Category: tba overview

• The bw166 serving index is at 123.11, a 1.2% increase over the same period last year.
• The legal drinking age (LDA) population is now 243.5 million, +1.0% versus last January.
• 75% of the growth in the LDA population is represented by consumers over age 60.
• Per capita consumption is only up marginally over the last year.
• Spirits are driving all of the growth in servings in the beverage alcohol category.
• Off-Premise Beverage Alcohol spending totals $158.5 Billion, +2.6%.
• On-Premise Beverage Alcohol spending totals $119.0 Billion, +5.0%.
• Consumers are shifting more of their On-Premise spending to Limited-Service Eating Places, where spending grew +10.5% over the last twelve months.  Full-Service Restaurants grew +3.7% during this period.

Note: The methodology bw166 uses to calculate total consumer spending has been revised in this current report to more accurately reflect the total market. This change has increased baseline spending by 4% though general trends have not changed.

bw166 released The Total Beverage Alcohol report for twelve months through November 2019. 

Key points over the past twelve months include:

• The bw166 TBA Serving index increased +1.4% to 123.3 versus last year (this index represents the change in servings of beverage alcohol entering the U.S. market).
• Consumer expenditures for beverage alcohol total $266 billion, an increase of +3.6% driven more in the On Premise than the Off Premise.
• Legal Drinking Age population is up +1.0% compared to servings growth of +1.4% – indicating that recent surveys showing a reduction in consumption are not apparent in the statistics of the market.
• Over 80% of the growth in the Legal Drinking Age population is coming from those over 60.
• Servings growth is dominated by Spirits, which is gaining share from both Beer and Wine. Beer servings show continuing declines while Wine servings are growing slightly.
• Beer is seeing growth from Hard Seltzers and Mexican Imports though this growth is not offsetting declines in traditional beer sub-categories.
• Sparkling Wine is the primary driver of growth in the Wine category.
• Spirits servings are growing across sub-categories, especially Whisky, Tequila, and Cordials. Vodka is flat, even with the continued strong growth of Tito’s.

Jon Moramarco, the Managing Partner of bw166, is also a partner in and the editor of The Gomberg & Fredrikson report. Gomberg & Fredrikson has been tracking the U.S. wine market since 1948. Jon will be presenting a webinar for Gomberg and Fredrikson on Wednesday, January 15 at 9:00 AM Pacific time, which will be open to both Subscribers and Non-Subscribers. The content will include an update on the overall beverage alcohol market for 2019, key data points on the wine market for 2019, and an overview of how demographics have tracked with the beverage alcohol market over time and projections of how these will interact moving forward. Parties interested in joining the webinar may register at https://gfawine.us12.list-manage.com/track/click?u=a4ec6df009d36ae225ba743b1&id=75f868c9dd&e=72513e6e77.

The latest bw166 Total Beverage Alcohol Overview shows that servings are up +0.9% for the 12 months through September 2019 – an unsurprising trend as LDA per capita consumption has been effectively flat over the last 25 years. While some recent qualitative surveys have highlighted consumers drinking less, the quantitative data does not show the same abrupt disruption.

Volumetrically, Beer stands at 47% of total servings, Spirits at 35%, and Wine at 18%. Total consumer spending on Beverage Alcohol is up +2.9% to $264.5 Billion – with Beer comprises 47%, Spirits at 25%, and Wine at 28% – highlighting the average premium per serving in the Wine category.

The key differentiator of the bw166 Total Beverage Alcohol Overview is that it seeks to address and measure the entirety of the industry, rather than merely highlighting subsets of the market. For example, Nielsen and IRI scan offerings provide exceptionally detailed data into major Off-Premise retailers but only account for, in the case of Wine, roughly 50% of the volume and 35% of the dollars. Similarly, other sources such as Beer Institute and the recently launched SipSource underrepresent the more niche products that are increasingly sought out by customers through the likes of local Brew Pubs, Saloons, and direct-to-consumer shipments. bw166’s reports provide the macro-context needed to understand and frame the dynamics of the U.S. beverage alcohol market.

For more details regarding the total beverage alcohol market, subscribe to the bw166 Total Beverage Alcohol Overview report.

The bw166 TBA Overview Advance report for June 2019 indicates a market continuing the long-term trend of total servings of beverage alcohol growing at the rate of increase in Legal Drinking Age Population – both having grown +1.0% over the last 12 months.

Spirits is gaining share of standardized servings with overall growth of +3.6% over the past 12 months.  Beer has been flat with servings showing negligible change. Wine is showing weakness with servings down -1.0% over the past year driven mostly by losses of low-end bulk imports.

Consumers continue to increase spend for beverage alcohol with overall spend up +2.8%.  However, most of this is driven by the on premise with spend growing +5.0% while off premise spend is only growing +1.0%. Over the past few months spending in the off premise has seen a deceleration.

On premise spending growth is being driven primarily by operator margin expansion so very little, if any, of this is seen by wholesalers or producers.

With a number of public companies reporting either quarterly or annual results for June, the following table highlights industry total metrics to compare against (wholesale value is used as a proxy for supplier revenues).

For more details regarding the total beverage alcohol market, subscribe to the bw166 Total Beverage Alcohol Overview report.

For twelve months ending September, the bw166 Total Beverage Alcohol Overview shows total consumer spending on beverage alcohol at $229.8 billion, an increase of 3.69% and a slight deceleration from the growth through August. The bw166 Total Beverage Alcohol Index, the standard in measuring overall consumption, stands at 119.6, a 0.96% increase over the prior twelve months.

Beer volumes entering the market are up 0.70% over twelve months but are down -0.66% over three months.  This is a continued deceleration in the overall beer market.

Spirits volumes entering the market are up 1.36% over twelve months and up 1.91% over three months. This is a slight slowing of the Spirits market versus results for twelve months through August.

Wine volumes (including Cider, which is not materially impacting trends) entering the market are up 3.10% over twelve months but are only up 0.64% over three months.  This is a slight deceleration versus the twelve months through August but an improvement for the three months through August.

Overall consumer goods sales for the last twelve months through august in relevant channels are as follows:

• Supermarkets & Grocery Stores: +1.65%
• Beer, Wine and Liquor Stores: +3.01%
• Warehouse Clubs & Supercenters: +1.09%
• Full Service Restaurants and Drinking Places: +6.77%.