Consumers wallets are feeling the strain, but it’s not stopping them from spending in on-premise retailers, National Beer Wholesalers Association (NBWA) chief economist and VP of analytics Lester Jones shared during a webinar Thursday.
Jones was joined by Fintech VP of distributor strategy Eric Kiser in a joint presentation on beer category trends through Q3.
Contrary to what scan data may suggest, consumer spending on food and beverage isn’t going away – instead it is changing, the duo shared.
After a notable dip in food and beverage spending away from home in 2020 with the onset of the COVID-19 pandemic and related on-premise shutdowns, away from home spending rapidly increased, and by the start of 2023, that spending surpassed at home purchases for the first time, Jones shared.
Spending away from home has remained above spending at home ever since, and continues to rise at a faster rate.
“The narrative for me is that people want to be away from home, they want to be out, they want to be socializing,” Jones said. “It’s an important narrative, and the data continues to support it.”
However, the on-premise and away-from-home venues are also simply more expensive now, and prices of bev-alc products in those channels have increased more severely than those in off-premise retailers.
The Consumer Price Index (CPI) for bev-alc away from home rose at a higher rate than bev-alc at home in 2021, and the gap between the two has continued to widen, with the CPI for beer at home plateauing in the past year.
“While there hasn’t been a lot of pricing off-premise – which many you are painfully aware of – that away-from-home, or that on-premise, the sociable channels continue to have pricing power, because that’s where the demand is, that’s where people are headed,” Jones said.
Retailers are paying attention, and putting their money where the power is, according to Fintech retailer purchase data.
Fintech’s database is made up of 281,726 on- and off-premise retailers, including more than 123,000 independents. Data is based on retailer invoices from wholesaler orders.
Total retailer purchases are at $52.9 billion year-to-date (YTD), down from $54.6 billion in the same period in 2024. That decline was driven by a $1.8 billion decline in off-premise purchases (-3.8%), which far outweighed a $200 million increase in on-premise retailer spend (+1.8%). With those shifts, on-premise retailers have been able to gain share of total retailer purchase dollars, from 14%, to 14.7%, while off-premise share declined from 86%, to 85.3%.
Across beer, premium lights have the largest share of on-premise retailer purchase dollars (41.5%) and continue to gain share (+0.5 points YTD). The segment also overindexes in the channel compared to the off-premise, where it holds 29.8% share of retailer dollars.
Other over-indexers in the on-premise include craft, with 18% share on-premise (-0.7 points YTD), and 10.3% share off-premise (-0.5 points); and hard cider, with 1.4% share on-premise (-0.1 points), and 1.1% off-premise (flat).
Despite declines, craft has the third-largest share of on-premise retailer dollars. Jones encouraged craft suppliers to take advantage of that prominence.
“If you’re a craft brewer and you’re not concentrating on fun, sociability and getting out there, you’re missing a big opportunity in our marketplace today,” Jones said.
Meanwhile, many of the segments that underindex in the on-premise are gaining share, suggesting opportunities for continued expansion, including:
- Imports, 24% share of on-premise retailer purchase dollars (+0.5 points YTD), 25% of off-premise retailer purchase dollars (+0.6 points YTD);
- Premium regular, 3.3% on-premise (+0.4 points), 8% off-premise (+0.4 points);
- Below premium light, 5% on-premise (+0.1 points), 5.8% off-premise (flat);
- And non-alcoholic (NA), 1.1% on-premise (+0.2 points), 1.7% off-premise (+0.4 points).
The largest discrepancy in on- versus off-premise share is beyond beer. The segment has 14.7% share of off-premise retailer dollars (-1 point YTD), the third-largest across beer segments. However, it has the fifth-largest share of on-premise retailer dollars (4%, -0.9 points YTD).
At the supplier level, Anheuser-Busch InBev (A-B) has the largest share of both off-premise (30.9%) and on-premise (33.3%) retailer purchase dollars, and that share is growing (+0.5 points and +1 points, respectively). Other major beer brands gaining share in the on-premise include:
- Constellation Brands, +0.6 points, to 13.6% (off-premise -0.3 points, to 18.2%);
- Diageo, +0.3 points, to 1.7% (off-premise flat, at 1.7%);
- And Yuengling, +0.2 points, to 2.6% (off-premise flat, at 1.5%).
Molson Coors has the second-largest share of on-premise retailer dollars (-0.2 points YTD, to 26%), overindexing compared to the off-premise, where it has the third-largest share (-0.3 points, to 18.2%).
“There’s definitely some work for the new leadership team there to really think long and hard about what they’re doing with their on- and off-premise, and how they’re marketing those brands out there,” Jones said.
The fourth-largest share behind Constellation is “all others” or all other suppliers beyond the top 10 (-0.6 points YTD, to 10.2% of on-premise retailer dollars). The “all others” trends give insights into greater category patterns and suggest that suppliers are overall underindexing in the on-premise compared to the off-premise, where they hold 11.3% share (-0.4 points YTD), highlighting the industry’s move away from the on-premise in the post-pandemic era.
“Part of the problem in 2023, ’24 and ’25 is that people don’t want to be shopping in grocery stores – they did enough of that in ’20 and ’21 and ’22 and they want to be out,” Jones said. “And the dollar expenditures by consumers fully supports that hypothesis.
“So the brewers who are doubling down on the off-premise, your consumer just probably doesn’t really want to be there, and plus inflation kind of got them scared of going into those stores, so they’re probably looking elsewhere for that stuff.”
Jones also pointed to the “all others” share losses as a display of the “rationalization” happening in both channels, as retailers and distributors alike are “trying to be more productive.”
“The long tail that we lived off of from 2010 to 2019 is not there to drive that industry forward,” Jones said.
Similar patterns arise when analyzing top brand share of on- and off-premise retailer purchases. Beer brands beyond the top 10 account for 42.7% share of on-premise retailer dollars (-0.5 points YTD), and 44.4% in the off-premise (-0.5 points YTD).
A-B’s Michelob Ultra has a dominant share of on-premise dollars (14.7%) and continues to gain share (+1.4 points YTD). The second-largest shareholder is Constellation’s Modelo Especial (7.7%, +0.8 points YTD).
The two brands have a tighter battle for the top spot in the off-premise, each holding 9.3% share YTD (Michelob Ultra +0.8 points YTD, Modelo +0.2 points).
A-B’s Busch Light is the only other top 10 brand to gain share of both on-premise (+0.4 points, to 2.4%) and off-premise (+0.4 points, to 3.5%) retailer purchases. The remaining top 10 brands all posted flat share or losses in both channels, led by A-B’s Bud Light (on-premise -0.6 points, to 6.8%; off-premise -0.4 points, to 6.9%), followed by:
- Molson Coors’ Coors Light, 9.1% on-premise (flat YTD), 6.1% off-premise (-0.1 points);
- Molson Coors’ Miller Lite, 9.8% on-premise (-0.3 points), 6% off-premise (-0.1 points);
- Constellation’s Corona Extra, 3% on-premise (-0.5 points), 5.3% off-premise (flat);
- Mark Anthony Brands’ White Claw, 1.6% on-premise (-0.2 points), 3.8% off-premise (flat);
- A-B’s Budweiser, 1.6% on-premise (-0.2 points), 3.2% off-premise (-0.1 points);
- And Boston Beer Company’s Twisted Tea, 0.6% on-premise (-0.1 points), 2.4% off-premise (-0.1 points).