Beer is starting to lose share of bev-alc dollar sales in the on-premise, according to a recent report by CGA, the on-premise arm of market research firm NIQ.
In the last 52 weeks (L52W, ending June 14), beer claimed 39.5% share of total bev-alc dollar sales in NIQ-tracked on-premise channels, marking a 0.3 percentage point decline year-over-year (YoY).
Meanwhile, ready-to-drink cocktails (RTDs) and spirits gained share in the L52W: RTDs +0.4 points, to 1.3%; spirits +0.1 points, to 46.6%. Wine’s share declined 0.1 percentage point, to 12.7%.
Results within beer are more mixed, according to the report.
Imports lead positive trends within the category, with dollar sales (+3.2%) and volume (+3.1%) both increasing YoY in the L52W. The segment recorded the largest share gain of total beer on-premise dollar sales in the period (+1.3 share points, to 23.3%), knocking on the door of domestic premium (24.8%) for the second largest share in the category.
The segment’s on-premise growth comes as imports face declines in the off-premise – a flip in trends compared to the segment’s double-digit growth in previous years. In about the same 52-week period (data ending June 15), import off-premise dollar sales declined 2.5% YoY, while volume, measured in case sales, was down 4.2%.
Imports have the largest opportunities to expand on-premise growth in California and New York, according to CGA, which analyzed segments’ trends – such as rate of sale and total distribution points – across a handful of states.
California and New York are the top two states for imports in terms of “value” per outlet (i.e. dollars per distribution point), and are two of the segments top three largest markets for total on-premise sales, CGA reported. However, they both rank among the bottom five in terms of imports’ distribution share of total distribution points (TDP) in the states, suggesting import brands can have plenty of room to expand into more outlets.
Other strong markets in terms of total on-premise import sales include Texas and Colorado, while New Mexico and Nevada also rank high in value per outlet.
Gains in share of total on-premise beer dollar sales were also recorded by domestic super premium (+0.6 points, to 9.9%) and below premium (+0.2 points, to 5.6%). Domestic super premium recorded larger dollar sales growth than imports (+3.7%), while volume increased 2.4% YoY. Below premium dollar sales increased 1%, while volume was just above flat (+0.3%).
Domestic super premium’s strongest markets by value are Nevada and Arizona, which have both recorded gains in dollars per distribution point in the L52W (+8.8% and +6.3%, respectively). However, both recorded TDP declines (-2.1% and -1.5%, respectively).
Other key markets for the segment include Tennessee, Texas and Florida, which each have high distribution percentages and high value.
Below premium’s strongest market is Illinois, where the segment recorded its largest TDP share (-3.5% YoY) and value per TDP (+5.7% YoY). Other states with high TDP and value for the segment include Ohio and Pennsylvania.
Craft is still the largest beer segment in the on-premise (27.8% share of total beer dollar sales), despite recording the largest decline in share in the L52W (-1.4 share points) and second-largest dollar sales (-7.3%) and volume (-11.2%) losses YoY.
California is the largest state for craft in terms of on-premise dollar sales (outright and per TDP). However, its TDP share of total outlets in the state underindexes compared to the national average for the segment. States with high craft TDP share and value include Pennsylvania, Ohio and Illinois.
Hard seltzer recorded the largest YoY on-premise declines in both sales (-12.8%) and volume (-16.2%). The segment has 2.4% share of total on-premise beer dollars in the L52W, declining 0.3 share points in the period. The segment has a low TDP share in most states as on-premise retailers continue to pull back from the segment in favor of ready-to-drink cocktails (RTDs) and other spirits-based offerings.
Opportunities for hard seltzer are greatest in New York and Pennsylvania, according to CGA. The two states are the largest in terms of hard seltzer dollar sales per TDP, but among the lowest in the segment’s share of TDP.
Hard cider (dollar sales -1.6%, volume – 5.2%) and flavored malt beverages (FMBs) (dollar sales -5.3%, volume -10.5%) both maintained share of on-premise beer dollars in the L52W (1.2% and 0.8%, respectively) despite dollars sales and volume declines. CGA did not share state-specific data for either segment.
Total on-premise sales velocity across food and beverage increased 6% YoY in the latest week (data ending August 9), according to a report shared by CGA Thursday. Ticket count also grew YoY (+8%), while check value was down 2%, to an average of $55.76.
All five key states observed by CGA in its weekly reports (New York, Illinois, California, Texas and Florida) recorded YoY on-premise sale velocity growth in the latest week, led by Florida, which posted a 20% YoY gain, despite a 2% decline week-over-week (WoW).
New York recorded the next largest YoY growth (+9%) and was the only state to improve trends WoW (+7%). Illinois (-10% WoW), California and Texas (both -1% WoW) all increased sales velocity 5% YoY.