The summer selling season is officially upon us, and the period from Memorial Day through Labor Day is shaping up to be “a long, tough summer” for beer sales, according to the latest analysis from Bump Williams Consulting.
In fact, the firm wrote that it doesn’t expect “much good news in terms of getting back to positive this year.” Still, Williams left the door cracked, albeit with a fleeting chance for a turnaround.
Historically, the Memorial Day to Labor Day period for the beer category has meant expanding weekly dollar rings above the January through May averages and hopes of seasonal spikes above prior years that grow the overall category, the firm wrote. While the first half of the equation will likely hold true, the second may “be a bit tougher” given the year-ago comps in off-premise retailers.
The latest off-premise scan data from NielsenIQ, year-to-date through May 22, showed nearly flat dollar sales, at +0.4%. However, over the last four weeks, sales are down -11.8%, as the industry cycles inflated sales from the consumer shift away from shutdown on-premise retailers to off-premise outlets, which now face increased competition from the reopening of bars and restaurants across the country.
Beer category growth was initially boosted by January (+14%) and February (+12%) sales, but those have been whittled away in March (-1.8%) and April (-2.7%), the firm reported.
“[W]hile the cumulative dollar sales over each of the four-week periods have steadily climbed throughout 2021, the absolute year-over-year sales losses over the same time periods have accelerated, with total beer dropping roughly half a billion dollars versus year ago levels in the four weeks ending May 22, 2021,” Bump Williams shared.
Year-to-date through May 22, five segments — imports (+5%), domestic super premiums (+2.5%), FMBs (+3.5%), and hard seltzers (31.7%) — have recorded dollar sales growth. However, over the last month, off-premise dollar sales for just one segment are in the black: hard seltzers (+3.5%). Every other segment is in the red, with single-digit declines for imports (-6.7%) and double-digit declines for craft (-17.1%), domestic super premium (-10.6%), FMBs excluding hard seltzers (-11.8%), premium regular (-15.3%), premium light (-16.2%), cider (-21%), below premium (-16.1%) and malt liquor (-18.4%).
Williams noted that sales declines for super premium and FMBs aren’t surprising given those segments “have been basically treading water in the quad weeks leading up to the most recent snapshot.” As for craft, the trends have declined steadily and accelerated over the last 12-week period.
Hard seltzers were “the lone survivor” for maintaining positive trends over each four-week period, Williams wrote. However, the segment isn’t impervious to the tough comps; in the latest one-week period, hard seltzer sales declined -1.7% compared to the same week last year.
Williams also examined NielsenIQ’s top 10 growth brands (excluding new offerings) versus loss leaders, comparing year-to-date sales changes with the gains and losses over the latest four-week period. The firm found that more than half of the year-to-date losses among top-selling premium brands occurred in the most recent four-week period, ”while all the others have seen at least one-third of their year-to-date declines come from the most recent four weeks.”
For example, 61.4% of Bud Light’s year-to-date off-premise dollar sales declines occurred in the latest four-week period. For White Claw’s first variety pack, 39.8% of its declines came within the last four weeks. And on down the line over the last four weeks, with Budweiser (53.8% of its declines in the last 4 weeks), Miller Lite (75.4%), Coors Light (88%), Natural Light (38.4%), Bud Light Seltzer variety pack (44.8%), Keystone Light (33.7%), Busch (38.1%), and Miller High Life (35.3%).
Even growth leaders, such as Modelo Especial, Michelob Ultra, Corona Extra and White Claw’s second variety pack have recorded losses over the latest four-week period, which “wiped out a sizable share of their overall year-to-date gains.”
On the other side Boston Beer’s Truly Lemonade mixed pack and Twisted Tea, Molson Coors’ Vizzy Hard Seltzer variety pack, Modelo Chelada, and New Belgium Voodoo Ranger Imperial IPA continued to generate incremental growth over the last month.
Even with the latest trends painting “a less than optimistic picture for an abrupt about face,” Williams left open the potential for “incremental sales” growth. Williams said that could come through suppliers and retailers attracting more and new shoppers through innovation, hard seltzers, beyond beer and non-alcoholic beverages; consumers buying more per occasion such as add-on purchases and larger packs; and consumers making more frequent purchases.
“These avenues for growth have always been particularly accessible during the upcoming months for beer as long as it can continue to fend off encroachment from other BevAl threats out there, particularly those in the form of RTD spirits/wine that have caught fire recently and have the potential to siphon away occasions from beer,” the firm wrote. “Time will tell if beer can still own the summer or if we should start to get more comfortable with all of the red.”