If Summer 2019 was the season hard seltzer found its footing, Summer 2020 was the year it blasted off.
Off-premise dollar sales of hard seltzer between the Memorial Day and Labor Day weekends this year reached $1.75 billion — a full $1.1 billion more than the same period last year, according to market research firm Nielsen.
“That’s impressive growth considering how big of a splash hard seltzers made during the ‘Seltzer Summer of 2019,’” Nielsen VP of beverage alcohol practice Danelle Kosmal wrote.
The top five growth hard seltzer brands this summer were Mark Anthony Brands’ White Claw, Boston Beer’s Truly Hard Seltzer, Anheuser-Busch InBev’s Bud Light Seltzer, Constellation Brands’ Corona Hard Seltzer, and Molson Coors Beverage Company’s Vizzy Hard Seltzer.
“Combined, those 5 brands accounted for 95% of total hard seltzer growth in off-premise channels for this summer,” Kosmal wrote.
Of those five, only White Claw and Truly were available last summer. Bud Light Seltzer, Corona Hard Seltzer and Vizzy debuted this spring.
The entire hard seltzer segment contributed 45% of the beer category’s growth dollars this summer. On average, the hard seltzer segment grew dollar sales 154% for the 17 weeks between Memorial Day and Labor Day.
Total beer category sales increased $2.3 billion over last summer, driven by growth in the hard seltzer segment and large beer brands, Kosmal wrote. This represents a 15.9% increase in dollar sales in off-premise retailers compared to the same time last year.
These numbers come with a caveat: Sales in off-premise retailers, such as grocery and convenience stores, are not enough to make up for lost on-premise sales. As the industry’s trade groups have pointed out, overall beer industry sales are projected to decline by $22 billion by the end of 2020. Additionally, 651,000 jobs supported by the industry will be lost.
Still, several beer category segments saw double digit increases in dollar sales during the summer months compared to last year:
- Super premiums (+19%);
- Craft (+13.5%);
- Mexican imports (+10.3%);
- Non-alcoholic beer (+38.4%).
The super premium segment’s gains were largely driven by A-B’s Michelob Ultra, which finished the season up 24% over the same time last year.
In the craft segment, three of the leading brands fall outside the Brewers Association’s craft definition: Molson Coors’ Blue Moon, Lion Little World’s New Belgium, and A-B’s Elysian. The only two independent craft brands to crack the growth top five was Chico, California-based Sierra Nevada and Firestone Walker, which is owned by Duvel Moortgat.
The Mexican import segment endured some ups and downs over the summer, likely driven by out-of-stock issues caused by a production shutdown caused by the pandemic in the spring.
“The segment started the summer off with strong growth rates, but dipped into single digits — and even declined for one week — in July,” Kosmal wrote.
For the week ending September 12, dollar sales of Mexican imports increased 16.9%.
Performance of other segments varied. Premium light beer sales increased 5.9% during Summer 2020 compared to Summer 2019. Below premium beer sales were flattish, declining 0.2%.
Non-seltzer, non-beer segments saw varying levels of growth compared to Summer 2019:
- Cider (+8.1%);
- Hard tea (+33.5%);
- Hard kombucha (+104%).
In the first three months of the pandemic, stockpile shopping led to consumers purchasing larger pack sizes across all beverage alcohol. In the beer category, 12-packs and larger accounted for 75% of off-premise growth, Kosmal wrote.
In wine and spirits, shoppers have returned to purchasing smaller sized products, but beer sales remain tilted toward larger pack sizes. During the summer, large pack sizes have increased their dollar share by 4.5 points compared to last summer. Kosmal noted that 12-packs of hard seltzer are driving much of the share growth, with 24-packs of beer also contributing and outpacing growth of both the total beer category and smaller pack sizes.
“We should expect for this to be a lasting trend throughout the next few months and leading into the winter holidays,” Kosmal wrote.
Core Beer Sales Increase 13.6% to Close Out Labor Day Weekend
For the week ending September 12, beer category sales in off-premise retailers increased 19.9% and crossed the billion-dollar mark, to $1.006 billion. This marks an acceleration of off-premise sales for the category, which increased 12.2% for the week ending September 5.
Labor Day 2020 fell on September 7, the last day it can be in a calendar year, so holiday weekend beer sales were captured in the week ending September 12, which was not a holiday week in 2019.
Core beer — meaning the beer category minus hard seltzers, ciders or FMBs — saw one of its best weeks since June. Sales of traditional beer were up 13.6% during the week ending September 12, compared to the same week last year.
“Core beer growth was led by super premium (+29.3%) and craft (+22.5%),” Kosmal wrote. “In craft beer, 20 big craft brands accounted for 43% of the segment’s off-premise growth for the latest week, but a lot of growth came from the long tail too.”
Total alcohol sales were up 22.6% for the week ending September 12, with spirits outpacing the entire category at a growth rate of 30.1%. Wine also slightly outpaced total alcohol, increasing 22.9% over the same week last year. Beer sales’ growth fell below total alcohol’s growth rate of 19.9%.
For the COVID-19 period, which Nielsen defines as the week ending March 7 to present, sales of total alcohol are up 22.7%. Beer dollar sales are up 18.4%; wine dollar sales are up 24.7%. Spirits dollar sales lead both with a growth rate of 32.8%. Alcohol outpaces other fast-moving consumer goods’ growth rate of 14.4% for the COVID-19 period.
From the COVID-19 period to the present, beer volume has increased 14.8% compared to the same time last year. In May, Nielsen estimated that volume increase of 22% in off-premise sales were needed to offset the loss of on-premise business for each beer, wine and spirits. Wine volume sales have increased 19.3% COVID-to-date. Only spirits have crossed that threshold with a 28.1% increase in volume sales.