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Thursday, July 2, 2020

Are Alcohol Sales Spiking?

You may have heard the news that alcohol sales are heading up to new heights during the pandemic. You may have seen a chart showing the spike in wine sales. The thing to realize is that overall alcohol sales are not going up. It's just that sales are moving to different channels; from on-premise to off-premise (drinking out vs. drinking at home).

The latest numbers show off-premise spirits sales up over 30%, wine 25%, and beer over 15%. But these increases don't make up for the on-premise loses.

As to be expected drinking at bars and restaurants is down a whopping 90%. With people doing their drinking at home they're also spending less money as bar prices are significantly higher.

For wine the sales from tasting rooms went to near zero and is slowing creeping back up as they reopen under strict rules. Yes, online wine sales went way up. So did wineries do better? Depends on the winery. Some, mostly very small operations, rely heavily on visitors. The bigger you get the more likely you sell retail. As a winery gets even bigger the more likely they are in local grocery stores and other local shops.

Craft breweries tend to rely on tap room sales and their sales were hit very hard as nobody is buying kegs of beer. Most have switched to selling cans to stay afloat. Many small breweries may not be around in six months if things aren't opened up soon.

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