Alcohol Sales, Especially Online, Shoot Up During Stay-At-Home Orders; Will it Last?
While the rest of us were watching the curve of COVID-19 cases, Sandy Mechammil was also watching a rise in sales at his Santa Monica Liquor store and waiting to find out if that curve would flatten, peak or fall.
Mechammil said his best days were right before Easter. Customers lined up at the Wilshire Boulevard store to buy four or five bottles – or even some cases – with wine selling best. He said the store stayed busy the week after the holiday. He estimated sales are up 30%.
"There's no bars, no restaurants, no beach. (Customers) are home. They have to drink," Mechammil said.
Across the nation, alcoholic beverage sales were up even before the buildup to Passover – when wine plays a significant role in seders -- and Easter celebrations.
The Nielsen research company found alcoholic beverage sales for the week ending March 21, right after the initial stay-at-home orders went into effect, rose 55% as Americans stocked up. The company reported wine sales increasing 66%, beer 42% and spirits 75%.
Alcohol sales leveled off a bit after that, but Nielsen reported that they were still up 25.5% from the beginning of March through the week ended April 4, compared to the same period a year ago. Specifically, beer was up 13%, wine 31% and spirits 33%.
Greg Doonan, a Nielsen spokesman, said the flattening resulted from a reduction in the "pantry loading" that occurred when consumers swarmed stores and filled their shopping carts at the beginning of stay-at-home orders. Online buying also surged.
IWSR Drinks Market Analysis in London, which tracks short- and long-term trends in sales and consumption of wine, spirits, beer, cider, and mixed drinks around the world, said consumers particularly ran out to buy box and table wine, flavored malt beverages, non-alcoholic mixers and premixed cocktails. The company’s analysis suggested that homebound consumers who began enjoying happy hours online with friends on Zoom and other websites and apps likely were trying to recreate the cocktail experience they formerly enjoyed in bars.
IWSR’s research also showed: Spirits in larger bottles and wine in boxes outpaced smaller containers at the time; Budweiser products reversed a 52-week volume decline; and other alcohol name brands including Wild Turkey, Crown Royal and Jack Daniel’s also did well at retail stores. Even Corona beer, which took a hit on social media because the coronavirus causes COVID-19, saw a nearly 29% increase in sales.
"During uncertain times, comfort purchasing tends to drive the consumption of standard or premium brands that people already know, especially ones they’ve consumed in the on-premise," said Brandy Rand, IWSR’s chief operations officer for the Americas.
Near Marina del Rey, the parking lot for Los Angeles Wine Company, Del Rey Beverage Distributors, and Beverage Warehouse was about two-thirds full on Thursday. Del Rey Beverage’s manager, Victor Garcia, called that fuller than usual. He described himself as "very busy, very busy" with no time to talk.
"It’s crazy," Garcia said. "Business is up anywhere from 15-to-17%."
Los Angeles Wine Company president Steven Bialek said his business was up slightly since the COVID-19 outbreak despite stay-at-home orders. While the store was taking recommended measures involving masks, social distancing and cleanliness, he noted that fewer customers were pushing shopping carts through the aisles and slowly browsing shelves. More were ordering online from home and then coming to pick the orders up.
"They call us or they honk and wave at us and we bring it out to their cars," he said.
Alcohol delivery also is doing well. Saucey, a 6-year-old app that "brings the liquor store to your doorstep in 30 minutes or less," has seen 400% growth in the past month since shelter-in-place orders began across the country, co-founder and CEO Chris Vaughn said.
Saucey offers beer, wine and spirits, as well as "essentials" like pizza, chips, salsa, ice cream, condoms and Tylenol in the same way Grubhub, DoorDash and other companies deliver restaurant meals. The essentials, Vaughn said, are up 1,000%.
Vaughn said his app was aimed at the impulse buyer, the person on the way home from work or already at home who wants a glass of wine while watching Netflix, but doesn't want to go to the store or head to a bar.
Once a customer downloads the app, he or she is paired with a participating retailer who sells the product. The buyer pays delivery fees.
"Most people don't know they can have alcohol delivered," Vaughn said.
Since bars, restaurants and sports stadiums closed, Saucey has experienced "explosive growth," Vaughn said. That’s caused average delivery times to slow from 29 minutes to 36.
Customers who use the app pay more than they would in a store, but less than they would in a restaurant, he said.
"People more than ever want to stay inside and be safe," Vaughn said. "What we are seeing is a glimpse into a window of where we viewed delivery being in this category in 2024, 2025. Instead it's today."
Vaughn said he expected his service – available in Los Angeles, San Francisco, Sacramento, Washington D.C., Chicago and New York City, and soon in select Florida cities – to have "extraordinary staying power" as customers learn about it and because many bars and restaurants may not recover from shutting down. He called that a tragic reason.
"Even when COVID is over, people aren't just going to go back to a packed bar or restaurant for a long time," Vaughn said. "I think a lot of bars and restaurants may be out of business."
The sales increases follow a down year for the alcohol sector. IWSR reported in January that wine consumption declined nearly 1% in the United States in 2019, the first time that had happened in 25 years. Beer volume was down for the fourth straight year, 2.3%. Ready to drink products, however, were up 50%. Sales are shifting toward e-commerce. IWSR said that in mid-March, North America-based online beverage alcohol platform Drizly reported business growing at 3½ times the rate of earlier this year. Wine and spirits were growing twice as fast as beer.
In a statement through IWSR, Lorran Brown Cosby, vice president of digital commerce for Bacardi North America, said online sales are now a "critical part of our business that is helping us weather the crisis."
IWSR reported that alcohol represents a small portion of the overall online shopping business, but it is expected to explode in coming years and brands and retailers must be prepared.
"Many people will be exploring home delivery services and e-commerce services for the first time during lockdown and social distancing," IWSR CEO Mark Meek said in a statement. "Consumption habits formed now may stick around in the future, however people who used to go out and shop will likely not switch to e-commerce completely going forward."
