There has never been anything like the current pandemic to compare consumer trends in the alcohol beverage sector to. This is new territory. With the vast majority of the on-premise business now closed across most of the country, purchases have shifted to the off-premise. Early data appears to show that the uptick in off-premise may be making up for the downturn in the on-premise.
According to an article in Forbes, alcoholic beverage sales have spiked, but the impact has been uneven. Some producers have seen their sales soar, while others have seen them decimated. There are winners and losers.
Sales were dominated by larger off-premise retailers in the month of March, and those suppliers who are already in those grocery, convenience and big box store sets are seeing rising sales. But trying to get into those stores for the first time is not happening. The retailers don’t have time to set up new items and don’t want to deal with new vendors, leaving many small suppliers out in the cold.
Those who can ship direct to consumer are also doing well. Drizly allows consumers to obtain delivery of a variety of alcoholic beverages directly from local retailers. Winc, a direct to consumer wine club, saw a 578% increase in new member sign ups during the week ending March 21. Sales during the same period increased by 49.6%.
Breweries who depend on their on-premise tap rooms will struggle the most. Since March 1, the restaurant industry has lost more than three million jobs and $25 billion in sales. Despite the aid offered by the Cares Act, Laurent Grandet, an analyst at investment banker Guggenheim, estimates that 20% of bars and restaurants won’t reopen according to the Forbes article. That number would probably be a good guess on how many “own-premise” breweries don’t reopen on the other end of the crisis.