Editor’s Note: 3 Up, 3 Down with 3 Tier Beverages is a quarterly insights series available to Brewbound Insiders, via the Chicago-headquartered, beverage-alcohol-focused consulting and data firm.
In the final installment of 2024, 3 Tier consultant Danelle Kosmal shares a trio of insights on industry growth, with NIQ off-premise data through November 2. Hot topics include Halloween spending, craft light beer and seasonals, spirits-based ready-to-drink cocktails (RTDs) and more.
THREE UP
Boo-zy Halloween Spending
For the two weeks ending November 2, total beverage-alcohol dollars grew +0.8% compared to the same period last year. Beer was the standout category for Halloween, with off-premise dollar sales up +2.4% year-over-year (YoY). Growth in beer spanned all price tiers, with notable increases in imports (+7.9%), flavored malt beverages (+7%), super premium (+6.5%) and below premium (+1.8%).
The top growth brands included Constellation Brands’ Modelo Especial and Corona and Anheuser-Busch (A-B) InBev’s Michelob Ultra and Busch Light. Beer sales were strong across most major channels, with c-store and liquor channels as key drivers, both up +2.9%.
While spirits have typically been outpacing growth of beer, for Halloween the total spirits category lagged beer slightly, up +1.2% in NIQ off-premise channels. Wine lagged both categories, with dollar declines of -3.6%.
Craft Light Beer
If you have taken a look at craft beer style performances recently in NIQ off-premise data, you may have noticed the impressive growth of light lagers, up +88% and the third largest contributor to dollar growth among craft beer styles for the latest 13 weeks (L13W). But what is the bigger picture for light craft beer and what is driving the growth?
Overall, craft light beer is up +11.8% for the L13W compared to the same period last year. Additionally, the segment gained +0.5 share point from 2023, although it is still relatively small and accounts for 4% of total off-premise craft dollars.
The growth story of craft light beer is largely driven by non-alcoholic (NA) beer, rather than “light” beer, as many of the top brands are NA craft beers. Blue Moon NA and Athletic lead this trend, representing six of the top 10 brand extensions in craft light beer.
NA beers represent 43% of the light craft beer off-premise dollars, and they are driving nearly all of the growth in the light craft segment. Without NA brands, light craft beer dollars would be declining by -7.8%.
However, there are a few notable light craft beers (with alcohol!) that are contributing to growth, including Samuel Adams American Light, Hulk Hogan’s Real American Light and Rhinegeist Cincy Light lager.
Spirit RTDs
Amid slowing growth and downward trends for many alcohol segments, spirits-based RTDs continue to experience strong double-digit growth, up +21% for the L13W. Vodka-based cocktails, which initially dominated the RTD market, remain the primary choice, accounting for 60.4% of spirit-based RTD dollar sales.
Tequila-based RTDs are also growing rapidly, capturing 18.7% of the market. Together, vodka and tequila-based RTDs make up 79% of total spirit-based RTD sales, with both alcohol types growing at similar rates (vodka up +21.2%, tequila up +21.4%).
A slight -0.8% decline in the average price of spirit-based RTDs over the same period may be contributing to this growth, with prices of vodka- and tequila-based products relatively stable, showing only minor changes of -0.1% and -0.2%, respectively.
THREE DOWN
Red Wine
Cabernet sauvignon, the wine category’s largest varietal in terms of dollar share, declined by -2.6% for the L13W compared to the same period in 2023. Cabernet was the third largest contributor to table wine declines, after red blends (-6.2%) and chardonnay (-3.3%).
Despite the declines, cabernet sauvignon has maintained share for the past several years, even gaining +0.2 share points for the L13W. This was likely at the expense of red blends and merlot.
Craft Beer Seasonals
In NIQ off-premise channels, seasonals were the top “style” contributor to craft beer dollar declines for the L13W, down -8.3%. The segment accounted for 27% of craft beer dollar declines.
You may remember that during the pandemic, seasonals experienced a bump in share of craft in off-premise channels. However, the segment has since declined by nearly -2.5 share points.
The most significant declines are in the Midwest (West North Central and East North Central divisions, down -17.4% and -13%, respectively) and the Pacific division (-11.1%). Seasonals are particularly challenged in the California liquor channel, where the segment declined in dollar sales by -18.5% for the L13W.
Large Spirits Categories: Whiskey, Vodka and Cognac
For the L13W in NIQ off-premise channels, most spirits categories are in the red, with the exception of prepared cocktails, tequila and non-alcoholic products. Without prepared cocktails, spirits would be down -0.5% in dollar sales for the latest time period.
Whiskey (-1.6%), vodka (-2.3%), and cognac (-11%) were the largest contributors to declines, with whiskey alone accounting for one-third of overall declines in off-premise dollars sales for spirits.