THE GIST
The unofficial start of summer each Memorial Day kicks off the busiest and most profitable time of year for many alcohol producers. Sales peak between now and Labor Day as Americans celebrate time off, attend parties, and stock fridges and pantries with beer, wine, spirits, and a host of "beyond beer" products like hard seltzer. Beer’s “big four” months—May through August—represent 40% of total annual beer sales, according to data from the National Beer Wholesalers Association (NBWA), with summer holiday weekends like Fourth of July and Labor Day seeing beer deliveries to retailers 50% above the annualized weekly average.
But as the pandemic lingers, so too do narratives around booze and how we consume it. This can cause challenges in public understanding of what and how we're drinking, and even open the door for researchers to manipulate that information. With the summer sales season upon us, the Sightlines team identified several narratives commonly highlighted in recent years to set the record straight.
For most of 2020 and 2021, American media reported on the rapid increase of drinking across the country. The only problem was that whether it was self-reporting surveys or collegiate researchers, there was plenty of evidence that showed some people drank more (commonly reported around 20-25%), some less (the same percentage) and everyone else (around 50%) consuming the same amount of alcohol as pre-pandemic.
The confusion lies in a false interpretation of data:
In 2020, as shutdowns closed bars and restaurants, most drinkers could only turn to chain retail to buy alcohol.
Market research companies, which report data from those grocery, convenience, and other stores, rightfully reported large increases in sales. It was because purchases that might have otherwise taken place at a bar or restaurant only took place at a local Kroger or Publix.
Then, as waves of COVID caused spikes throughout the years, the cycle would repeat. 2020 and 2021 represented historical highs for in-store alcohol purchases that may never be repeated again. In tandem, there were historic drops in sales at bars and restaurants.
Policy wonks have jumped at these wild swings, using survey data to suggest people drank too much in the throes of pandemic life and are drinking less now as COVID worries wane for many who again visit businesses as they wish. The problem in these interpretations is a lack of acknowledgement of where and how alcohol is sold. And it leaves out the reality that 2,817 state alcohol laws have changed since 2012, according to NBWA data, allowing things like at-home alcohol delivery or cocktails to go. Today, consumption stats actually look pretty consistent.
As we hit the halfway point of 2022, we’re actually consuming about as much as we did in 2018 or 2019.
The Beer Institute, a trade group representing breweries, reports the total amount of beer shipped to distributors in the first four months of the year is nearly identical to the same amount as four years ago.
In chain retail, market research company IRI reports that beer actually sold less volume in 2021 than 2018. Wine, too. Spirits were up +27%, but that's because of the rapid influx of four- or six-packs of spirit-based seltzers and canned cocktails. Volume of beer, wine, and spirits combined are essentially flat in growth during this time period.
It’s now—well into 2022—that foot traffic to bars and restaurants is starting to return to pre-pandemic levels and things are closer to “normal” than they have been in years.
America has always had an at-home drinking culture: About 80% of the volume of alcohol purchased comes from stores, a number that increased during the worst months of the pandemic when buying a 12-pack from the corner market was the only option for many people.
If anyone purports to see massive changes in U.S. drinkers’ alcohol consumption, approach the news with caution. Rates of alcohol intake in the U.S. are remarkably steady over time, contrary to the “alarming trend” headlines we tend to read about generational shifts. About a third of Gen Z Americans (those born 1997-2012) can now legally drink, and market-research company Knit recently found that roughly that same number are consuming more alcohol than at the end of 2019. Basically, as members of Gen Z turn legal drinking age, they’re replicating historic norms of drinking.
Recent history shows the number of Americans who drink (and how much they drink) is stable over time.
Today, about 60% of legal-drinking-age adults in the U.S. say they consume alcohol, a percentage that’s stayed remarkably stable for 70 years.
Since 2000, that percentage hasn’t fluctuated by more than 5%. The percentage of Americans who report having a drink within the past 24 hours has also maintained continuity between 26-40% every year since 1984.
Total per capita alcohol consumption is even more steady, fluctuating by barely a fraction of a gallon between 2000 and 2021, according to data compiled by the NBWA.
What we drink and where we drink it is more mutable, but decades of data show we tend to do it at reliably even levels. For those watching industry trends, it’s more useful to pay attention to what people drink rather than how much they drink. As the U.S. welcomes a more demographically diverse group of consumers than ever before, those preferences are likely to shift more wildly than overall consumption patterns.
As mentioned above, growth rates can be slippery when they don’t take scale into account. This goes a long way to explaining the misconceptions that hard seltzer is “over” and non-alcoholic beer is the next smash hit in beverage alcohol.
Reports of hard seltzer’s death have been greatly exaggerated. They trace back nearly a year, when Boston Beer Co., maker of Truly Hard Seltzer, admitted on an earnings call that demand for Truly was lower than expected that quarter. Financial publications ran with the “hard seltzer is a bust” news; mainstream press picked it up; and plenty of people came to believe the narrative. Truly actually grew 31% in retail dollar sales last year, more than twice the rate of the hard seltzer category as a whole (+14%), itself well above the rates of other alcohol categories.
Here’s the reality:
Over the 52 weeks ending April 23, hard seltzers have made up 10% of all beer/malt sales in grocery, liquor, and convenience stores tracked by Nielsen. Yes, overall hard seltzer sales are slowing versus their white-hot trends a year or two ago.
But, in IRI’s tracking of hard seltzer in the most recent 52 weeks ending May 15, seltzer dollar sales were up +2.4%. That’s above beer’s -3.4%, but not as strong as the flavored malt beverage category that’s +3.4%
However, in the latest 26-week period of Nielsen data, hard seltzer sales are down -3% in chain retail stores, the same as the overall beer/malt beverage category. (Meanwhile, craft beer was down -9% during that time).
Seltzer declines are driven by losses among the top-3 brands:
White Claw (-3%), Truly (-3%), and Bud Light seltzers (-3%) were all down during that 26-week period period.
Meanwhike, Topo Chico Hard Seltzer (+571%), Vizzy (+18%), Michelob Ultra Organic Seltzer (+12%), and Lone River Ranch Water hard seltzers (+265%) were all up at least double digits. Plenty of hard seltzer brands are still gaining new fans.
Non-alcoholic beer, meanwhile, is heralded as “the next big thing.” And yes, its sales have generally outpaced the larger beer market. But scale is key: Despite this growth, non-alcoholic beer still makes up roughly 0.6% of the overall U.S. beer market. Beverage analysts are skeptical it could reach 5% here in the U.S. That pledge from AB InBev to make 20% of its global beer volume low-alcohol or non-alcoholic by 2025? Leadership says it’s “off track” with the amount at just 6% halfway through 2022.While upstart brands such as Athletic and Heineken 0.0 have posted eye-catching sales growth (Athletic alone went from the 65th largest Brewers Association-defined craft brewery in 2020 to the 27th largest in 2021), non-alcoholic beer is not a new category. Legacy players such as O’Douls (down -18% between 2017 and 2021) have declined, suggesting that some percentage of consumers are swapping those brands for newer, fresher faces.
Yes, non-alcoholic beer has improved in variety and availability in recent years; however, it’s still decidedly a niche product, and likely to stay that way.
Bryan Roth contributed to this report.
Want to stay up-to-date on all the beer and beverage alcohol news this summer? Follow Sightlines reporting on Good Beer Hunting’s Twitter and Instagram accounts.
Words by Kate Bernot