According to GuestMetrics, beer, wine, and spirits categories have evolved in markedly different manners in the on-premise channel since early 2012, with dramatic differences in growth rates and share changes when analyzing the top 25 brands in each category versus all other brands.
“In analyzing the thousands of unique spirits, beer and wine brands sold in our on-premise system since the beginning of 2012, we see that there are dramatic differences in how the roll-up of the top 25 brands in each category as of the start of 2012 has performed over the course of the last year and a half,” says Bill Pecoriello, CEO of GuestMetrics. “Looking specifically at the beer category, we see that while the top 25 brands at the beginning of 2012 accounted for around 57.5 percent of total beer sales, as of the most recent quarter, those same brands saw their share fall to around 53 percent, for a decline of over 4 points.
“In spirits, there was a similar though less dramatic trend taking place, with the top 25 brands going from a 51 percent share of spirits sales at the beginning of 2012 to around 48.5 percent as of 2Q13 for the same brands, for a decline of about 2.5 points.
“In wine, however, we see some stark differences, with the category being vastly more fragmented. As of the beginning of 2012, the top 25 brands only accounted for about 6.9 percent of total wine sales, and as of the most recent quarter, the share for those same brands had actually increased slightly to about 7.1 percent, for a gain of about 0.2 share points.”
“To put this in a different perspective, we also looked at the relative difference in year-over-year growth rates between the top 25 brands in each category versus the thousands of smaller brands,” says Peter Reidhead, vice president of strategy and insights at GuestMetrics. “In beer, while the top 25 brands as of the beginning of 2012 saw their sales decline about 4.2 percent during the first half of 2013 versus the same period in the prior year, the long tail of the next ten thousand brands saw sales grow +5.7 percent, netting out in the +0.1 percent growth in sales for the overall beer category.
“In spirits, the top 25 brands saw their sales decline 1.1 percent, while the long tail of the next thousands of brands saw their sales grow +4.5 percent during the same period, netting out in the +1.7 percent growth for the overall spirits category thus far in the year. In contrast to the beer and spirits category, however, we see that in the wine category, the top 25 brands as of the beginning of 2012 have seen their sales grow +4.8 percent thus far in 2013, while the long tail of the next thousands of brands saw their sales grow a more modest +1.8 percent, netting out in the overall wine category growing about +2.0 percent thus far in the year.
“We believe the trends in the beer and spirits category may be largely reflective of the momentum of the craft brands in each category coupled with the growth driven by innovation, while in the wine category, the out-performance of the top brands could be indicative of marketing and advertising that is finally starting to create some brand loyalty in a category which historically has had less compared to beer and spirits.”
“Despite the relative under-performance of the roll-up of the top 25 brands in beer and spirits, this does not mean that all of the largest brands from the beginning of 2012 in beer and spirits have seen their sales contract,” says Brian Barrett, president of GuestMetrics. “Looking at beer, the most notable exceptions among the top 25 brands are Blue Moon, Stella, Dos Equis, Corona Light, Shock Top, and Negra Modelo, which have seen robust growth despite being among the top 25 brands. In spirits, the most notable exceptions are Jameson, Maker’s Mark, Jack Daniels, Jim Beam, Ketel One, and Skyy. The alcohol space is extremely dynamic, and having an up-to-date understanding of these trends is critical for restaurant operators and alcohol suppliers alike.”