Dive Brief:

• Alcoholic beverage sales jumped 55% in the third week of March compared to the same time a year ago, according to Nielsen data sent to sister publication Food Dive. That growth is a faster pace than the previous week, which saw a 28% sales increase from the year before. 
• By category, the year-over-year increases were largest for spirits with sales rising 75%, followed by wine jumping 66% and then beer, flavored malt beverages and cider increasing 42%. Beer sales, specifically, grew 34%.
• Online growth rates for alcohol are growing faster than in-store sales. Online sales were up 243% the week ending March 21, compared to the same period a year ago. Wine continues to dominate online sales, making up 71% of the total beverage alcohol sales online.

Dive Insight:

As more stay-at-home orders are issued in states across the country, consumers seem to be stockpiling and safeguarding what's important to them. One of them appears to be alcohol. The pandemic is already driving big sales growth for pantry staples of shelf-stable and frozen products, and now boozy beverages are getting a boost too.

Consumer demands for beverages have shifted drastically in recent years as traditional drinks are now competing against trendier ones like hard seltzers, craft spirits, cannabis-infused beverages and alcohol-free trends. U.S. wine consumption dropped in 2019 for the first time in 25 years and beer volume has declined for years. If the sales increases continue as the pandemic drags on, this growth could help a variety of struggling alcohol companies.

Within spirits for the third week of March, tequila saw a 90% increase, gin jumped 89% and ready-to-drink cocktails were up 106%. Looking at beer, sales growth for large pack sizes outpaced smaller ones. Nielsen said larger packs of 24 and 30 each grew about 90% and 87%, respectively, for the week compared to a year ago as consumers look to stock up to avoid leaving their houses. Meanwhile, 12 packs were up 61% and 6 packs increased just 16%. As Big Beer has worked to reverse a multi-year slide in market share by tapping into consumer trends with premium products, innovation and finding new occasions for consumers, these sales increases could be a bright spot on earnings. 

Online sales for all alcoholic beverage categories saw a sizable increase. As health agencies and the government urge consumers to stay home as much as possible, online grocery shopping in general has skyrocketed. This could be particularly helpful for alcohol since a recent Rabobank report found alcohol brands and retailers are losing billions in online sales, even though U.S. e-commerce sales of alcohol hit $2.6 billion last year. If the outbreak causes more consumers to shop for beverages online regularly, then sales could continue to rise in that category even after the pandemic ends. 

However, since shoppers are buying in mass now, that could mean that alcohol companies will see a decline later if consumers don't need to restock for a while or if consumers are out of work and need to focus on only purchasing the essentials. It is also unclear whether these increases will have a long-term impact on alcohol sales, but there is a chance that consumers may reacquire a taste for the beverages that they had pushed aside. But consumers will likely also want to revisit bars and restaurants when they reopen, which could hurt retail sales.