US wine lovers premiumise during pandemic

The average price American wine lovers spend on a bottle of wine has gone up during COVID-19 according to Nielsen.

Danny Brager, senior vice president of Nielsen's Beverage Alcohol Practice in the United States, told Forbes: "The general premiumisation trend that we’ve seen for a few years now has continued to this point.

"For the week ending April 4, 2020, average retail selling prices for wine were up 2% versus the previous year, while the $11 to $25 price tier growth rates—within the bottle segment—were higher than the $8 to $11 range, which in turn was higher than sub-$8.

"And the direct-to-consumer shipment channel, which features much higher average retail price points, boomed during the month of March. That said, time will tell if the period of premiumisation that we've been accustomed to over the last few years will last, as we continue to monitor the economic fall-out of COVID 19."

Brager (above, left) was guest speaker at a Drinks Association Network Breakfast last year, discussing what Australia could learn from US trends.

Wine Australia Chief Executive Officer Andreas Clark said there are positive signs for Australian winemakers as US wine lovers favour pricier drops.

In the year ended March 31, 2020, the average value of Australian exports to the US increased by 11% to $3.06 per litre FOB, the highest average value since the year ending August 2009.

"There are reports that Australian wine is keeping its share amidst this growth in both the off-trade and online," he added.

But Clarke also sounded a note of caution.

"We will have to see how things go when stockpiling calms down," he said.

"The UK and Australia went through similar surges and then calmed down. It remains to be seen if wine sales through off-licence and online balance out the decline in on-premise sales."

Massive channel shifting continues

Nielsen reported that alcohol sales were up 25% in off-premise channels in the US during the week ending April 4.

The spirits and wine categories continued to lead with the strongest growth rates, up 33% and 32% respectively in the week ending April 4, compared to the year prior. 

Online sales of alcoholic beverages continued to climb with increases of 246% through March 21; 291% through March 28, and 441% through April 4. By comparison, e-commerce sales across all departments tracked by Nielsen were up 41% in the most recent week.

“No one has ever seen the kind of channel shifting we’re seeing now," Brager said. "It’s totally unprecedented.”