The Retailing Landscape - IRI

Spirits are up as business adjusts to Covid-normal

Words Angus Byrne, IRI

The liquor off-premise industry during Easter 2021 is a far different situation than it was in Easter 2020. By the 12th of April 2020, lockdowns were a common site in all Australian metropolitan areas, this led to families and friends being unable to gather for the Easter long weekend as capacities were placed on households and the onpremise channel was closed. Off-premise liquor sales of alcohol were down in Easter 2020 from Easter 2019 by -0.6 percent. However, Easter 2021 sees a very different situation where Australians could go out and travel, were able to return to the onpremise and gather in large groups. Hence when assessing the two weeks to Easter 2021 against Easter in lockdown 2020 we see double digit growth of +10.7 percent across the liquor off-premise channel. Liquor saw the strongest dollar growth rate when compared to different FMCG channels with a growth rate of +16.9 percent for the year to 04/04/21.

When comparing the Easter periods in 2020 and 2021, we see that all liquor categories registered actual value growth, with spirits leading the charge, followed by beer/cider and then wine.

Spirits had a strong growth in Easter 2021, increasing dollar sales by +$94.5m compared to year ago. This growth in spirits was driven by RTD’s, which grew by +$56.3m and at a growth rate of +59.1 percent. Four of the five largest value growth contributing brands in sprits are RTD’s. They include RTD Jack Daniels +$7.3m, RTD Cruisers +$6.9m, RTD Smirnoff +$6.3m, Glass Spirits Smirnoff +$6.2m and RTD Canadian Club +$5.5m. While these five brands are the actual dollar drivers of growth, they are not growing at the fastest rate, with the exception of RTD Smirnoff which grew +133.7 percent.

While Spirits overall is the highest growth driver, beer individually outperforms RTD’s as this category alone saw an actual increase of +$56.8m vs Easter 2020, growing at +21.2 percent. Meanwhile, cider only accounted for 4.0 percent of the value growth that beer did. The top four largest growth contributing brands during Easter this year were also the top growth drivers in Easter 2020. The top five beer brands in terms of volume growth include Great Northern Brewing Co +$9.7m, Carlton +$7.3m, XXXX +$4.2m, VB +$3.9m and Hahn +$3.8m. Within the cider category Mercury and Somersby are the two major brands driving growth over Easter, as together they accounted for 98.4 percent of cider growth during Easter 2021.

Wine was the liquor category that saw the least growth in the off-premise channel. Overall, wine saw actual dollar increase of +$26.0m vs Easter 2020 (an increase of +14.1 percent), which was driven by sparkling wine (+$17.3m) and table wine (+$11.9m). However, while wine saw strong growth, both cask and fortified wine types drained the wine category, with fortified wine growth down -$0.5m and sales of cask wine dropping by -$2.9m. Mumm is the top performing brand in terms of total wine sales and is the largest growth driver of all wine brands for Easter 2021, growing by +$3.6m. Also, Chandon sparkling and Moet & Hennessey champagne saw growth of +$1.1m each. Meanwhile, both Penfolds and Squealing Pig grew table wine. Squealing Pig saw triple digit growth of +126.9 percent (+$2.3m), whereas Penfolds grew by +35.8 percent, generating +$1.1m against last Easter.

From a territory perspective, all liquor categories registered growth across all states, with the eastern states all driving similar levels of value growth for off-premise. NSW had the highest level of total liquor sales than any other state in both Easter 2020 ($214.7m) and Easter 2021 ($258.5m) and is the largest driver of value growth with an increase of +$43.8m vs last Easter (+20.4 percent). This is followed by Victoria which saw value growth of +$43.7m and Queensland which grew by +$41.7m. Across all Australian states the growth driver is spirits, which accounts for 40 percent of total growth across all states and territories.

The off-premise liquor industry saw a very strong growth in Easter 2021 compared to last year, driven by spirits. Strong growth in all categories across all Australian states and territories led to a highly successful key selling period. What will be interesting to see now, is how the Easter 2021 strong performance will compare with next year’s holiday season.