As a follow up to last month’s blog focusing on the on-premise, SipSource Analyst’s took a closer look at the off-premise in November for both wine and spirits, highlighting a segment of the market that has been a drag on both the wine and spirits throughout 2023.
Overall, November data showed a decline of -4.7% for spirits in the off-premise, revealing that the sector’s growth slowed in November after a slight positive swing in October, the company states. Similarly, wine struggled in off-premise throughout 2023, albeit at steeper declines, dropping -8.7% in the rolling 12-month November data.
The last uptick in growth for wine in the off-premise occurred in July, although at that time the decline was still at -6.3%. While the results aren’t stellar, SipSource highlights some pockets of growth:
Cocktails & Tequila Eek Out Growth in the Off-Premise
Of the eleven main product classes tracked in SipSource, positive results were posted by two categories in November-ending data: Cocktails (+4.0%) and Tequila/Agave Spirits (+1.8%). Cocktails posted positive results in Liquor, Convenience and Mass Merchandise channels, while Tequila gained in Liquor, Grocery, Convenience and Mass Merchandise, according to the company.
SipSource tracks outcomes in seven census divisions and both Cocktails and Tequila/Agave Spirits posted positive results in five and three of the regions, respectively. Tequila was boosted by strong double-digit gains in the East North Central (+16.7%) and South Atlantic (+12.2%) divisions. Meanwhile Cocktails – Spirits declined in the Northeast (-1.9%) and Pacific (-3.8%) regions slightly offsetting positive gains across the rest, the company states.
Looking at the pricing spectrum, Cocktails only saw a decline in Price Tier 3 ($7.50-$9.99) while Tequila posted increases in Tier 3 ($17.00-$24.99) and Tier 4 ($25.00-$49.99), although those two price bands account for just over 65% of category volume in the off-premise, according to SipSource.
Another bright spot of note is that both Vodka (+3.2%) and Cordials/Liqueurs (+5.5%) had success in the Convenience channel while the former also posted a gain in the Mass Merchandise (+1.1%) and the latter achieved an advance in Club/Wholesale (+2.2%), SipSource states.
Wine-Based RTDs A Bright Spot in the Off-Premise
The results across wine classes weren’t as favorable as spirits with only Cocktails – Wine (+0.2%) posting a result in the black in November. It’s important to note that this segment of the market only accounts for 2.2% of total off-premise wine volume and has ceded volume gains for each of the last six months, according to SipSource.
This class of wine had strong growth in the Club/Wholesale (+95.2%), Convenience (+19.7%) and Drug (+10.8%), although in aggregate they only account for just above a quarter of its off-premise volume. Of the census divisions in SipSource, Wine – Cocktails gained in the Pacific (+4.1%), Mountain (+43.1%) and West North Central (+0.2%) regions. The Price Tiers 4 ($10.00-$19.99) and 5 ($20.00+) accounts for 22.2% of category volume but offset the declines posted by the three other price bands, SipSource states.
What’s Next?
Similar to last month, SipSource found that industry growth continues to slow across premise and channel with declines more pronounced in the off-premise. With the holiday buying season just concluding, the question is will it be enough to bolster segments of the market that have struggled to this point?
