NIQ: Weekly Alc Sales Pull Back -- Again; But It Won't Last Forever

NIQ is reporting that during the four weeks ending June 6, Total Alcohol remained below year-ago levels. Dollar sales reached $8.7 billion, declining 4.4% vs the year-earlier level, while case volume totaled 170.8 million, down 5.9% vs a year earlier.

On a weekly basis, dollar sales decreased from $2.2B in the prior period (w/e May 30th) to $2.1B, representing a -2.8% WoW decline. The weekly pullback underscores a continued pressured environment, as the industry looks to maximize upcoming summer occasions, including global events such as the FIFA World Cup.

None of this can be considered good news. But, just as no tree grow to the sky, nothing falls to the center of the earth either. We think this slump the industry has been going through will last about another 18 months to two years.

Meanwhile, the playbook is pretty clear. Focus on three things: (1) pau down debt; (2) grow sales, and (3) seek to improve your operational efficiency.

Prepared Cocktails Still Only Category to Post Growth

Sales of prepared cocktails grew 0.7% in the last four weeks, NIQ said. But the dollar growth was achieved at the expense of volume, which declined 4.9%, NIQ noted "the improvement from recent periods signals strenghtenng momentum as the category enters a key seasonal window for RTDs.

Spirits continued to lead declines, with losses accelerating versus the prior period, as dollar sales fell 6.1% and volume declined 5.5%. Beer followed, with dollar sales down 4.8% and volume decreasing 6.0%. Performance continued to improve relative to the prior four-week period, ended May 30, (-5.2% and -6.5%). • Wine also saw pressure, with dollar sales declining -4.8% and volume declining -6.6%. These declines remain generally stable compared to prior periods. •

"Overall, Total Alcohol trends continue to reflect an uneven and pressured landscape across categories. Prepared Cocktails remain the sole growth driver, Spirits maintain the steepest declines, while Beer shows sequential improvement and begins to narrow the gap with Wine, which has recently outperformed traditional categories," NIQ said.

Regional Results

Regional results continue to align with overall U.S. softness. Michigan stood out as the only dollar growth market, with dollar sales up 0.3% and volume down 1.3%. Ohio followed, down 0.4% in dollars and -2.7% in volume. California once again posted the steepest declines, with sales falling 8.1% and volume down 9.4%.

Volume trends told a different story across key states. New Jersey led with volume growth of +2.2% and dollars down -1.2%. In contrast, Washington declined -9.6% in volume and -5.5% in dollars.

Compared with the prior latest four-week period (w/e May 30th), Liquor showed the most improvement, strengthening from prior dollar (-5.4%) and volume declines (-7%).

Spirits sales slow, as category softness persists

In the four weeks ending June 6th, Spirits remained in decline, with dollar sales down 6.1% and volume falling 5.5%. On a weekly basis, performance softened, with dollar sales decreasing to $529.4M from $538.0M the prior week, a 1.6% week-over-week decline. The modest pullback reflects continued demand softness, with broader category pressures persisting. Whiskey leads declines as Non-Alc remains the growth pocket

Across top categories, (Vodka, Whiskey, and Tequila) all remained in negative territory. Whiskey posted the steepest declines, with dollar sales down 6.5% and volume falling 6.7%. Tequila followed, down 5.8% in value and 2.8% in volume. Vodka saw slightly smaller declines (-5.5% in value, -5.2% in volume). Non-Alc Spirits remained a key growth driver, up 23.8% in dollar sales and 27.0% in volume. All other segments continued to weigh on results, down -6.6% in dollar sales and -6.4% in volume.

Related Reading

After writing the above, I came across an excellent analysis in Beverage Daily: "The changing fortunes of alcohol in a K-shaped economy." I strongly recommend it.