bw166 released the Total Beverage Alcohol Overview for December 2021 today. With the pandemic continuing to distort the marketplace, the Beverage Alcohol Servings Index increased +4.7% to 130.7. This index measures product shipped into the market and is the most significant growth ever seen. The growth is primarily driven by the substantial increase in imported products attributable to restocking of inventories worked down in 2020, reversal of tariff impacts, and small brands getting back into the market. While supply chain disruptions may maintain elevated shipments into 2022, within the next 12 to 24 months, there will likely be a partial reversal in the Servings Index to more historical norms.
- The Overview also includes an annual review of all metrics from 2016 to 2021. The five-year CAGR for the Servings Index is 1.76%, with half of the growth coming in 2021
- Consumer spending on beverage alcohol rebounded, reaching $289.2 billion, a 14.7% increase over 2020. The major shift is attributed to the reopening of on-premise channels.
- Beer volumes were 210 million barrels, a +2% increase over 2020 with 82% of the growth driven by imports.
- Wine volumes were 476 million 9L cases, +4.6%. Domestic wines only grew +0.9%. Import growth was driven by: an +8.3% growth of still wines attributed to restocking and vermouth imports, a +41.7% increase of sparkling wine, and an +11.4% increase in flavored wine beverages. Imported flavored wine beverages totaled 27.2 million 9L cases in 2021, with significant growth in the first half of the year and declines in the back half of the year (trends are very similar to hard seltzer).
- Spirits volumes were 272 million 9L cases, +9.3%. Domestic volumes were up 6.7%, with key drivers being cordials/liqueurs and cocktails. Imported spirits were up 14.9% – the biggest drivers were tequila and whisky.
- Additional key five-year metrics for the industry include:
- Beer has lost -3.7% share of servings
- Wine has gained +0.5% share of servings
- Spirits has gained +3.2% share of servings.
- Consumer expenditures have grown +3.6% per year, indicating the continued trading up of consumers compared to the Servings Index growing 1.8% annually.
- Five-year CAGRs for volume growth are +0.2% for beer, +2.5% for wine, and +4.2% for spirits.
Despite the continuing pandemic, 2021 was a good year for the beverage alcohol industry. However, 2022 will be more challenging with a continuing fight for share between beer, wine, and spirits.
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:
- Beer -3.6%
- Spirits +2.4%
- Wine +3.9%
- Three-month consumer spending trends are:
- Beer -23.5%
- Spirits -22.3%
- Wine -16.2%
- Three-month equivalent wholesale value trends are:
- Beer -0.9%
- Spirits +4.5%
- Wine +1.9%
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
Registration for this webinar is limited — reserve your seat today.
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.
For more details please subscribe to the bw166 – TBA Overview.