VOLUME TRENDS IMPROVE IN AUGUST, BUT OVERALL NUMBERS SOFT

In answer to the now widely reported Brandweek article earlier this week that claimed beer is poised for a comeback at spirits’ expense, a report by Bill Pecoriello of Morgan Stanley suggests otherwise. Based on IRI supermarket scanner data for the four weeks ending August 12, volumes were up 0.6% and dollars up 4.1% for total alcohol. Bill says wine and spirits added to the growth while both imported and domestic beer decreased.

Spirits volume continues to grow ahead of dollars, which is likely due to a mixture of discounting and consumers drinking low-end. The average price of spirits per volume declined 0.5% as compared to a 3.7% increase a year ago. Meanwhile, wine (especially high-end wine) continues to come in strong, gaining both volume (80bps) and dollar (120bps) share.

Not only do consumers want premium wines, but they are also turning more and more to small and medium-sized vineyards. As a result, major wineries like E&J Gallo and Woodbridge continue to struggle to hold dollar share. Foster’s was the only major wine company to gain dollar share, which probably has something to do with current popularity of Australian brands. Constellation once again lost share of the wine industry, losing 140bps of volume share and 70 bps of dollar share in the latest four weeks.