Nielsen: Off-Premise Beer Sales Increase in All Segments As Consumers Stock Up Amid Coronavirus Concerns

As the coronavirus shut down on-premise channels in the U.S. and consumers began stocking up amid stay-at-home orders, sales increased for every beer category segment — and many increased double digits — in off-premise retailers tracked by market research firm Nielsen during the week ending March 14.

“I can’t think of a time in the past several years when all segments were up,” Danelle Kosmal, Nielsen’s VP of Beverage Alcohol Practice, told Brewbound.

Compared to the growth rates before the coronavirus took hold in the U.S. — the 13 weeks ending January 25 — the biggest increases were for total craft (+14.7% vs. a year ago) and independent craft (+17%), hard seltzer (+308%) and premium lights, Nielsen reported. Super premiums (+16.7%) and non-alcoholic beer (+48.6%) also grew double digits compared to a year ago.

However, increased sales in the off-premise aren’t enough to offset the loss of on-premise sales in bars, restaurants, taprooms and tasting rooms, which amount to about 20% of the total beer volume in the U.S. For craft brewers, those losses loom even larger.

Brewers Association (BA) chief economist Bart Watson has estimated that 40% of craft breweries’ volume flows through the on-premise channel, while roughly one out of every three beers sold on-premise is a craft offering. Additionally, Watson has estimated that small and independent craft breweries sold 3.6 million barrels of beer directly to consumers at their taprooms and tasting rooms in 2019.

In the wake of the on-premise shutdown, thousands of craft brewery employees nationwide have been laid off or furloughed.

For the week ending March 14, Nielsen reported that total beer dollar sales increased 14% compared to a year ago, while dollar sales of wine and spirits increased 28% and 26%, respectively. Compare that to the 5% growth for the total beer/FMB/cider category for the 13-week period ending January 25.

According to Kosmal, sales of pack sizes indicated consumers were stocking up, with larger packs outpacing the growth of smaller ones during the week. Dollar sales of 24-packs increased 28%, 30-packs sales grew 21% and 36-packs were up 40%.

“These are extremely significant increases if you compare to growth rates for 13 weeks ending 1/25/20, when dollar growth rates were +8%, -1.4%, and -2% respectively,” Kosmal wrote.

Meanwhile, dollar sales of 6-packs were up just 5%, while 12-packs increased 26%, which Nielsen attributed to hard seltzers. Hard seltzers made up seven of the top 15 growth brands, with White Claw’s variety pack taking the top spot, followed by Michelob Ultra and Miller Lite.

According to Bump Williams Consulting (BWC), which shared a slice of data from IRI and Nielsen, craft flagship brands also excelled during the one-week stock-up period. Sierra Nevada Pale Ale and Samuel Adams Boston Lager, which have both declined in recent years, “are up big over the latest 1 week.”

Beer sales increased 19% in the food channel as consumers consolidated grocery trips and stocked up; beer sales increased 6% in drug and 4.4% in convenience stores. Online sales increased 42%, although those were already up 34% for the 13 weeks ending January 25.

Most regions in the U.S. saw category growth rates two to four times higher than their year-to-date averages, except for California, which only increased 1.2 times, BWC reported.

The growth rates for beer sales were especially strong in Ohio (+38%), Pennsylvania (+33%) and Michigan (+36%), Nielsen reported.

So how sustainable is this growth?

“I think we’ll see the biggest jumps for the week ending March 14th and the week after that, and then we will start to see some of those spikes soften a bit,” Kosmal said. “A look into market by market will also be important. As cities and states enter a shelter-in-place phase, I think we can expect to see some spikes in sales for those markets, as consumers stock up and prepare to be at home for an unknown amount of time.”

Even with a spike in sales, total beverage alcoholic categories lagged behind the growth rates of other consumer goods, such as perishables, cleaning products, and toilet paper, Nielsen reported. Sales of total consumer goods increased 40% in Nielsen’s all outlet channels for the week ending March 14.

“To me, this is an indication that beverage alcohol is important to consumers, but other consumer good categories are being prioritized, at least for now,” Kosmal wrote. “As more and more on premise locations close, I think we will continue to see off premise sales for Beer, Wine, and Spirits grow even more, and closing the gap with other consumer goods.”