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The winners & losers in alcohol during COVID-19

April 30, 2020
By Alana House

A new report from IRI has revealed the winners and losers in alcohol during COVID-19 and what it could mean for the future of the industry.

IRI data shows that consumer buying habits have changed dramatically since COVID-19 shutdown and may be “the new normal in a post COVID-19 world”.

While sales initially sales spiked in Australia for three weeks across all states, they have since dropped to just above pre-spike levels.

However, even during panic buying the week of the 22/03/20 – which saw 20-45% unit growth year on year – the spike was still 30-40% lower than the week leading up to Christmas.

According to IRI, consumers are becoming increasingly conscious of household budgets, with a shift to preferring Australians products, which may also be driven by price. Also, bulk purchase options have seen greater uptake, which could have implications for the future.

Beer saw strongest growth

Beer enjoyed the strongest uplift in sales in Australia, peaking at 60% growth for the week 29/03/2020, coming off the lowest base across categories.

However, beer sales fell back considerably in the week of 12/02/20.

Carlton Zero

There has also been a move to lower calorie and zero alcohol offerings, with Heineken 0.0 and Carlton Zero among the top five beer brands for unit growth in the week of the 5/04/20.

The other biggest winners for growth were Mountain Goat, Great Northern and Asahi.

This trend echoes beer sales in the US, with home-grown budget beer brands that are light in calories seeing the highest growth. For example, AB InBev’s Bud Light sales increased 44% between March 1 and April 17 .

Other brands have also recorded double-digit sales increases, including Miller Lite, Michelob Ultra and Natural Light. They all grew between 14% and 17%. Modelo and Miller High Life sales both jumped around 7%. 

This possibly reflects consumers wanting cheaper products that also suit their altered lifestyles during COVID-19, where many people are at home in lock down.

Gordon's gin clock off

In wine, the top performers in the week to 5.04/20 included 19 Crimes, Lindemans and Brown Brothers; while in spirits the winners were Canadian Club, Vodka Cruiser, Gordon’s Premium Pink, Vodka O and Chivas Regal.

The switch to budget buying

IRI says COVID-19 restrictions are impacting the occasion mix, which will ultimately shift consumption choices moving forward.

“The premiusation trend may erode, with value offerings and bulk pack sizes to be favoured by consumers,” the IRI report notes.

It suggests the potential winners include cask wine, while the potential losers include Champagne and craft beer.

All key liquor categories saw a reduction in dollars spent per litre during the high of panic buying.

Consumers are trading down to cheaper options, there has been a spike in private label, a preference for known brands and a migration to larger pack sizes and larger pack multiples.

Coles revealed during its Q3 results presentation this week that its sales have experienced margin deterioration, as customers moved towards more bulk and value-oriented products.

It has seen a pivot towards cheaper wines under $20 and larger pack sizes of mainstream beer rather than six-packs of craft brands.

Moving forward, CEO Steve Cain said Coles is “very conscious that value will be very high on the public agenda”.

Click here to view IRI’s CPG and Retail Insights to Manage the Impact of COVID-19

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