Beer industry depletions (sales-to-retailers) volumes tracked by beverage alcohol invoicing and logistics firm Fintech have increased 9% year-to-date through Week 27 compared to the same period last year, National Beer Wholesalers Association chief economist Lester Jones and Fintech director of distributors Jim Kallies shared yesterday during a quarterly review of the industry’s performance.
The increase year-over-year indicates the comeback of the on-premise channel, given the tough year-ago comps during the pandemic and consumer purchasing shift to off-premise retailers that have led to negative off-premise scan trends in 2021. Market research firm NielsenIQ reported this week that off-premise dollar sales of beer category offerings are down 1.7%.
Jones and Kallies offered a clearer picture so far this year. Below are seven takeaways from the presentation.
Sales-to-Retailers Outpacing 2020 for Beer-Buying Occasions
Depletions volumes in 2021 have exceeded 2020’s numbers on most of the major beer-buying occasions, including the Super Bowl, Easter, Cinco de Mayo, Memorial Day weekend and Independence Day. STRs were stronger following Memorial Day this year than last year, which Jones and Kallies said bodes well for the July 4 restock that has yet to appear in Fintech’s data.
“You look at the comps moving forward for the rest of the year, they’re fairly soft,” Kallies said. “If the restocking from the Fourth of July and the volume moves through the Fourth that was out there, I think you’re going to see a strong beer industry.”
However, two anomalies have caused major disruptions in the calendar for the industry: the March 2020 pandemic-driven pantry stock-up period and the late February 2021 winter storm that plunged much of the South into a deep freeze. Without those two exceptions, 2021 STRs appear to be following a pattern similar to those in both 2020 and 2019 for the second half of the year.
Draft Volume Tops 2019; Long Tail Gains Share
In late May as pandemic restrictions were lifted in many states, draft volume edged slightly ahead of 2019.
“That was a pivotal point for our industry, because we got back to the same amount of draft,” Jones said.
In the on-premise channel, package share has held mostly steady, with draft accounting for 51% (+1% from last year), cans accounting for 20% (+1% from last year) and bottles accounting for 27% (-4% from last year). Bottles’ decline is “obviously fueled by some of the seltzer replacements that we’re seeing in the on-premise.”
The trope that people turned to familiar brands held up in the on-premise in the beginning of the year, but at Week 21 in mid-May, that began to change. Through Week 20, the top nine draft brands (Bud Light, Michelob Ultra, Miller Lite, Coors Light, Blue Moon, Modelo Especial, Yuengling Lager, Dos Equis and Stella Artois) accounted for 60% of draft STRs. During Weeks 21-27, all other brands’ share increased 16%, to 56%.
“Well, all of a sudden, Week 21 comes along and that long tail of the beer industry suddenly gets turned on and we go from all others being 40% to 56%, and all those other top beer brands lost a little bit to give it up to that long tail,” Jones said. “That was such an incredible shift in the beer market at that pivotal point and that holiday as people came out and started enjoying the summer.”
Michelob Ultra and Imports Gain Draft Share
Seven of the top 19 draft brands have surpassed the market share they held in 2019, before the pandemic drastically changed the on-premise landscape:
- Michelob Ultra, +2.9%, to 9.7%;
- Modelo Especial, +0.8%, to 3.5%;
- Dos Equis Especial, +0.2%, to 2.9%
- Dos Equis Ambar, +0.2%, to 1%;
- Guinness, +0.1%, to 1%;
- Pacifico, +0.1%, to 0.6%;
- Busch, +0.3%, to 0.6%, all year-to-date through Week 27.
In recent years, Michelob Ultra’s share has steadily increased by 5.2%, from 4.5% in 2017. Bud Light had the biggest share loss, declining from 19.1% in 2017, to 14.9% year-to-date in 2021; however, it is still the share leader on tap.
Other share donors include Stella Artois, down from 4.1% in 2017 to 2.4% in 2021; and Samuel Adams Seasonal, down from 2.2% in 2017 to 0.7% in 2021.
“There’s some stability in here,” Jones said. “But there’s also a lot of opportunity for brands to step up, develop themselves in the on-premise, go out and grab market share in an effective way.”
Hard Seltzer Case Volume Increases but at Slower Rate
Fintech logged a little more than 2.5 million cases of hard seltzer being sold to retailers in Week 26 ahead of July 4, about 500,000 more cases than the same week last year, and about 1.5 million more cases than the same week in 2019.
“All in all, pretty healthy and pretty much on track with where I thought we should be probably this time of year,” Jones said of the hard seltzer segment’s STR trends.
Thus far in 2021, hard seltzer depletions have mostly increased over 2020, excluding Week 12 (March 2020 stock-up period) and Week 21 (Memorial Day weekend in 2020 but not 2021).
White Claw Loses Share; Truly Gains Share
Mark Anthony Brands’ White Claw, the hard seltzer segment leader, accounts for 38.1% of the segment, down from 45.4% last year. About half of that 7.3% loss has gone to its next closest competitor, Boston Beer’s Truly Hard Seltzer, which holds 29.8% of the segment year-to-date through Week 27.
In a distant third place is Bud Light Seltzer, which accounts for 9.1% of the segment, down 1% from last year.
The top three hard seltzer brands’ combined share declined 9%, to 77% year-to-date. After White Claw, Truly and Bud Light Seltzer, four brands compete for fourth place:
- Michelob Ultra Organic Seltzer, 3.4%;
- Vizzy Hard Seltzer, 3.3%;
- Corona Hard Seltzer, 3.3%;
- Smirnoff Spiked Sparkling Seltzer, 3.1%.
“This is a fourth place spot that is neck and neck,” Jones said. “We’re talking the tips of the horses’ noses here, guys. We don’t know who’s going to end the year in that fourth place spot.”
The remaining 12 hard seltzer brands each hold relatively small share:
- Topo Chico Hard Seltzer, 1.4%
- Press Premium Alcohol Seltzer, 0.8%;
- Mike’s Hard Seltzer Lemonade, 0.8%;
- High Noon Sun Sips, 0.7% (which has a vodka base);
- Coors Seltzer, 0.7% (which was discontinued last week);
- Cacti, 0.5%;
- Natural Light Hard Seltzer, 0.4%;
- Two Lane Hard Seltzer, 0.4%;
- Wild Basin, 0.4%;
- Nauti Seltzer, 0.4%;
- Omission, 0.3%;
- Karbach Ranch Water, 0.2%.
All other brands — which includes A-B’s Bon & Viv, formerly Spiked Seltzer and a segment pioneer — have declined considerably in share. In 2018, the long tail of hard seltzer accounted for 13% of the segment, but accounts for just 3% in 2021.
“The new entrants into the markets aren’t really grabbing a lot of share,” Jones said. “The core volume is really sliding over to these top 10 brands, which I think is going to be super fun to watch.”
Hard Seltzer Increases Share On-Premise
Hard seltzer accounts for 3.3% of on-premise volume year-to-date, up from 2.9% last year. Still, its on-premise share is less than half of its total industry share (8.2% year-to-date).
“It’s certainly not a huge number, but it’s growing,” Jones said. “A lot of guys I’ve talked to are working the on-premise channels, trying to figure out how to make this segment work for their on-premise retail customers.”
Among the brands with on-premise share greater than the overall segment’s 3.3% are White Claw, Bud Light Seltzer, Coors Seltzer, Cacti, High Noon, Karbach, Mighty Swell, Atwater, and Bon & Viv.
Variety packs account for 78% of hard seltzer’s off-premise sales, but just 30% of its on-premise sales. On-premise, single flavor packs make up 70% of sales, and the most popular flavor is black cherry, followed by mango.
Jones and Kallies predicted spirits-based RTD canned cocktails will continue their offensive on hard seltzer, particularly in the fourth quarter. However, Kallies added that hard seltzer’s fledgling position in the on-premise may be spared.
“Is a company like Bacardi going to want to place ready-to-drink Bacardi and Coke canned cocktails in the on-premise?” he asked. “My bet is no. I think they don’t want to take away from their existing brands, so I do think there’s a tremendous opportunity for seltzers in the on-premise moving forward.”
Editor’s note: this story has been updated to obviate that beer industry volumes tracked by Fintech have increased 9%.