Dear Client: 

Total bev alc off-premise sales are up 25.7% in Nielsen-measured channels for the week ended March 7 through the week ended April 11, or what Nielsen has dubbed ‘COVID-19 to date.’ 

In the most recent week of data (ended April 11), total off-premise bev alc sales were up 26.2%. Wine and spirits continue to outpace that, up 32% and 33% for the week, respectively. Meanwhile, beer off-premise sales were up nearly 20% for the week. 

The Easter holiday falls in the week through April 11 data set, “most likely favorably impacting growth trends for this week” particularly benefiting wine “despite the less than celebratory broader atmosphere,” says Nielsen’s Danny Brager.  

WHAT’S HAPPENING ON-PREMISE. This latest update also includes what’s happening on-premise using Nielsen CGA RestaurantTrak data, which includes approximately 10,000 transaction level POS feeds from a demographically balanced set of largely independently owned units.

Restaurants aren’t totally closed down as consumers can still place pickup and delivery orders. Current growth is down more than 70% compared to pre-COVID norms. 

But, the data shows that velocity (average sales per the average outlet) declines week to week “appear to have stabilized among units that continue to operate – indicating some adaptation to current market conditions.”

Velocity grew 11% in the week ended April 11 versus the week ended April 4. That’s following a 7% velocity increase for the week ended April 4 versus the week ended March 28. The boost is driven largely by an increase in the average number of checks. Consumers are spending about the same amount each purchase, with the average amount per check remaining stable over the four weeks through April 11.  

ONLY 9% OF CONSUMERS ORDER ALCOHOL WITH TAKEOUT/DELIVERY. 62% of consumers said they’ve ordered food takeout/delivery in the two week period through April 11, according to a Nielsen CGA survey of 1,600 21+ consumers across New York, California, Florida and Illinois. 

But only 9% of those that ordered takeout/delivery food added alcohol to the ticket, “indicating significant upside opportunity for on-premise operators to creatively market ‘alcohol to go’ where allowable,” according to Nielsen CGA. 

The number of orders including alcohol increases to 17% among those aged 21-34. 

Of those surveyed that have ordered alcohol with takeout/delivery or would consider doing so, about half said they would consider ordering a cocktail kit or a pre-made cocktail. 

About 75% said they expect to pay more for a delivered bev alc drink than a retail store. But 60% of those surveyed said that they are more price conscious when ordering alcohol than they were pre-COVID. 

DRIZLY SALES UP 513%; HUGE INCREASES IN MIXERS

Bev alc e-commerce retail sales “continue to skyrocket,” reporting strong triple digit increases since the middle of March, according to Nielsen. For the week ended April 11, online bev alc sales were up 387%. On the Drizly platform, sales were up even higher.

For the week ended April 13, sales were up 513% over baseline on the Drizly platform. You may recall, the “baseline” is defined as the actuals 8 weeks prior, in January/February of 2020. 

“Daily sales in prior weeks have been more volatile, but we’ve seen a pattern starting to emerge over the last few weeks, with higher increases in sales occurring Monday – Wednesday,” showing that orders are distributing more throughout the week rather than focusing on the weekend, according to Drizly. 

New customers have been accounting for about 40% of orders. That number is typically closer to 15%. More importantly, consumers are returning, with the 7 day repeat rate doubling the week ended April 13. 

What are consumers buying? Pretty much the same things they’ve always bought through the platform. Red wine remains No.1, followed by white wine, vodka, bourbon, hard seltzer, alternative whiskeys and tequila. 

Though Drizly has seen a few notable increases in mixers since mid-March, “a potential indicator that folks may be experimenting with recipes or stocking up their bar cart while they’re home and unable to go out to on-premise locations.” 

Indeed, liqueurs, cordials & schnapps were up 985% for the week ended April 13, and mixers, syrups & bitters were up a whopping 1,354%.

RESTAURANT INDUSTRY COULD LOSE $240 BILLION IN 2020 

The restaurant industry lost $30 billion in March and is on track to lose $50 billion in April, according to a survey of 6,500 restaurants nationwide conducted by the National Restaurant Association. And, assuming a gradual reopening of the economy in June 2020, the association forecasts sustained loss of $240 billion by the end of the year. 

“The restaurant industry has been hardest hit by the coronavirus mandates – suffering more sales and job losses than any other industry in the country,” writes evp of public affairs Sean Kennedy in a letter to bipartisan congressional leaders. “As past recoveries have proven, we will be one of the slowest to bounce back.” 

60% of those surveyed say they won’t be able to keep employees on payroll under current federal relief programs. The industry has already lost about 8 million employees, or two-thirds of its workforce, as a result of COVID-19 closures, per survey. Not to mention, four in ten restaurants have closed their doors, “some with no hope of reopening.” 

As such, the association is calling on Congress to enact a “Blueprint for Recovery” which includes a $240 billion temporary emergency restaurant and foodservice industry recovery fund. 

TTB EXTENDS HAND SANITIZER GUIDANCE, TEMPORARILY CLOSES LABS

The Alcohol Tobacco Tax and Trade Bureau (TTB) issued an update yesterday, providing an extension to the hand sanitizer guidance as well as a notice that the agency’s labs will be temporarily closed until further notice as part of COVID-19 safety precautions.

You’ll recall, the TTB issued guidance last month on hand sanitizer production and, following the passage of the economic stimulus package, allows denatured or undenatured alcohol may be delivered tax-free to governments, hospitals, labs etc. for non-beverage purposes, e.g. hand sanitizer [see WSD 03-27-2020]. 

Yesterday, the TTB said they are extending “any exemptions, waivers, or other authorizations” provided in the previous guidance through December 31, 2020. 

As for the lab closures, that means the TTB can’t process any product samples or paper submissions submitted via mail until they reopen. To keep the wheels turning in the meantime, the TTB will: 

• continue to process formulas that do not require lab sample analysis 
• review supporting documentation for certain gluten content claims electronically in lieu of analyses
• review proofing device requests submitted electronically

“We are currently evaluating additional options to minimize delays for affected industry members as a result of the temporary closure of the laboratories during the pandemic, and we will update this information as appropriate,” per notice. 

WSD BRIEFS: 

BREAKTHRU BEVERAGE APPOINTS NEW EVP, FLORIDA. Breakthru Beverage Group has named Sean O’Connor as the evp of Breakthru Beverage Florida. In his new role, he will be responsible for leading all aspects of the organization’s business operations including growth strategies in support of suppliers and customers, per a release. Sean joined the company in 2012 as evp of South Carolina, and before that spent more than two decades with Brown-Forman. “Sean has been a successful leader on the supplier side and with Breakthru and he truly exemplifies our corporate values,” says Kevin Dunn, president East US region. “I am confident that his passion and strong supplier relationships will help drive continued growth for Breakthru’s Florida portfolio as well as our talented team.” 

LUXCO LAUNCHES NEW LINE OF RTD COCKTAILS. Luxco has added Vita Frute Vodka Sodas to its ready-to-drink portfolio. The Vita Frute lineup includes Lime Basil, Watermelon, Grapefruit and Pineapple Coconut flavor offerings. The vodka sodas are made with vodka, club soda and natural flavors. They also tick a lot of the ‘better-for-you’ boxes including coming in at 100 calories, gluten-free and 5% abv. 

RUTHERFORD WINE COMPANY NAMES DIRECTOR OF MARKETING. Rutherford Wine Company has appointed Nick Berube as director of marketing. Nick will lead the company’s marketing efforts for its growing portfolio. He has more than 15 years of marketing and PR management under his belt. Most recently, Nick was the director of marketing and DTC for Grgich Hills Estate. “Nick’s dynamic marketing experience is very well suited to guide our marketing and communications initiatives,” says Rutherford gm Morgan Zaninovich. “His expertise in marketing strategy, branding, digital and social media complements Rutherford Wine Company’s growing business perfectly.”

AMBER BEVERAGE GROUP BRINGS KAH TEQUILA MARKETING AND DISTRIBUTION IN-HOUSE. Amber Beverage Group announced it will take on the day to day management of Kah Tequila marketing and distribution in all territories as of April 2020. In addition, the company plans to relaunch the brand in the US market with a new brick-shaped bottle this year as opposed to the skull-shaped bottle, which will continue to be used in other markets, per a release.

Until tomorrow,
Sarah

“With the new day comes new strength and new thoughts.” – Eleanor Roosevelt

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