Are Beer and Spirit Sales Still Soft?

Beer and SpiritsTwo recently released reports indicate that, despite the improving economic climate, beverage alcohol sales on-premise aren’t out of the woods yet.

The overall softening in adult beverage is playing out more in restaurants and bars than at retail, according to recent analysis by Technomic, Inc. Adult beverage volume in the on-premise channel contracted 1.3 percent in 2013, while retail volume declined 0.7 percent, according to the firm’s just-released Special Trends in Adult Beverage Report.

"Consumers pulled back on drink occasions at restaurants and bars," says Technomic vice president David Henkes. "Wine and spirits were essentially flat on-premise, while beer declined. That said, there were categories and segments that did well on-premise, thanks to creative presentations and programs, and on-trend flavors and formats. Restaurant and bar operators have opportunities to position spirits, wine and beer offerings as a point of differentiation and grow sales going forward."

The unusually harsh weather conditions during the first two months of this year resulted in overall foodservice sales declining 3 to 4 percent nationally and 7 to 8 percent in weather-affected markets such as the Northeast and Mid-Atlantic states, according to Technomic. As a result, projections call for drink sales in restaurants and bars to remain challenged in 2014, although Technomic research director Eric Schmidt sees continued growth in whiskey, craft beer and domestic table wine.

"These adult beverage categories, driven by unique and often food-friendly flavor profiles, are really relevant to today's consumer," he observes. "In the hands of the right bartender and promoted properly, these products can deliver on both experience and value. Although overall adult beverage volume will be challenged this year, we expect dollar growth from the ongoing consumer shift to more expensive categories, such as high-end whiskey and craft beer."

In another recent on-premise report, GuestMetrics says that on-premise volume (roughly 23% beer and 22% spirits total U.S. mix) data for the four weeks ended March 23 showed that beer and spirits category/company trends remain weak, although results have improved sequentially; that craft beer and cider continued to take share from premium light beers; and that bourbon was the only major spirits category to exhibit positive volume growth.

Category volume for the top 20 spirit suppliers was weak, the firm says, with a decline of 2.0 percent year over year, although better than the 3.7 percent decline in the prior 12 weeks. Volume declines improved modestly from the prior 12 weeks at all major manufacturers (except Constellation). By category, volume weakness in vodka (-6.9 percent), tequila (-2.2 percent) and rum (-7.0 percent) was offset by strength in bourbon (+14.7 percent).


Suggested Articles

Governor Gavin Newsom issued the order earlier this afternoon.

General Counsel, Jessica Shraybman, shares her advice for clients looking to negotiate terms with their landlords.

More than ever, we need Congress to help our independent restaurants which are proven to be a foundation of the U.S. economy.