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In the run-up of panic from COVID-19 that surged grocery store sales the week of March 8, two things are abundantly clear for those buying beer: people wanted a lot, and brands they could trust.
IRI-tracked sales in grocery, convenience, liquor, and other chain stores for beer-only (excluding flavored malt beverages and non-alcoholic brands) grew 8% in the first two weeks of March compared to last year as every category made volume increases, a rare feat for groupings that include long-declining brands. And in these chain-based results, the boost is coming from a specific set of options:
"Premium Plus" grew by 16% in the first two weeks of March, driven almost entirely by Michelob Ultra.
Imports lost out on an annual St. Patrick's Day bump from Guinness, but an 11.3% category increase came mostly from Constellation Brands' portfolio. Modelo (+20.2%) sold almost 431,000 more case equivalents vs. 2019, while Corona Extra (+14.6%) added 264,500 CEs.
"Value Light" was up 10.5% aided by volume jumps of Busch Light (+20.2%), Keystone Light (+6.2%), and Natural Light (+4.9%).
These kinds of purchases are usually reserved for celebratory holiday weekends, and the run on familiar brands represents at least a momentary turn mentioned earlier this week. If we consider the first two weeks of March as an initial run-up of panic related to COVID-19, what happens in the near future has the potential for similar bounces as cities, counties, and states rapidly consider “shelter-at-home” requirements that would encourage stretches of self-isolation.
At least one anecdote shows alcohol outpacing food in sales for a grocery chain.
No surprise: as people loaded up for however long they imagined they’d be stuck at home, it was large package sizes that drew attention the first two weeks of March.
For starters, Bud Light, Miller Lite, and Coors Light all saw significant gains from 24-pack sizes, with the trio accounting for almost 60% of volume growth in IRI's "Premium Light" category:
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On IRI's “craft” side, there were also large volume gains among 15-packs in the first half of March compared to last year:
Founders All Day IPA, 36%
Founders Centennial IPA, 73.5%
Blue Moon Belgian White Ale, 117.6%
Golden Road Mango Cart, 92%
To drive this point home on how valuable large-format, lower-cost packages have been: Goose Island IPA as a full portfolio declined 6.4% in this time period vs. 2019, but its 15-pack of 12oz cans increased volume in IRI-tracked chain stores by almost 45%.
The common denominator across all these, aside from coming outside the Brewers Association definition of “craft,” is likely their price. This was a “bang for your buck” scenario, and it played out continuously across the country.
One last brand to consider: New Belgium Brewing Company's Voodoo Ranger Imperial IPA, which had six-packs increase IRI-tracked volume 40% in the first half of March, with 12-packs of the 9% ABV Double IPA more than double its volume compared to 2019, selling almost 1,800 barrels of beer in these channels over two weeks. That’s three times the size of what the median BA-defined craft brewery makes in a year.
What this means right now: If you have the ability to shift volume and price, immediate indications from the retail side show now is the time to test those limits. This is already playing out in the U.K., where breweries are trying to remove as much stock as possible, severely discounting brands to move ASAP. If you’re a taproom-focused brewery without the benefit of off-premise sales, but can take advantage of the to-go option many states are granting businesses, it’s worth considering the direct-to-consumer potential of higher-volume packages that have been flying off shelves where everyone is shopping already.
For the past two years, journalists around the world have promoted “Flagship February” as a chance to celebrate (and maybe even boost sales) the core beers of brewery portfolios. In the run to start this month, that ambition came true.
According to IRI sales, a group of about 20 beers accounted for a majority of the volume spike in chain stores with their own increases compared to last year, including:
Samuel Adams Boston Lager, +30.6%
Lagunitas IPA, +20.4%
Shiner Bock, +19.1%
Sierra Nevada Pale Ale, +12%
New Belgium Fat Tire, +11%
Yuengling Traditional Lager, +7.8%
These six brands lost almost 274,000 BBLs combined in IRI-tracked channels 2015-2019, with only Lagunitas IPA essentially staying flat in recent years. Under normal circumstances, shoppers were turning away, but with a need to stock, these recognizable brands suddenly became attractive again.
Also worth noting is the official flagship of hard seltzer: White Claw. That portfolio of brands more than tripled its output during this timeframe compared to last year, selling about 102,000 BBLs of product over just two weeks—roughly what Allagash Brewing produces in a year. Truly sold almost twice as much (~35,000 BBLs) as it did last year, and Bud Light Seltzer (~26,000 BBLs) was #3 in the category in its first March.
What this means right now: Part of this is a matter of what’s most available. Retailers, especially those tracked by IRI, are certain to have the largest beer manufacturers in the country at the ready. But it also indicates the advantage these breweries have as distribution-heavy companies. When people needed beer, they turned to these brands, likely out of a combination of price, availability, and familiarity. (And likely in that order.) That doesn’t mean you can’t play a similar game to your strengths. If you’re a smaller brewery, identify how your flagships can play into current demand, especially if your brands have connection to locality. When people are staying in their neighborhood and community, and are trying to find ways to support local, showing your connection in business and brand is worth it.
These numbers reflect national statistics, but there's reason to believe these trends will hold and evolve in the very near-term, as shown by the three states longest impacted by COVID-19: Washington, California, and New York. During the week of March 8, national sales of beer only (excluding FMBs and non-alcoholic) grew by 3.8% in grocery, convenience, and other chain stores in IRI's MULC channels. Here's how those states compared:
Washington: Despite having dealt with COVID-19 since the end of January, MULC sales still increased 4.3% the week of March 8 compared to 2019, with the biggest gains in imports (+17.9%) and craft (14.6%).
California: The Bay Area was the first in the U.S. to pass a shelter-in-place law, and the run-up to that, along with the fast impact COVID-19 had on the state, may have been part of why IRI MULC sales declined 2.6%. However, craft (+11.9%) and "Premium Plus" (+24.8%) made gains as value brands mostly declined.
New York: With a 14.8% increase in MULC volume sales the week of March 8, the Empire State may showcase what many other states can expect. New York has become the epicenter of COVID-19 in the U.S., with a little more than 15,000 reported cases as of March 24. The large jump in MULC sales compared to last year could feasibly be because residents were doing their stockpiling later than others. This is emphasized by the fact that value brand categories, particularly "Value Light" options like Natural Light and Keystone Light, showed the largest gains. Price, volume, and availability continue to be center to purchase decisions.
If you’re in a state that either hasn’t had a significant COVID-19 outbreak, or state government hasn’t yet instituted a shelter-in-place requirement, now may be the time to evaluate your pricing and availability of brands, as other areas of the country have demonstrated what can happen at different points of social panic and pantry-loading.
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