EXTRACTING THE ESSENTIAL
NATIONAL ACCOUNTS ON-PREMISE COMMERCIAL DEVELOPMENT
BUSINESS HEADLINES
SGWS On-Premise wine & spirit dollar volumes were down -8% through Q2; with negative acceleration from -6% in Q1. Case performance is lower with wine (-10%) versus spirits (-7%) however, wine is outperforming spirits in dollar trend (-4% vs. -6%). This reflects a continued slowing of premiumization. From a channel perspective, the best performers in dollars were Recreation (-3%) and Lodging (-1%). National Accounts On-Premise is performing slightly better than on-premise overall. The trade-down is happening on both spirits and wine in key areas. For spirits, the #1 category at SGWS On-Premise in dollars is tequila and it’s experiencing trade-down from $40-$50 (-10%), $50-$75 (-5%), and $75+ (-12%) to tequilas priced $20-40 (+3%). For wine, Sparkling >$40 was down (-12%) while $10-$20 was up (+2%) and Red Wine <$8 was up (+2%) while red wine price tiers >$8 were down. Within each of these categories and price tiers there are still many brands outperforming like Don Julio Reposado and Caymus Cabernet whose category and price tiers are in decline, but they are gaining share.
INSIGHTS BEHIND THE BUSINESS TRENDS
According to the Conference Board as of June 25, consumers’ persistent concerns about the future continues to weigh on their confidence. While consumers were less concerned about an upcoming recession in June their assessment of their family’s financial situation was less positive. Despite 1 in 4 consumers reporting visiting the On Premise more often than usual to treat themselves, 3 in 10 are visiting less frequently driven by the rise in food and drink prices and cost of living increases.
Based on these trends, opportunity exists to ensure programs are featuring a range of prices of spirits, cocktails and wines for guests either looking to splurge or to manage spend closer. CGA also reports that guests are looking most for “value for the money” (what you get for what you pay) over simply “low/lowest priced” items, so it’s critical those ranges of items are priced appropriately. In addition,
opportunity exists to re-think daypart programming to capitalize on the trend of dine-in occasions shifting earlier (late afternoon and early evening). This trend appears to have a few key drivers - work schedules have changed post- Covid with people leaving work earlier or working from home; looking to enjoy on-premise when there might be more specials and deals; as well as intermittent fasting where participants tend not eat or drink as late. These traffic shifts are reported to be more apparent with younger guests than older guests offering an opportunity to capitalize on beverage alcohol sales.
LIQUID INSIGHTS TOUR UPDATE
As of the end of June, the tour is more than half-way done with stops and blogs written about our experiences in Tampa, Los Angeles, Austin and Portland. Denver and New York will round out our visits and we’re looking forward to taking you through our 2024 findings on cocktail and wine trends!
ON-PREMISE ARTICLES
INDUSTRY:
US beverage alcohol market set for slow recovery after ‘reset year’
“…challenges related to inventory levels, squeezed disposable incomes and moderation are likely to continue, but the US will remain the key value driver among mature beverage alcohol markets.”
IWSR 6/26/24
WSWA’s Q1 2024 SipSource Report Tracks Underperforming Market, Identifies Unique Growth Channels, Predicts Stabilization and Improvement in Q2 and Beyond
“The first quarter of 2024 ended in a lull, as March depletion performance dragged down the three-month total.”
WSWA 5/7/2024
Middle Class Americans Are Acting More Like Lower Income Earners
“By many measures, middle-income earners have fallen in line with their lower earning counterparts while wealthier consumers pull ahead.”
Morning Consult 4/4/24
Suddenly There Aren’t Enough Babies. The Whole World Is Alarmed.
“The world is at a startling demographic milestone. Sometime soon, the global fertility rate will drop below the point needed to keep population constant. It may have already happened.
WSJ 5/13/24
The Wine Industry is Getting Pressed as Young People Drink Less
“…Younger people are drinking less than previous generations — and those who do drink are frequently opting for beer, spirits or even marijuana. As a result, the wine industry is struggling.”
The Week 4/9/24
Price is most important factor in wine choice, say US drinkers
“When choosing wine, American consumers consider price above all other factors, a new study by YouGov finds.”
The Drinks Business 4/19/24
US Consumers Turn to Italian Wine
“Gateway grapes and delicious discoveries lure in wine lovers new and old.”
Wine-Searcher 4/22/24
California’s beleaguered wine industry finally gets some good news
“The wine market’s decline could reverse in the next decade, a new report suggests.”
San Francisco Chronicle 5/15/24
What’s driving the growth of no-alcohol in the US?
“IWSR data shows strong growth for the US no-alcohol segment, driven by a relatively underdeveloped market and high levels of moderation intent among consumers.”
IWSR 5/13/24
Ozempic maker sets clinical trial to study drug’s effect on alcohol consumption
“The drug has reportedly reduced patients’ urge to drink, which could mean it could help treat alcoholism.”
SCRIPPS NEWS 5/20/24
Restaurants Are Killing ‘Tacky’ QR Codes and Customers Are Thrilled
“Survey conducted by market research firm Technomic, QR codes actually discourage patrons from dining at an establishment altogether.”
Delish 5/31/24
SALES CORNER
ON-PREMISE
RANKED BY DOLLAR SHARE
CURRENT YTD THRU JUNE 2024
TOP WINE VARIETALS
SPARKLING
CABERNET SAUVIGNON
OTHER RED
CHARDONNAY
PINOT NOIR
SAUVIGNON BLANC
PINOT GRIGIO/PINOT GRIS
BLUSH/ROSE
OTHER WHITE
MERLOT
SAKE
MOSCATO
RIESLING
SPECIALTY
VERMOUTH
PORT
WINE BASED APERITIFS
MARSALA
SYRAH/SHIRAZ
SHERRY
MADEIRA
ASST/MIXED
WINE BASED LIQUEURS
MISC. WHITE
ON-PREMISE PERFORMANCE
The decline in the on-premise has continued through the first half of this year across almost all channels. Economic concerns and inflation have made consumers less able to go out. According to Technomic’s midyear report, 78% of LDA consumers are concerned or very concerned about inflation’s impact on them personally. Across dining, the biggest loss came from polished casual and fine dining. Casual Dining is struggling but not as significant as upscale accounts. With the inflation rate being higher in the on-premise versus off-premise we can expect to see a decline in consumer traffic and a shift to more at-home drinking and eating. This trend may continue until the end of the year as major restaurant chains have announced closing more locations. Despite all the decline, brands that are outperforming the category are Don Julio Reposado, Aperol, Caymus Cabernet, Skrewball Whiskey, Espolon Blanco, and most of the Josh varietals and High Noon flavors.
OFF-PREMISE
RANKED BY DOLLAR SHARE
CURRENT YTD THRU JUNE 2024
TOP WINE VARIETALS
CABERNET SAUVIGNON
CHARDONNAY
OTHER RED BLEND
PINOT GRIGIO
SAUVIGNON BLANC
PINOT NOIR
WINE-BASED COCKTAIL
SPARKLING PROSECCO
SPARKLING OTHER WHITE
MERLOT
ROSE REM BLEND
FLAV ALL OTHER
MUSCAT/MOSCATO
CHAMPAGNE WHITE
OTHER WHITE BLEND
MALBEC
RIESLING
WHITE ZINFANDEL
SWEET RED
ZINFANDEL
SANGRIA
SPARKLING ROSE
ROSE MOSCATO
FLAV MOSCATO
NON-ALCOHOLIC WINE
OFF-PREMISE PERFORMANCE
The overall spirit category is continuing to grow while still wine continues to slightly decline. Sparkling wine, primarily prosecco, is showing growth while other sparkling varietals are declining. Prepared cocktails are taking share away from beer and are a big reason why overall spirit sales are positive. Similarly, wine-based cocktails are driving the most growth within wine. These trends are projected to continue for the next few years according to IWSR.
Non-alcoholic wine and spirits, though off a small base, have continued to grow year over year. Younger consumers are shifting to more health-conscious options which is the reason we are seeing such growth in this area. Tequila has gained share year over year as
TOP SPIRIT CATEGORIES
VODKA
WHISKEY AMERICAN TEQUILA
PREPARED COCKTAILS
WHISKEY CANADIAN CORDIALS RUM
WHISKEY SCOTCH
BRANDY/COGNAC
WHISKEY IRISH GIN
WHISKEY JAPANESE
NON-ALCOHOLIC SPIRITS
a result of the increase in celebrity brands primarily around this subcategory. Brands like Flecha Azul, Casamigos, Teramana, 818, and Codigo are just a handful among a growing list. According to Nielsen, consumers are more willing to try and pay extra for a brand that has a celebrity they support.
Sources: IWSR; Nielsen | Total US xAOC + Liquor Plus + Conv Ending 6-18-24 YTD
MIXOLOGY LAB
FLUFFY JUICE
by Debbi Peek, Director of Mixology
WHAT IS FLUFFY JUICE AND HOW DOES IT TASTE DIFFERENT?
At New York and LA’s Dante, they have turned the Classic Garibaldi cocktail (Campari and Orange Juice) into an instant success, just by tweaking one key ingredient, the orange juice, turning it into “fluffy orange juice.” Achieved by using a highspeed Breville juicer, the resulting OJ is extra aerated giving it a light, frothy texture. The texture of the “fluffy” juice reminds me of one of my childhood favorites, the Orange Julius. It is also possible to achieve a similar frothiness via a regular blender, immersion blender, or even a handheld milk frother.
In addition to fluffing up the texture, the treatment of the juice also intensifies the flavors and aromatics in the drink.
HOW TO MAKE FLUFFY JUICE
Fluffy orange juice should be freshly squeezed, so you need to start with quality, freshly pressed, or squeezed juice.
When using a high-speed centrifugal juicer, peel the oranges first, but leave some of the pith on to balance the natural sweetness of the fruit. The pith is the white, fibrous membrane that separates the fruit segments from the peel. Juicing the fruit with the spongy pith also adds density to the juice. It is bitter, so avoid leaving too much on unless you are looking for that flavor profile. If you don’t have a juicer, place freshly squeezed juice in a high-speed blender and whiz it on high until frothy or blitz with an immersion blender or even a handheld milk frother.
The Fluffy juice method can also be done with other acidic fruits like grapefruit, pineapple, lemon and lime.
RECIPES
You can alter the juice’s color and sweetness by varying the type of oranges used. Naval oranges are traditionally used for juice since they yield a lot and are very sweet. Valencia are more balanced, offering a sweet and tart taste, while blood oranges have the most stunning color and deliver a more bitter flavor than either option.
Another adjustment is fluffy ”magic” orange juice by manipulating the juice with a tweak known as “acid adjusting.” Acid adjusting or “magic juice” is the process of adding either citric acid, or citric and malic acids to a juice with a low titratable acidity (i.e., pineapple, grapefruit, or orange juice) to bring the total acid level to the same as that of lemon or lime.
Aside from a Screwdriver and the Garibaldi, other delicious citrus cocktails would benefit from an upgrade with the addition of fluffy orange juice. Use the silky juice in another 1980’s cocktail, the tropical Painkiller. Blend Pusser’s rum with cream of coconut, pineapple, and fluffy orange juice to be transported to the Virgin Islands.
Debbi Peek is Southern Glazer’s Wine & Spirits, Director of Mixology, National Accounts, based in Tampa, FL. With over 20 years’ experience in the food and beverage industry, her cocktail creations are simple, elegant, and always perfectly balanced. Her passion is creating cocktails that are on trend, easy to execute and taste as good as they look.
ACCOUNT SPOTLIGHT
DANTE | BEVERLY HILLS, CA
The original Dante opened in 1915 in New York City. However, it wasn’t until it was purchased and re-opened by new owners in 2015 that it started to attract major national accolades including 50 World’s Best Bar List and Tales of the Cocktail designation as world’s best restaurant bar in 2019. In fact, it was right around this time where Southern Glazer’s originally visited Dante for an earlier version of its Liquid Insights Tour in 2017 and 2018
However, Dante and its owners have now traversed the US to open its 2nd location in Beverly Hills. And it was one of our Tour visits to LA earlier this year. Unlike its iconic New York locale, this location is large (not cozy and quaint) with an unbelievable roof-top view of LA atop the Maybourne Hotel. They also modified their cocktail menu to “flex” for LA with some new cocktails to complement the classics like its famous Garibaldi made with their “fluffy OJ.” New cocktails ranged from mini cocktails leveraging the spirit-only pre-batched cocktails as well as more tequila options since it’s more popular there in CA.
Some of the stand outs were its bottled “With a Twist” martini and the “Tequila Martini” on its expansive “Martini Hour” section on the cocktail menu. Martinis are having a massive resurgence across the US as seen in this year’s Tour and Dante was the first we saw that really leveraged the martini category that can be a sign for opportunities for other restaurants across the US to revisit their martini offerings.
Their wine menu was equally elevated and like many trendforward locations devoted a higher percentage (65%) of their by the glass offerings to sparkling and chilled whites and rosé. Another thing they’re doing that we’re starting to see more and more is including dessert wines on the list too – in this case a Sauternes and a Tawny port. Finally, they list a broad offering of luxurious wine ½ bottles that continues to grow in popularity at fine dining locations for decadence in moderation.
WHEN RINGING IN THE NEW YEAR, PEOPLE APPROACH THIS EXCITING TIME WITH RESOLUTIONS FOR THE FUTURE.
Some may want to take better care of their health through cutting calories, sugar, or consuming items with perceived beneficial ingredients in hopes of losing weight. Others might be looking to partake in the infamous “Dry January” to cut alcohol altogether for 31 days. If you are seeking a fresh start this January, Southern Glazer’s has the insights and wine & spirits offerings for success.
Non-Alcohol sales have reached $565 Million and are (+35%) versus a year ago. Non-Alcoholic Beer holds the largest share with 86%, followed by Non-Alcoholic Wine with 11% and Non-Alcoholic Spirits with 3% market share. The N/A spirit’s segment (+93%) is growing the fastest. Ritual Zero Proof (+96%) is the leading brand within the N/A spirit’s category. Southern Glazer’s also proudly distributes Seedlip (+7%) and Cleanco (+186%). The top performing Non-Alcoholic wine is Fre (+14%); Freixenet (+40%) offers alcohol removed sparkling wine. When crafting your mocktails, these are perfect solutions for providing the flavor without the added effects of alcohol.
For those who still want to enjoy the social aspect of consuming alcohol but are looking for healthier alternatives, the “Better For You” wine and spirits segment is growing (+12%) versus year ago. The top performing low calorie wines include Kim Crawford Illuminate Sauvignon Blanc (70 calories per serving) with 27% market share followed by Cupcake Light Hearted Chardonnay (80 calories per serving) with 16% market share. High Noon, Sunny D, Long Drink Zero Sugar and Ketel One Spritz RTD’s offer healthier alternatives containing 100 calories or less per serving.
Restaurateurs – these trends have become popular all year but are especially relevant in January. Prepare now and heavily promote them in January. Try expanding mocktails beyond sodas and seltzers or develop a “Better for You” menu section.
Source: NIQ Scan Off-Premise Channels; Discover Integrated Beer, Wine, & Spirits database; Latest 52 weeks ending 12/30/2023 vs. year ago
UPCOMING DRINK HOLIDAYS
EXTRACTING THE ESSENTIAL
