Pandemic Pantry Loading: A Half Bottle of Wine and a Half Bottle of Spirits

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  • The Beverage Alcohol market has been relatively resilient through the pandemic, although the impact on individual industry members varies broadly.
  • Some data, such as Nielsen trends, highlight the remarkably strong growth of the industry. However, at times, these trends are misconstrued to suggest that alcohol consumption is up significantly – this perception may pose a risk to excise tax increases or pushback against the industry.
  • Instead, for the twelve months ending September, the bw166 Total Beverage Alcohol Index stands at 125.3, a +1.9% increase over a year ago.
  • Official data from states representing 30% of the U.S. Legal Drinking Age (LDA) population has been released through August and for the six months ended August 2020 reflect:
    • Beer shipments are flat.
    • Spirits shipments are +7.6%.
    • Wine shipments are +6.3%.
  • While the Legal Drinking Age (LDA) population is up +1.0%, the increased growth of beverage alcohol translates to an incremental half bottle of wine and a half bottle of spirits per LDA adult. This small increase is more likely the result of incremental pantry loading than an indicator of increased consumption.
  • On-Premise trends are more difficult to monitor; however, several states (representing 12.5% of the LDA population) have released official tax data through August.
    • In April, On-Premise spending for Beverage Alcohol was down -84.4%. 
    • In August, On-Premise spending for Beverage Alcohol partially recovered and is only down -38.6%. 
    • Note that these states generally re-opened On-Premise earlier than other markets, so National trends are likely weaker.
  • Ultimately, the current forecast model developed by bw166 indicates that overall beverage alcohol consumption will grow slightly faster than the LDA population in the calendar year 2020 – likely a result of minimal pantry loading, as noted above. 
  • More detailed information on these trends is available in the bw166 Total Beverage Alcohol Overview.

TTB Approved 165.6K Products L12M through September 2020, A Decrease of -9K (–5.2%)

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By Category:

  • Beer: 40.1K products approved over the L12M (–0.3% vs. last year) and 9.9K over the L3M (–13.7% vs. last year)
  • Spirits: 18K products approved over the L12M (+22.1% vs. last year) and 4.5K over the L3M (+11.7% vs. last year)
  • Wine: 107.6K products approved over the L12M (–10.2% vs. last year) and 24.8K over the L3M (–30.4% vs. last year)

By Origin:

  • Domestic: 90.6K products approved over the L12M (+5.4% vs. last year) and 22.2K over the L3M (–9.2% vs. last year)
  • Imports: 75K products approved over the L12M (–15.4% vs. last year) and 17K over the L3M (–36.1% vs. last year)

For more information regarding Product Approvals including detailed category breakdowns and origin information (State for Domestic products and Country for Imported products), subscribe to the bw166 Product Approvals Report or visit our website at www.bw166.com.

Beer, Spirits, & Wine – Packaged Imports Decline -5% By Value Over L12M through August 2020, Packaged Exports Grow +2%

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Total Beverage Alcohol:

  • Total beverage alcohol imports (including bulk and packaged) declined -4% by value over the last twelve months and declined -5% by value over the last three months. 30% of all imported beverage alcohol by value came from Mexico over the last twelve months.

  • Total beverage alcohol exports (included bulk and packaged) declined -1% by value over the last twelve months and declined -18% by value over the last three months. 22% of all exported beverage alcohol by value went to Canada over the last twelve months.

Each of the bw166 Import and Export Reports (for Beer, Spirits, and Wine) enable tracking Beverage Alcohol imports and exports on a monthly basis for volume, value in USD, and value in local currency for all major trading countries.

Beer:

  • Imported beer declined -5% by volume and declined -2% by value over the last twelve months. Over the last three months, imports grew +0% by volume and grew +3% by value. 71% of imported beer by value comes from Mexico.
  • Exported beer declined -24% by volume and grew +9% by value over the last twelve months. Over the last three months, exports declined -34% by volume and declined -9% by value. 19% of exported beer by value goes to Chile.

For more details regarding imported and exported beer across all countries, subscribe to the bw166 Beer – Imports and Exports report.

Spirits:

  • Imported packaged spirits for the last twelve months grew +2% by volume and declined -6% by value. Over the last three months, volumes grew +5% and declined -6% by value.
  • Imported bulk spirits for the last twelve months grew +12% by volume and grew +16% by value. Over the last three months, volumes grew +9% and grew +4% by value.
  • 30% of all imported packaged spirits by value arrived from France while 48% of all imported bulk spirits by value arrived from Brazil.
  • Exported packaged spirits for the last twelve months declined -37% by volume and grew +5% by value. Over the last three months, volumes declined -27% and declined -26% by value.
  • Exported bulk spirits for the last twelve months grew +11% by volume and declined -4% by value. Over the last three months, volumes grew +37% and declined -20% by value.
  • 28% of all exported packaged spirits by value is destined for Panama while 23% of all exported bulk spirits by value is destined for Canada.

For more details regarding imported and exported spirits including detailed category breakdowns across all countries, subscribe to the bw166 Spirits – Imports and Exports report.

Wine:

  • Imported packaged wine for the last twelve months grew +9% by volume and declined -6% by value. Over the last three months, volumes grew +13% and declined -14% by value.
  • Imported bulk wine for the last twelve months grew +14% by volume and grew +17% by value. Over the last three months, volumes grew +18% and grew +46% by value.
  • 36% of all imported packaged wine by value arrived from Italy while 25% of all imported bulk wine by value arrived from Chile.
  • Exported packaged wine for the last twelve months declined -13% by volume and declined -6% by value. Over the last three months, volumes declined -22% and declined -15% by value.
  • Exported bulk wine for the last twelve months grew +10% by volume and grew +3% by value. Over the last three months, volumes grew +40% and grew +24% by value.
  • 39% of all exported packaged wine by value is destined for Canada while 58% of all exported bulk wine by value is destined for United Kingdom.

For more details regarding imported and exported wine including detailed category breakdowns across all countries, subscribe to the bw166 Wine – Imports and Exports report.

Beverage Alcohol and the Pandemic

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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.

TTB Approved 170.1K Products Over L12M through August 2020, A Decrease of -0.7K (–0.4%)

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By Category:

  • Beer: 40.5K products approved over the L12M (+2.3% vs. last year) and 9.4K over the L3M (–10.5% vs. last year)
  • Spirits: 17.9K products approved over the L12M (+23.9% vs. last year) and 4.5K over the L3M (+11.9% vs. last year)
  • Wine: 111.7K products approved over the L12M (–4.3% vs. last year) and 27.7K over the L3M (–16.2% vs. last year)

By Origin:

  • Domestic: 91.8K products approved over the L12M (+9.3% vs. last year) and 23K over the L3M (+1.2% vs. last year)
  • Imports: 78.3K products approved over the L12M (–9.7% vs. last year) and 18.6K over the L3M (–25.2% vs. last year)

For more information regarding Product Approvals including detailed category breakdowns and origin information (State for Domestic products and Country for Imported products), subscribe to the bw166 Product Approvals Report or visit our website at www.bw166.com.