October 7, 2020
2020 Trends That Will Likely Continue Into OND

We've been providing a pretty granular view of current trends with Nielsen's weekly updates. Today, we're zooming out for a full look at this year's summer trends from Memorial Day to Labor Day (week ended May 23 to the week ended September 12).

SPIRITS SALES UP $1.5 BILLION. Spirits sales were up $1.5 billion (almost 30%) this summer compared to 2019 in Nielsen-measured off-premise channels.

Consumers are continuing to trade up in the category, shifting their on-premise dollars to the off-premise. Indeed, ultra premium and premium price tiers accounted for 80% of total spirits dollar growth off-premise, with ultra premium leading the way, up 54.3% in off-premise channels for the summer.

Digging into major growth drivers by category, whiskey was the largest growth contributor, accounting for 31% of total off-premise spirits growth. Within whiskey, American whiskey was up just over 30% and Japanese whisky grew 65.6% over the summer, while other whiskey segments grew at a slower pace than other spirits.

Tequila is a runaway freight train. If you've been keeping up with the weekly updates, it won't come as a surprise that tequila was one of the fastest-growing categories over the summer, up nearly 64%.

Some categories, such as gin, experienced an initial bump in off-premise sales in the first months of the pandemic, but have since slowed. Tequila, on the other hand, has maintained its strong 50%+ growth throughout the pandemic.

Cognac also drove growth over the summer and "experienced a significant shift in trends during recent months," according to Nielsen. The category grew 43.8% for the first three months of COVID (March - May), and that growth has accelerated in recent months, up 61.1% over the summer. That accelerated growth was driven by growth in liquor and c-store channels.

Ready-to-drink cocktails are still a small category at just about 2.2% of spirits dollars for the summer, but that's double its share from summer 2019. The segment was up 162.4% for the latest 17 weeks, compared to the same weeks last year.

SPARKLING WINES TAKING SHARE. Over the summer, wine sales were up nearly 20% in off-premise channels compared to last year. At the onset of COVID, table wine outpaced sparkling wine growth, up 29% and 28.8%, respectively. But for the summer months, sparkling growth (up 33.3%) was nearly double that of table wine (up 15.9%).

Digging further into the sparkling category, prosecco experienced fairly consistent growth in COVID months, up about 34.4% over the summer. On the other hand, French Champagne was up just 17% the first three months of COVID, "followed by an extreme pick up in off-premise" over the summer, with sales up 65%.

Sauvignon blanc and red blends were the only varietals to grow share over the summer, with rose and pinot noir maintaining share. Meanwhile, all other table wine varietals "lost share of total wine as the popularity for sparkling wines and wine-based cocktails increased through the summer period."

LOOKING AHEAD. We asked Nielsen vp, bev alc practice Danelle Kosmal if she expects to see similar trends continue as we head into OND. She said: "During the first three months of the pandemic, we saw very drastic shifts in consumer behavior, sometimes from week to week. However, in May we started to see a shift, and consumers began settling into the 'next normal.' For the most part, consumer behavior has been somewhat consistent since then, and therefore, we have seen more consistent trends across total alcohol in off-premise channels."

She notes that trends vary by region, but that nationally trends have remained consistent. "For that reason, we could expect similar trends to continue through the next several months, unless there is a major announcement about a vaccine."

"Weather of course will play a role too," Danelle adds. "I think we should expect to see a shift that we typically see related to seasonality," such as rose growth slowing. "As cooler weather comes, the on-premise will face additional challenges, with outdoor patios closing. The restaurant industry has been very creative so far in adjusting to the unprecedented needs, and I expect they will continue to find creative ways to keep outdoor dining spaces open during cooler months. That said, there will still be a shift from on-premise back to off-premise."


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