Friday, September 4, 2020

No, the Booze Business Is Not 'Thriving,' Part Two

 


Historically in the US, approximately 80 percent of alcohol sales were conducted at off-premise retail establishments such as alcohol, convenience, and grocery stores; with the remaining 20 percent coming from on-premise (bars, restaurants, etc.). As Covid-19 impacts the on-premise beverage alcohol landscape, the balance between on- and off- premise occasions has shifted, with consumers being forced into even more at-home consumption.

This is from IWSR, one of the leading research companies serving the alcoholic beverage business. 

As much as it is Covid killing on-premise today, the on/off-premise ratio has been shifting toward off-premise since the turn of the century.

One reason is price. Drinking in always has been cheaper than drinking out, but the gap has grown as on-premise prices have increased more than off-premise prices over the last 20 years. Other factors driving more at-home drinking include stricter DUI laws, a societal/generational shift towards online experiences, the growth of online shopping and delivery services, and better at-home entertainment options. 

Today, there are 20% fewer places that serve alcohol than there were 20 years ago. 

According to IWSR's analysis, total beverage alcohol volume sales for off-premise increased by 9.3% over the 52-week period ending August 16th. It would need to increase at twice that rate to compensate for the estimated 75 percent loss of on-premise business. 

IWSR estimates that, when all is said and done, the industry will have grown 0.06 percent in 2020. Growth? Yes. Thriving? No. 


2 comments:

Unknown said...

I noticed this picture is of Jack's in the South Side neighborhood of Pittsburgh. Did you take this pic, or is it a stock photo?

I have many memories of this place, including my 21st birthday, my first taste of Mezcal (complete with worm) and living in the South Side after college when friends were nurses at the South Side hospital. When they worked night shifts, Jack's was the only bar open, and they were a fun crowd to go out with on a random weekday morning.

Chuck Cowdery said...

I didn't take the picture but I'm glad it brought back pleasant memories.