Nielsen: Off-Premise Beer Sales Growth Begins to Slow in Final Full Week of June

The slow down in off-premise beer sales began to set in during the last full week in June, but as states began to shut down on-site sales for a second time, another spike is expected.

For the one-week period ending June 27, beer category dollar sales increased 16.1%, to $1.007 billion, according to data shared by market research firm Nielsen. Excluding FMBs, hard seltzers and cider, core beer dollar sales increased just 8.1% .

“We are finally seeing the off-premise slowdown that many of us expected to see several weeks ago, when on-premise started opening up,” said Danelle Kosmal, Nielsen VP of beverage alcohol practice. “For the week ending June 27, 2020, total alcohol off-premise alcohol sales were up 19.2%, which is the second slowest growth week since mid March.”

Nevertheless, the last full week of June marked the fifth time in the last six weeks that beer category sales topped $1 billion. Year-to-date, beer category sales are up 16%, to $21.8 billion. During the COVID-19 weeks, from early March through June 27, beer category dollar sales have increased 21.1%, to $15.8 billion.

The slowing growth trends in off-premise retailers — which many had predicted as states began reopening bars, restaurants and brewery taprooms — is likely to be short-lived, as Texas, Florida, Arizona and Colorado, several counties in California and Pennsylvania, Michigan, Tennessee and Wisconsin have moved to cease on-site sales.

“If the on-premise would have continued to open up, we think this slowing of off-premise trends would have continued in upcoming weeks, as alcohol volume would have increasingly shifted back to the on-premise,” Kosmal added. “However, with the second round of on-premise closures happening in key states across the country, we should expect to see an uptick again in off-premise growth, particularly for the next two weeks of data, which will include July 4 sales.”

Although the hard seltzer segment increased sales 187%, the segment’s growth rate dropped below 200% for the first time since November 2019. Compare that to the one-week period ending June 20, when hard seltzer dollar sales were up 234%.

“However, this doesn’t minimize the total size of seltzers, which sold $107 million in Nielsen off-premise channels for the latest week (the second largest week ever for hard seltzer sales – next only to the week leading up to Memorial Day 2020),” Kosmal wrote. “Hard seltzers continue to chip away at dollar share, accounting for 10.7% of category dollars for the latest week. Seltzers now have annual sales of $2.8 billion (latest 52 weeks) in Nielsen off premise channels, up $2 billion in annual sales from a year ago.”

Seven of Nielsen’s top 10 growth brands for the week were hard seltzers; beer brands making the list included Michelob Ultra, Modelo Especial and Corona Extra.

Other segments growing sales for the week ending June 27 included super premiums (+16.7%), craft beer (+12.9%), Mexican imports (+11.2%), FMBs excluding seltzers (+10.4%), premium lights (+4.4%) and cider (+1.6%).

Below premiums were in the red for the week, with sales declining 0.6%, which Kosmal noted was the first time any segment in the beer category posted negative growth trends since the first week of March.

Meanwhile, Nielsen CGA, the market research firm’s on-premise channel data arm, shared an analysis for the two weeks ending June 27 in five states — California, New York, Texas, Florida and Illinois. Several of those states took action to curb on-site consumption heading in the July 4 holiday weekend.

Nielsen CGA found that velocity improved to -10% versus the pre-COVID-19 norm for the week ending June 27, which was a 220% increase over March 28.

Even before Texas and Florida shut down on-site consumption for a second time, velocity in those states was slowing down. In Florida, velocity was flat (-0.2%), while velocity declined 4% in Texas through June 27.

In New York, which has only just begun to ease restrictions in the New York City area, velocity increased 53% for the week ending June 27 compared to the previous week. Velocity statewide in New York increased 24%.

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