Today, bw166 released the Total Beverage Alcohol Advance for June 2020. Additionally, to review the impacts of COVID-19 on the beverage alcohol industry, bw166, in conjunction with Gomberg & Fredrikson, will be presenting a joint webinar hosted by industry veteran Jon Moramarco on Thursday, August 6th at 10:00 AM PT / 1:00 PM ET.
Key industry trends through June:
The bw166 Serving Index has grown +1.8% over the last twelve months versus the LDA population growth of +0.8%, a slight increase in per capita consumption.
Three-month volume trends are:
Three-month consumer spending trends are:
Three-month equivalent wholesale value trends are:
The bw166 / Gomberg & Fredrikson webinar will discuss:
Six-month and three-month total U.S. market trends across beverage alcohol segments
Impact on per capita consumption and the share of Beer, Spirits, and Wine
Individual trends for Beer, Spirits, and Wine
Import & Export trends for Beer, Spirits, and Wine
A deeper dive into wine market trends due to direct-to-consumer activities
Insights based on available excise tax payments for specific markets and economic data from various government sources
This data gives a full market overview as opposed to many sources that measure only specific channels or rely on survey data.
To register for the webinar on August 6th at 10:00 AM PT / 1:00 PM ET
bw166 released The Total Beverage Alcohol Overview for April 2020 utilizing tax paid data, government data sources, and other resources to give a perspective on the US Beverage Alcohol market. While the COVID-19 pandemic has caused alterations to the methodologies to track the significant shifts, bw166 continues to use actual data to provide a complete picture of the US.
Critical insights for April, the first full month of “stay at home”:
The 12-month serving index is up +2.4% versus LDA population growth of +1.0% – indicating US consumers have increased their overall consumption slightly while being home.
The significant shift from On-Premise to Off-Premise has reduced total consumer spending (due to On-Premise mark-ups) despite increases in volume.
Texas tax receipts in On-Premise accounts are down -88% year over year compared to +6% for 2019 (note that this data only includes On-Premise accounts that can sell Beer, Spirits, and Wine).
NABCA markets (excl. PA) show Spirits volumes +14.6% for the month. As these stores sell to consumers and On-Premise operators, this represents a significant increase in Spirits share.
Several states have released official reports for April which show Beer volumes -0.6%, Spirits volumes +5.7%, and Wine volumes +4.2% (inc. AK, IL, MO, NE, OR, TN, and WI which represented 12% of the LDA population and 12% of TBA servings in 2019).
The equivalent wholesale value of Beer and Spirits were up in April versus a year ago. Wine’s wholesale value was down due to the combined impact of significant declines in On-Premise and winery tasting rooms (bw166’s equivalent wholesale value represents the value as if 100% of business sells through the three-tier system).
Ultimately, the US Beverage Alcohol market is sustaining the impacts of COVID-19 far better than most countries with the Spirits category, the clear winner in gaining market share during the pandemic.
The March edition of bw166’s Total Beverage Alcohol Overview was released yesterday.
The market has changed dramatically during March. Some highlights include:
Pantry loading is evident in March with the
Total Beverage Alcohol Index increasing 3.0% over the last twelve months – typically,
this increases at an annual rate of 1.2%.
Off-Premise channels increased Beverage Alcohol
sales by volume between 24% and 27%.
Volumes in On-premise Eating and Drinking Places
declined by just over 50%.
On-Premise employee wages declined by 38%, which
will continue in April.
In April, volume sold through the On-Premise will
continue to decline between 80% and 90% versus April 2019. The Off-Premise will likely make up this
volume. However, margins will contract
as; generally, On-Premise has higher margins.
Recovery from the COVID-19 crisis will not be quick. Some form of social distancing will likely be
mandated until either a viable treatment is available or a vaccine is widely
available. The extension of social
distancing implies that Off-Premise sales will be bolstered from reduced
On-Premise consumption. Considerations
for the On-Premise include:
Limited seating, probably at 50% of standard
capacity, will be the norm, challenging many restaurants to be profitable.
Consumers will be hesitant to frequent
restaurants immediately upon opening, so even building to 50% of capacity may
Beverage Alcohol needs On-Premise for a healthy
and vibrant market. Suppliers and
wholesalers need to support the slow recovery of the On-Premise.
Rumors have circulated of laying off or
furloughing On-Premise staff at wholesalers or suppliers. Companies should consider the short term
benefits versus the long term challenges of hiring, training, and building
Wholesalers should reconsider supplier-dedicated
teams in the On-Premise during this recovery to improve operational
efficiencies and streamline the sales process for those accounts.
As the On-Premise opens to customers again,
Wholesalers and Suppliers need to establish reasonable expectations given the
slow recovery that will occur as well as be mindful of what is in the
best interests of On-Premise operators during this phase.
On-Premise accounts will have low initial order
quantities, which may lead wholesalers to limit deliveries or move to
Tele-Sales. While this may minimize
expenses in the short term, wholesales must also consider the long term
importance of building and maintaining relationships.
There is no doubt that Beverage Alcohol will not return to the old normal once this crisis has passed. Instead, a new normal will result, and a healthy and vibrant On-Premise market needs to be part of that norm.
The bw166 Total Beverage Alcohol Advance report shows overall consumer spending on Beverage Alcohol to be $277.5 Billion, +3.6% versus last year. Some key observations for twelve months ending January 2020:
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.
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.