Data conversations around beer in 2023 have set off many alarm bells around the category’s health and place in a changing and blurring bev-alc world. But there may be a slight turning of the tide – or rather, more context that’ll ease industry members’ nerves – according to Bump Williams in his monthly update for Bump Williams Consulting (BWC).
“Lately – at least the last 2-3 weeks – it seems like a lot of the conversations I’ve had with retailers, distributors, Wall Street houses, PE [private equity] firms and even consumers surrounding total bev-alc and in particular, beer, tend to be more optimistic than pessimistic,” Williams said.
Williams cited several concerns brought against beer in 2023, including “slipping trends, lack of understanding consumers ‘hot buttons,’ ‘wishful thinking’ and lackluster advertising, losing touch with the real beer drinker and lost sales/consumers/occasions to spirits or other recreations.”
“Long-term connections to consumers and ongoing declines in key segments, manufacturers and brands are still very much a threat to underlying health, and I don’t want to gloss over those realities,” Williams continued. “But the message of this month’s newsletter is that there are still several areas where beer has found a way to stay competitive against external threats.”
What gives Williams some of this optimism is beer’s dollar sales share trends. Beer’s share of bev-alc dollar sales has increased from 54% in 2022 to 55.7% year-to-date (YTD), ending November 4, in NIQ-tracked off-premise channels. Meanwhile, spirits’ share has declined from 23.8%, to 23.4%, and wine’s share has declined from 22.2% to 20.9%.
In the last 26 weeks, beer’s share of dollar sales increased to 56.8%. Spirits accounted for 23.3% of total bev-alc dollars in the period, while wine accounted for 19.9%. Those share gains come as total bev-alc dollar sales have increased +1.4% YTD, significantly above the +0.3% increase recorded in 2022.
“Those shares might shift a little bit more in favor of wine and spirits by the close of the year, but unless something catastrophic happens, beer will likely end up with a higher share of dollar sales in 2023 than it did in 2022,” Williams said.
Volume is a slightly different story. Beer is on track to have a similar share level of total bev-alc as it did in 2022 (about 85%), while spirits has gained share and wine has lost share. Total bev-alc volume in NIQ-tracked off-premise channels is down -2.8% YTD, versus -3.8% in 2022.
“So while beer may be maintaining its share, it is doing so in a contracting landscape – and this is bad news for everyone,” Williams said.
Beer has been able to record dollar sales growth thanks in part to mix shifts and price increases, “but eventually this treading of water when it comes to volume will need to be addressed,” Williams continued.
Price sensitivity is also “at an all time high,” Williams warned, noting that retailers are signaling that they will look at private label wine and spirits to draw in consumers facing a cost squeeze.
Segments that still have room to increase price include bourbon, tequila, imports, flavors, wine-based cocktails (like BeatBox), non-alcoholic wines and sweet wine, Williams said.
Top Share Gainers
Constellation Brands is the No. 1 share gainer for beer dollar sales YTD, increasing share +1.5 points, followed closely behind by Molson Coors Beverage Company (+1.4 share points).
Monster Brewing ranked No. 3, thanks to its flavored malt beverage (FMB) The Beast Unleashed, which launched this year and now has 0.2% share of total beer dollars YTD. Monster’s scan data does not include any of the CANarchy brands or the Bang-branded bev-alc products the company was making before Monster acquired it (categorized under “Monster Energy Company”), Williams noted.
The top 10 was rounded out by:
- D. G. Yuengling & Son (+0.19 share points);
- New Belgium Brewing (+0.14 share points);
- Sazerac (+0.11 share points);
- Mark Anthony Brands (+0.10 share points);
- Athletic Brewing (+0.07 share points);
- Ferolito, Vultaggio & Sons (+0.06 share points);
- And Blue Ribbon Holdings (+0.06 share points).
On the other end of the spectrum, Anheuser-Busch InBev (A-B) recorded the largest share decline (-3.49 share points) – more than three points above any other declines recorded by the top 10 share losers, with No. 2 being Boston Beer Company (-0.13 share points).
One of the biggest questions on retailers’ minds – and causing spring reset cautiousness – is what beer trends will look like in April, Williams said. April 1 marks when beer starts to lap the declines of A-B’s Bud Light, driven by conservative-led boycotts following its influencer partnership with a trans woman.
“I do know that there has been a shift in power brokers across the beer industry in 2023, whether or not everyone cares to admit it or not, things are going to change going forward if the right leaders step up to the plate and go up there looking for hits and not bases on balls,” Williams said.
“Leadership is a big question that is discussed at every retailer board meeting, advisory meeting and business review that we are asked to attend – someone needs to step up in a big way,” he continued.
E. & J. Gallo was the top share gainer for spirits brands, gaining +0.86 points of spirits dollar sales share YTD, twice the amount of share gained by the No. 2 gainer, A-B (+0.43 share points). Mark Anthony Brands (+0.18 share points), Monaco-maker Atomic Brands (+0.14 share points) and Sunny D Vodka Soda-maker Brynwood Partners (+0.14 share points) rounded out the top five, followed by:
- Boston Beer (+0.13 share points);
- Campari Group (+0.13 share points);
- The Long Drink Company (+0.13 share points);
- BuzzBallz (+0.11 share points);
- And Sazerac (+0.11 share points).
Diageo took the largest hit (-0.81 share points YTD), followed by Pernod Ricard -0.39 share points) and Bacardi (-0.37 share points).
“Beer grabbing share in spirits and spirits grabbing share in beer … it’s starting to be very clear how consumers might start to question what exactly the base alcohol of their drink even is anymore,” Williams noted.
Flavor is the name of the game for top new brands in 2023, as only four of the top 25 new brands across beer and spirits “do not feature some sort of flavor or flavor-centric liquid,” Williams said. Those brands include:
- No. 8 Heineken Silver;
- No. 15 Corona Non-Alcoholic;
- No. 21 Don Julio Rosado Reposado Tequila;
- And No. 25 Sierra Nevada’s Hazy Little Thing rotator.
- & J. Gallo’s tequila-based High Noon Sun Sips was the No. 1 new brand by dollar sales YTD.
Six other spirits-based brands made the top 25 list:
- Sunny D Vodka Seltzer;
- Mark Anthony’s White Claw;
- Buchanan’s Pineapple Scotch Whiskey;
- Jack Daniel’s & Coca-Cola;
- Don Julio Rosado Reposado Tequila;
- And Jack Daniel’s Coke Zero RTD.
The Beast Unleashed was the No. 1 new beer brand and the No. 2 new beer/spirits brand, followed by Simply Spiked Peach, Busch Light Peach, New Belgium Voodoo Ranger Fruit Force and Modelo Chelada Sandia Picante.