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Napa wine prices sold directly to customers slow value growth in April

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Wine sales in U.S. stores picked up further in stores in early May but was still behind the pantry-filling period just after the mid-March lockdowns of the economy to stop the spread of the coronavirus, according to new data. But the weekly gain for wine was outpaced again by sales growth for spirits but ahead of that of beer.

And consumers continue to have much more wine shipped to their homes under the public health shelter orders, with such direct-to-consumer sales picking up further last month, albeit at lower prices for North Coast wines, new figures show.

Sales of wine in off-premises channels such grocery stores grew 35.8% in dollar value for the week ended May 9 from a year before and up 5.7% from the week before, according to market research firm Nielsen.

Yet spirits revenue was up 48.5% from a year before and 6.3% from the previous week. Beer was up just 2% from the week ended May 2 and 20.4% from 12 months earlier.

Store wine sales in the nine weeks since the economic impact of COVID-19 started coming ashore in early March were up 30.7% from a year before, and annual growth for five of those weeks was over 30%.

Beverage alcohol sales growth from stores may slow when last week’s data is analyzed, according to Danny Brager, senior vice president of beverage alcohol at Nielsen. Yet consumers are expected to reach for more libations from store shelves this week as summer approaches and locales nationwide continue to relax lockdown restrictions.

“But we then expect sales to accelerate leading up to Memorial Day, due to several factors: weather, consumer confidence in ‘celebrating’ via consumption at home/out of home, along with likely some — albeit limited — on-premise consumption,” Brager said.

And consumers seem to increasingly celebratory, as sparkling wine sales revenue surged in U.S. stores, up 48.1% the week of May 9, after lagging last year’s performance in the early weeks of the pandemic.

Nielsen estimates that total alcohol off-premises sales volume growth needs to stay above 22% to make up for lost sales when restaurants have been closed or selling drinks at significant discounts with take-out orders. Off-premises wine sales volume was 27.7% above last year during the COVID-19 period, as of May 9. The firm said that rebalancing threshold of sales for beverage alcohol producers between on- and off-premises markets will change as restaurants reopen for dining.

For direct-to-consumer wine shipments, volume grew 45% in April from a year before and up from March, but the value of those shipments rose 15%, according to the latest Wines Vines Analytics/Sovos ShipCompliant data provided to Nielsen. The lower revenue growth came from a fall in the average price per bottle sold, to $33 this year from $42 last year.

Napa wines, said to be the largest contributor to direct sales measured, had the biggest reduction in price, the firms said.

Total off-premises sales of beverage alcohol online in the U.S. continued to surge, up 338.8% in the week ending May 9 from a year before, according to Nielsen/Rakuten Intelligence data.

Jeff Quackenbush (707-521-4256, jquackenbush@busjrnl.com) covers wine, real estate and construction.

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