grown slightly faster than the LDA population (which has increased by 1.0% over the past 12 months), per capita consumption has increased slightly. The data translates to less than one serving per LDA every 60 days.
- The trends for six months ending August are:
- Beer volume entering distribution: -2.2%. The decline is a result of declines in imports, primarily driven by Mexican Beer imports.
- Wine volume entering distribution: +4.0%. 70% of the growth is driven by imports of Sangria, Coolers, and other flavored wine products.
- Spirits volume entering distribution: +3.4%. The growth has been driven by +7.0% growth of domestically bottled products offset by a -4.8% decline in imported products.
- Consumer spending on Beverage alcohol is up in the Off-Premise but not enough to make up for losses in the On-Premise.
- Consumer spending for six months ending August totals $121.3 Billion, down -$23.9 Billion (-16.5%) versus the same period last year.
- Syndicated data indicates continual trading up in the Off-Premise. Consumers are likely willing to spend more, given their savings in the On-Premise.
- The On-Premise is challenging to track, given the fragmentation of On-Premise channels and across Beer, Wine, and Spirits products. Some states impose a Mixed beverage tax for Beverage Alcohol sales in the On-Premise. A few states and their trends on a value basis include:
- Kansas: 12 months ending February 2020 +5.4%, six months ending August 2020 -45.0%, one month ending August 2020 -27.7%.
- Tennessee: 12 months ending February 2020 +16.2%, six months ending August 2020 -59.6%, one month ending August 2020 -16.1%.
- Texas data is only available through July, but the data includes a breakdown for Beer, Wine, and Spirits. The July data was negatively impacted by a second shut-down of bars in the state.
- Beer: 12 months ending February 2020 +2.8%, five months ending July 2020 -65.5%, one month ending August 2020 -60.6%.
- Wine: 12 months ending February 2020 +4.1%, five months ending July 2020 -66.5%, one month ending August 2020 -56.9%.
- Spirits: 12 months ending February 2020 +8.9%, five months ending July 2020 -57.1%, one month ending August 2020 -49.4%.
- The slight growth in servings entering distribution could be attributable to a small amount of pantry loading given channel shifts from Off-Premise to On-Premise. The market has seen some recovery in the On-Premise, but there is a long way to go. The one definitive forecast we can make is that beginning in March 2021, the channels tracked by Nielsen and IRI will show declines as the market comes up on the one-year anniversary of the pandemic.