Alc headwinds carry into early October but Week-over-Week modestly better

During the four weeks ending Oct. 3, Total Alcohol remained in the shadow of a year earlier. Dollar sales fell 1.1% to $8.2 billion, while case volume fell 3% to 160.4 million, NIQ reports.

On a weekly basis, dollar sales inched up 0.3% to $2 billion from the prior week ending Sept. 26. Although weekly sales increased, the industry continues to manage an environment of pressured demand, with drinking occasions narrowing as we move further into Fall and cooler weather.

Prepared Cocktails Extend Lead, Spirits Continue Advance

Prepared Cocktails Beer, Wine, and Spirits (BWS) once again delivered in their role of being the category bright spot, with dollar sales rising 4.1%, and case volume holding flat. The segment’s recent growth streak is powered by Spirits- and Wine-based RTDs and shows little signs of stopping, as consumers embrace their variety and flexibility.

• Beer results were the most challenged, with dollar sales declining 2.3% and volume falling 3.6%. As the category enters deeper into Fall, the demand associated with key sports occasions like football has yet to help outperform year earlier trends.

Beer’s top segments weighed on performance once again. Domestic Premium delivered the fastest declines, with dollar sales down 6.6% and volume falling 7.1%, while Craft slipped 4% in value and 5.3% in volume. Import trends were mostly flat (-0.6% in value, -1.8% in volume). Domestic Super Premium held onto growth, with dollar sales rising 2.9% and volume 3.1%.

Other positive contributors included Cider and Non-Alcoholic Beer. Cider increased 7.1% in value and 5.8% in cases, while Non-Alcoholic Beer accelerated 9.7% in value and 9.3% in volume. Success shown by Non-Alcoholic Beer is backed by ongoing health trends and its position as a better-for-you alternative.

• Wine recorded similar losses, with dollar sales slipping 2.1% and volume dropping 4.1%. Consumption lapses continue to limit Wine’s rebound potential, despite the segment entering a favorable seasonal period.

Sparkling Wine built on its prior growth, seeing dollar gains of 3.3% and volume growth of 2.3%. Non-Alcoholic Wine also maintained growth, with dollar sales increasing 19.1% and volume up 16.7%. The overarching category theme remains the same as Wine’s smaller growth pockets are overshadowed by the pronounced weakness seen in Still Wine.

Spirits experienced less weakness, with dollar sales down -1.2% and volume dipping -1.4%. Core drivers behind the decline continue to be centered around reduced consumer interest and macroeconomic factors (88%). From a weekly perspective, Spirits sales totaled $506.5 million, a marginal boost of 0.7% compared to the previous week. The category continues to navigate a smaller rate of decline compared to the broader industry, although maintaining demand may prove difficult in the upcoming weeks until the next holiday.

Across the top Spirits categories, (Vodka, Whiskey, and Tequila), uneven trends continued. Whiskey drove category declines, as dollar sales fell 3.9% and volume slipped 4.7%. Vodka gave up the positive ground seen in the prior period, falling 0.6% in value and 1.4% in volume. Tequila held onto its recent wins, capturing both dollar and volume gains (+2.9% and +7% respectively). Non-Alcoholic Spirits growth extended, with dollar sales rising 23.7% and volume up 20.1%. All other Spirits segments just barely sat in negative territory, with dollar sales down -0.9% and volume declining -1.7%.

Overall performance offers us various takeaways, as each category sits positioned in its own trajectory. The outlook of Beer and Wine shows to be relatively unexciting, as the two categories weigh the most on industry results. Spirits is a category of increasing interest, as it tiptoes toward stable trends even after exiting a peak summer selling period. Finally, Prepared Cocktails (BWS) provide the industry with a reliable source of optimism, as category growth persists in the face of increasing product saturation and broader macroeconomic struggles.

Regional leadership moves in favor of Ohio, Calif.

Regional trends were a reflection of industry softness seen nationwide, with eight of the top ten state markets recording declines in both dollar sales and volume.

• Ohio broke through as the top bright spot, leading value growth. Dollar sales increased 0.4%, while volume slipped 2.4%. California hovered around the growth conversation, with dollar sales growing slightly at +0.1%, while volume declined -0.7%. Both markets usurped New Jersey, which barely slipped into negative territory (-0.1% in value, +1.8% in volume) after several recent weeks as the best performer.

• Washington held as the core lagger among key state markets, with dollars falling 5.7% and case volume plunging 11.3%. Demand struggles in the market have yet to let up, now leading key state losses for over a month.

State by state performance paints a murky picture of the industry, where bright spots are shifting and heavily outweighed by many declining markets. Ohio and California emerged as relatively strong states, while New Jersey back tracked into negative territory. Meanwhile, persistent losses in markets such as Washington where declines outpace the category, serves as a reminder of the steep uphill battle that alcohol faces.

Channel recovery stalls

Channel results mostly mirrored total US weakness, with just one major retail outlet achieving sales growth. Convenience led declines at 2.4%, followed by Club -1.9%, Liquor -0.9%, and Food -0.7%. Meanwhile, Mass grew +1.0%, and All Others +3.0% also captured gains.

Volume trends offered a fairly similar story. Convenience (-5.4%) led volume losses, followed by Liquor (-2.5%), Food (-1.5%), and Mass (-1.1%).In contrast, All Others (+4.2%) was the sole volume grower.