According to data from GuestMetrics LLC, on-premise beer trends have improved in the latest four weeks, benefitting from the World Cup and driven by improvement in bars. This comes despite a softening of traffic in the overall on-premise channel and weakness in overall consumer discretionary spending.
On-Premise Traffic: Overall, full-service restaurant and bar traffic was down 1.5 percent for the past four weeks through July 13, versus a decline 0.9 percent for the second quarter and down 1.8 percent for the first quarter.
However, bars benefitted from the World Cup. Bars showed their best performance of the year with traffic down 0.9 percent (versus down 2.5 percent year to date) while traffic to casual dining deteriorated to -1.6 percent (versus -1.2 percent year to date), fine dining traffic was down 2.3 percent, and lodging was down 1.6 percent.
Overall Beer: On-premise beer performance improved in the four weeks ending July 13, with volume down 2.4 percent, versus down 3.6 percent for the second quarter and down 4.1 percent in the first quarter. The World Cup seems to have helped performance.
Beer by Channel: Beer volumes improved in bars and clubs from -3.9 percent year to date to -1.3 percent in the latest 4 week period, while total on premise beer improved from -3.8 percent year to date to -2.4 percent in the four weeks ending July 13.
Total alcohol beverages didn’t see the same improvement as beer, as wine went from +0.4 percent in the four weeks ending June 15 to -0.8 percent in the four weeks ending July 13 and spirits went from -0.3 percent in the four weeks ending June 15 to -2.2 percent in the four weeks ending July 13.
Beer also bucked the trend of total on premise traffic, which deteriorated to -1.5 percent in the latest four weeks versus -1.2 percent in the four weeks ending June 15. Total food and beverage sales which were up 1.1 percent in the latest four weeks versus up 1.6 percent in the four weeks ending June 15.
Beer by Segment: Craft share continued to lose some momentum with share up 1.7 percent in the latest four weeks versus up 1.9 percent in the second quarter and up 2.3 percent in the first quarter.
Imports share have improved to +0.2 percent during the latest four weeks versus down 0.1 percent in the second quarter and down 0.2 percent in the first quarter. Premium Lights share was down 1.9 percent in the latest four weeks, still better than the down 2.1 percent from the first quarter.
Spirits: Spirits volumes had a tough four-week period with volume down 2.2 percent versus down 0.6 percent in the second quarter and down 0.8 percent in the first quarter.
Year to date spirits volume is down 0.9 percent and sales are up 1.3 percent. Brown spirits continue to solidly out-perform with bourbons/blends up 13 percent, Irish up 7 percent, brandy/cognac flat, Scotch down 7 percent, gin flat, tequila down 3 percent, Canadian down 8 percent, vodka down 7 percent, rum down 9 percent, and cordials down 14 percent.
Wine: Wine volume was down 0.8 percent in the latest four weeks versus down 1.5 percent year to date with sales flat in the latest four weeks versus up 0.2 percent year to date.
Wine by the glass continues to pick up share versus wine by the bottle. Price/mix is running up around 1.7 percent overall. Luxury, ultra premium, and super premium wines are gaining share versus popular premium and economy wines. We are seeing Cabernet Sauvignon, Sauvignon Blanc, Malbec, and Prosecco gaining share and Chardonnay, Merlot, Riesling, and Zinfandel/White Zinfandel losing share.
U.S. consumer: On the consumer front, data from sister company Consumer Edge Research shows that after a healthy resurgence recently, the consumer picture in July showed signs of softening led by a pullback among both the high income and medium income groups (consistent with the recent soft trends in fine dining and the wine category), driven by a weaker outlook on household income and geopolitical uncertainty.
Low-income consumers remained under pressure with regards to discretionary spending. Given how important the high/medium income groups are for overall consumption in the United States, it will be important to monitor whether this is a one-month aberration or the beginning of a broader pullback, as we head further into the second half of 2014.