Less interest in Dry January (SAM)
Every year the popularity of “Dry January” keeps growing or is growing by journalists and marketing departments. The concept of abstaining from alcohol for the month is not new and coincides with many New Year’s resolutions. The timing also seems to be effective after holiday indulgences. In 2019 a Nielsen survey found that 20% of respondents gave up alcohol in January. In October, a survey commissioned by Bacardi reported that more than half of urban American adults plan to try to spend January dry. 20% of the respondents who said they would observe dry January are trying it for the first time, while the other 35% say they will do it annually. There have been articles speculating on an even larger Dry January this year with consumers drinking more during the pandemic. Based on Google trends, that looks to be incorrect, as seen in the chart below. On the surface, the idea of abstaining from alcohol when there are fewer social interactions would appear to at least be easier for people. Alcohol-free beer has had a banner year in 2020. Nonalcoholic beer sales are up 38% in the year ended Nov. 1. Guinness and Heineken, among others, have launched alcohol-free offerings. Boston Beer is expected to launch its nonalcoholic offering in 2021. However, part of the appeal of abstaining is perhaps social engagement/encouragement? The average length of time people observes dry January is 21.4 days. Americans are consuming more alcohol while restricted at home, so maybe January 2022 could be much drier?
Liquor shortages still occurring (DEO)
Many liquor stores are still reporting shortages of major, top 20 spirit brands like Crown Royal, Patron, Hennessy. Strong demand is driving the shortages. According to IRI, through Nov. 1, Patron sales are up 40%, Hennessy is up 38%, tequila is up 55.5%, and Cognac is up 56.2%. New Jersey wholesaler Allied Beverage Group reported that their retail customers' growth is making it impossible for the company to replenish fast enough. Shutdowns and restrictions for Pennsylvania liquor stores added extra demand across the border in New Jersey, Ohio, and Maryland. Many stores also cited shortages of box wines like Black Box (included in Constellation Brands’ sale to E. & J. Gallo) and Bota Box in the summer and champagnes now during the holidays. Meijer has limited a two-bottle limit during the holidays for whiskey, vodka, and tequila. Both Patron and Diageo said they are working to address temporary out of stocks.
Grocery sales decelerate (KR)
The week ended Dec. 20, the total CPG demand slowed to +3% from +11% in the previous week. That represented the slowest YOY growth rate during the pandemic. The uptick in COVID-19 cases and associated restrictions appears to be slowing grocery sales, as seen in the chart below. Beverage alcohol slowed to -7% from +10% in the previous week. The frozen category slowed to +15% from +19% in the previous week. The frozen category remained the top-performing category and had the smallest deceleration. Non-edible categories declined 3% YOY.
