Posted: Jan 25, 2021
2020 has been a volatile year in the adult beverage market. Trends that have been in motion for years, like online wine and spirits sales, suddenly accelerated in the wake of the COVID-19 induced lockdowns; compressing into a few months changes that were expected to play out over a decade.
The trend toward premiumization also saw a dramatic increase as consumers, deprived of many traditional luxuries, opted to splurge on high-end spirits and wines. Strong categories like Tequila, Bourbon and Irish whiskey saw a marked spurt in demand while new categories like canned wines, ready to drink (RTD) cocktails and malt liquor-based beverages, often referred to as alcopops, saw demand soar and became important new adult beverage categories. Many ultra-premium brands struggled to meet demand.
Traditional distribution channels saw significant disruption. On premise sales were hard hit by the lockdowns of bars and restaurants. Online sales soared as did direct to home deliveries. Low priced, under $10 wines, that relied primarily on grocery and convenient store distribution were seemingly little affected by the lockdowns, whereas high-end wines that traditionally saw a significant portion of their sales flow through high-end, so called white tablecloth, restaurants were much more significantly impacted.
Wineries and distilleries that relied on tasting room sales had mixed results depending on the lockdown rules of the states in which they were based. Those that could operate could rely on higher margin, direct to consumer sales to offset the lower margin distributor sales that they had lost. Those that didn’t have or could not operate tasting rooms and on-premise gift stores saw a significant chunk, typically one-third to one-half of their sales, simply vaporize.
By Joseph V Micallef
Source and complete article by: forbes.com
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