As the Fourth of July comes and goes, what were Americans filling their glass with? Nielsen
NLSN
While drink trends come and go, the holiday weekend has been particularly indicative of larger shifts in the industry.
Firstly, off-premise is losing the strides gained during 2020 as drinkers head back to bars. Secondly, the RTD category continues to possess impressive strength, with sales soaring. But as hard seltzers and other canned concoctions continue to thrive, beer is taking a hit.
Uncertainty in the Off-Premise
Off-premise sales skyrocketed during 2020 with drinkers stuck at home. As life moves back to normal, off-premise is losing the heat, with off-premise alcohol sales declining over the 2021 July 4th holiday. Sales in the sector declined by 4.8% compared to July 4th, 2019, however, dollar sales in the off-premise were up 11%. This should come as no surprise—bars are back, baby!
Over the next year or so, there will be uncertainty in both on- and off-premise as consumers readjust their drinking habits sans-quarantine.
While sales in the off-premise were down across the board, the spirits category experienced the least decline, down 2.7% compared to last year but up 25% compared to two years ago. Core beer (excluding cider and malt beverages) fell 7%, reflecting the overall shift towards hard seltzers and the production hurdles Covid-19 heaved upon the nation’s brewers. In the core beer category, the premium light and below-premium categories experiencing the greatest losses, down 9.2% and 13.9% from 2019, respectively.
Wine declined by 6.1% compared to the last 4th of July but is still up 10% compared to the 2019 July 4th holiday.
RTD Continues to Thrive
When it came to what people were drinking, canned concoctions dominated. Spirit RTDs let category growth, up 67% compared to the 2020 holiday (+428% vs 2019). Wine cocktails were up 40%, relatively slow compared to the 201% over 2019.
The top 5 spirits RTD brands (ranked by dollars) calculated at NielsenIQ off-premise channels were High Noon, Cutwater, On The Rocks, Monaco, and Crown Royal. These brands account for a whopping 65% of total spirit RTD dollars over the July 4th holiday.
Over at Drizly, one of the most powerful direct-to-consumer alcohol purchasing platforms, White Claw eclipsed beer, beating out every suds brand—including Corona and Coors Light—in terms of sales volume. Speaking strictly to RTDs, High Noon was the number one brand at Drizly as well, followed by Cutwater and On the Rocks.
Hard Seltzers in, Beer’s Out
The hyped-up malt beverage category continues to grow at a rapid clip. Nielsen reported a 9% growth since last year (and up 189% since 2019). Hard tea and hard kombucha also increased in sales compared to year prior, up 7.2% (35% vs 2019) and 17.4% (193% vs 2019), respectively.
Compared to numbers Drizly saw over the same period, hard seltzer accounted for 28% share of the beer category, up from 26% over the period the year prior. In terms of brand performance in the category, not much has shifted since last year—White Claw, Corona, and Bud Light continued to dominate, in that order.
As on-premises pick up again, analysts are questioning whether the category can continue its trajectory. Hard seltzer doesn’t have nearly as much on-premise traction as it does at packaged goods stores and the like. While hard seltzer continued to perform well over the holiday weekend, it’s a relatively tepid showing compared to years prior. Many are beginning to ask—is hard seltzer falling flat?
Spirits & Wine
Outside of ready-to-drink options, only three categories grew over the holiday compared to last year: tequila (up ++6.5% vs 2020 and +76% vs 2019), Scotch (+3% vs 2020 and 25% vs 2019) and Japanese whisky (+7.6% vs 2020 and 61% vs 2019).
Tequila has had a big moment over the pandemic. “The category has seen over +46% growth,” said Patron marketing VP Adrian Parker in an interview last December.
“It’s been a banner year for tequila on multiple fronts,” says Clare Quinlan, brand manager of Camarena Tequila. “Volume growth has outpaced even the robust growth of the spirits category in general, and we anticipate a bigger share of store shelf space and e-commerce business will be dedicated to tequila in the future.” This trend seems to be continuing into the new year—according to Nielsen, tequila is up 1.2 share points from 2020, accounting for 14% of spirits dollars in off-premise.
Outside of these particulars, higher-end spirits continue to thrive—an overarching shift towards premiumization seen in the pandemic (that said, Nielsen notes that growth rates are slowing in that sector compared to last year).
Looking to wine, sales across all segments were down compared to 2020, though they are still up compared to 2019. Segments that continue to grow, even when compared to 2020 sales, include sparkling wine (+1.4% vs 2020 and +29% vs 2019), French champagne (+6.9% vs 2020 and +71% vs 2019), wine-based cocktails (+40% vs 2020 and +201% vs 2019), and non-alcoholic wine (+38% vs 202 and +77% vs 2019). Drizly corroborated the growth of the bubbly category, noting that sparkling wine took one of every four dollars spent on wine over the July 4th period.
Other notable pockets of growth include Mexican imports (+6.3% vs 2020) and non-alcoholic beer (+29% vs 2020 and +70% vs 2019).