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It may not come as a surprise to learn, but people are drinking more than usual during the pandemic.
And there’s more to it than just anecdotal evidence. American adults said they drank 14% more than the previous year, according to a study by Rand Corp. published in JAMA Network Open magazine last month.
These results tend to be in line with previous research, including data from market research firm Nielsen that total alcohol sales outside of bars and restaurants have increased by around 24% since mid-March.
The reasons for the continued increase are obvious: an extra glass of wine or cocktail is a common strategy for coping with pandemic stress, anxiety, depression and boredom.
So does this mean that liquor, beer, and wine producers have made profits while the rest of us drowned our worries?
It’s not that easy.
Although consumers are stocking up on alcohol at home, the surge in retail and online sales has not been enough to offset the closings of bars and restaurants, which account for roughly a third of all alcohol-related spending in the US
Just as revealing as the crowd of Americans is what they want to drink.
This year, according to Nielsen sales data, the big winner was distillates, which significantly outperformed other beverage categories in sales – tequila, gin and whiskey (both domestic and imported) saw the biggest increases.
“We’ve seen an increase in really simple, two-to-three-ingredient cocktails, from Negroni to classic martini,” Tom Spaven, brand director of Bacardi’s own gin brand Bombay Sapphire, told CNBC in May, citing the company to increase sales at ” Premium mixers “such as liqueurs, flavored liqueurs and aperitifs.
And with some bartenders feeling less than ambitious at home, selling pre-mixed cocktails – like canned vodka mules and Mai Tais from Cutwater Spirits of San Diego – has also grown in popularity. Total sales have almost doubled since last year.
Still, most drinkers stick to brands they’re already familiar with: between March 14 and April 30, alcohol delivery platform Drizly, which allows retail customers to order home delivery, announced that it had top five best-selling liquors on the platform were Titos, Bulleit, Casamigos, Jameson and Jack Daniels.
Veronica, a sales manager at Ramirez Liquor in Boyle Heights who refused to give her last name on privacy concerns, said the 12,000-square-foot beverage warehouse has been “constantly manned” since the pandemic began, and retail customers were looking for popular tequila brands like Don Julio 1942 and Class Azul.
“The biggest challenge we faced was keeping certain products in stock as the demand for closed bars has changed a lot,” she said. “When we run out, customers might pick up a bottle from a smaller manufacturer, but generally there is demand for the brands we order on the pallet. We sell a ton of Patron, a ton of Jameson, stuff like this.”
On the flip side, Veronica said she’s also noticed customers are more likely to splash on more expensive bottles. “Especially when the stimulus checks came in earlier this year, we saw that some of the more expensive whiskeys and tequilas were doing well,” she said.
In the wine industry, changes in consumer habits have focused more on the packaging than the product itself. Canned wine, in particular, is enjoying explosive popularity. A California-based company, Bev, has seen revenue grow 200% every month since March.
In order not to be outdone, box wine held at college sorority parties has also increased. Total sales increased by 30% compared to the previous year.
Market analysts say the surge in canned and boxed wine is not necessarily evidence that drinkers are looking for lower-shelf options, but rather a sign that more established and respected wineries are expanding in formats as well as bottles, a trend that has gone before was in full swing COVID-19 has arrived.
Danelle Kosmal, vice president of the beverage alcohol practice at Nielsen, said the shift could continue when restaurants reopen this year: “When restaurants start expanding ideas like canned vineyards, it will be interesting to see if so will further normalize the idea of cans and other alternative packaging for wine. “
Beer sales, which rose roughly 16% this year according to Chicago-based research firm IRI, tend to reflect similar trends in terms of quantity and quality. At the beginning of the pandemic, customers grabbed boxes of flagship beers from major breweries: Michelob Ultra, Miller Light, Blue Moon and Modelo Especial. Even Corona, which was the subject of countless memes in early 2020, performed well with a 20% increase over the previous year.
For craft brewers, however, the forecast is mixed. While Veronica of Ramirez Liquor believes craft beer “holds its own” in her business against mass market breweries, large breweries have a distinct advantage in dealing with pandemic market volatility.
Since beer has a much shorter expiration date compared to other beverages, many small brewers postponed production plans in the first few months to convert freshly brewed beer, which was originally planned for kegs, into more stable packaging such as bottles and cans.
At Smog City Brewing in Torrance, that meant the thousands of gallons of beer that would normally supply sports stadiums and theme parks are now for cans. Much of this product consisted of the company’s “core beers” such as Little Bo Pils and Coffee Porter, traditionally the foundation of the brewery’s sales.
And, of course, it wouldn’t be appropriate to talk about drinking during the pandemic without mentioning Hard Seltzer, the unofficial drink of the summer of 2019 that further cemented its popularity in the summer of 2020. According to Nielsen data, the fizzy drink is now $ 2 billion in U.S. industry with sales up a whopping 224% year over year.
Conglomerate brands like White Claw and Truly continue to make up 75% of the market, but that’s changing – Bud Light Seltzer and Corona Seltzer both launched in 2020, and Coca-Cola recently announced the launch of Topo at Chico Hard Selters in the Year 2021.
Given that the pandemic is far from over, it’s not exactly clear how many of these trends indicate a permanent change in the way (and what) Americans do. Online delivery orders that shot over the roof in March have already declined to pre-epidemic levels, as have mass shopping trends where the masses had bulk quantities in stock.
Of course, the looming threat of stricter lockdowns in the fall and winter in conjunction with the holiday season could lead to increased demand in liquor, grocery and convenience stores as shoppers stock up again.
“There’s a visceral response to the word ‘shut down,'” said Brian Rosen, president and founder of BevStrat, an alcohol brand distribution and strategy firm. “And there are more people drinking by the fourth quarter, so you may have a perfect storm of fear, desperation, holidays and celebrations.”
Even after the pandemic is over, some in the hospitality industry are skeptical that the general public will quickly return to their pre-COVID practices.
“One thing we are seeing is reservations are being made earlier in the evening and the tables are not staying as long as they were before,” said Hans Rockenwagner, owner of Dear John’s in Culver City, which has since opened for al fresco dining is June.
In restaurants, fewer seats often mean less drink sales. Once they reopen, the same can be said of bars. Comfortable customers tend to stay longer and order more, but without that convenience, drinking at home could remain the norm for the next year as well as bars and restaurants do their best to provide drinkers with takeaway and pre-packaged cocktails Lure drinks under recently relaxed alcohol laws.
Meanwhile, LA County has cleared wineries and breweries to reopen outdoors in late September, which, along with a $ 10 million county aid package, could potentially make up for some of the losses the industry has suffered this year.
At Ramirez Liquor, Veronica said she expected to sell a large amount of wine during Thanksgiving, but was surprised to see the demand for beer kegs increased, which fell earlier in the year but has recently rebounded as some Angelenos fought over social gatherings felt more complacent.
“It’s hard to know what to expect given how the year has gone. Who really knows?” She said. “We’re trying to build up our inventory slowly, but you get the feeling that people are trying to stock up before the holidays.”
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