The billion dollar weeks keep coming for the beer category in off-premise retailers.
Beer category sales (beer, FMBs and cider) in off-premise channels increased 14.9%, to $1.007 billion, for the week ending July 11 compared to the same week one year ago, according to market research firm Nielsen. That makes eight consecutive weeks of at least $1 billion in dollar sales in off-premise retailers for the beer category.
Year-to-date, beer category dollar sales in off-premise retailers are up 15.5%, to $24.06 billion, for the 28 weeks ending July 11 compared to last year.
Total alcohol dollar sales growth increased 17.3% for the week, led by spirits (+25.5%) and wine (+16.6%), Nielsen reported. Nevertheless, total alcohol sales declined 14.1% compared to the previous week, which included the July 4 holiday.
For the week ending July 11, core beer (minus FMBs, seltzers, cider, etc.) increased dollar sales in off-premise retailers by 7.6% compared to the same week in 2019.
Cowen analyst Vivien Azer noted that off-premise beer category trends have decelerated in the most recent four-week period ending July 11. Total beer sales increased 14.3%, but were down from the 12-week growth trend of +20.2%, which she attributed to restaurant re-openings across the country.
Hard seltzers remain the beer category’s growth driver, increasing dollar sales 149% in off-premise retailers during the one-week period. Hard seltzer’s dollar share of the beer category declined a bit, to 11% during the week, after nearly reaching 12% during the July 4 holiday week. Still, hard seltzer holding 11% dollar share of the beer category is an increase from earlier in the year.
Of course, topping the July 4 holiday week would have been a tough comparison, as the hard seltzer segment had its strongest sales week ever in off-premise channels, totaling $138 million.
Azer added that hard seltzer trends over that four-week period were up 172%, but much slower than the 12-week trend of +235%. Additionally, hard tea dollar sales in off-premise retailers are up 24% over the last month and 31% over the last 12 weeks. Craft beer growth over the last four weeks was up 11% versus 17% over the last three months.
Azer, citing Nielsen and Cowen data, also offered a look at year-to-date share trends for the top FMB makers, with White Claw and Mike’s maker Mark Anthony leading the way with 40.8% share, followed by Boston Beer (19.9%), Anheuser-Busch (9.9%), Diageo (8.3%), Molson Coors (6.6%), Constellation Brands (3%) and other brands (11.5%).
According to Cowen, Bud Light Seltzer sales accounted for 60% of A-B’s FMB sales and drove 2.8 points of growth for A-B’s combined beer sales. For Boston Beer, dollar sales of Truly (+156%) and Twisted Tea (+27%) in off-premise retailers had decelerated over the last month compared to 12-week trends of +185% and +33%, respectively. Although Constellation Brands holds just 3% dollar share of FMBs year-to-date, the company has improved its dollar share to 4% over the last month and hard seltzer accounting for 5.1 points of the company’s beer growth.
Speaking of Boston Beer, the Truly Lemonade mix pack was the second biggest growth driver among brand extensions over the last week, trailing just Anheuser-Busch’s Michelob Ultra. Mark Anthony Brands’ second White Claw variety pack came in third for the week.
Michelob Ultra also helped drive the super premium segment’s growth for the week, which increased 19.6%.
Craft beer also returned to double-digit growth, increasing off-premise dollar sales by 10.6%. Dollar sales of Mexican imports increased 8.2%. Although dollar sales of Mexican imports were up, Nielsen VP of beverage alcohol practice Danelle Kosmal explained that it was “still much lower than the COVID year-to-date dollar growth rates for Mexican imports, which is 16.8%.” That was likely due to out of stock issues hampering growth.
The only segment for the week in the red was below premium offerings, which declined 1.6% compared to the same week a year ago. Premium lights (+5%), FMBs minus seltzers (+6.7%), and cider (+2.3%) all increased sales in off-premise channels.
Nielsen also shared a look at e-commerce sales during the COVID-19 pandemic. For the COVID period in the U.S. from the first week of March through June 27, dollar sales of total alcohol increased 309% in off-premise retailers, compared to the same period in 2019.
“Week over the week, alcohol was the fastest – or one of the fastest – growing categories in e-commerce channels,” Kosmal wrote. “We should note, however, that alcohol is also one of the smallest categories in e-commerce channels, so there is a lot of opportunity for growth.”
Kosmal noted that across total consumer goods, the growth rates of click and collect (+95%) have exceeded those of delivery (+39%) for the week ending July 4.
“Growth rates for click and collect alcohol have maintained triple-digit growth throughout COVID,” she added. “Across the three categories in alcohol, wine maintains the bulk of the share of online alcohol sales, however, spirits has been gaining share throughout COVID. The challenge of course for beer is to identify ways to gain a bigger piece of that online pie.”