On-Premise Beer Volumes Through Mid-August Difficult Across All Segments of Beer
According to GuestMetrics, while spirits and wine both saw volume trends improve slightly through mid-August, beer trends deteriorated, with growth slowing across all segments of beer. This is against a backdrop of continued weak overall restaurant and bar trends during 3Q, with total traffic down 1.9 percent during the 4-week period ending August 11th. The broad consumer base remains under economic pressure and has been holding back discretionary spending, with restaurants hit particularly hard.
“As we wrote about recently, while spirits and wine both saw volumes rebound slightly during the 4-week period ending August 11th, that was not the case for beer. Beer volumes were -4.3 percent during 1Q13, and then showed a relative improvement to -2.1 percent during 2Q13. However, for the 4-weeks ending July 14th, beer volumes softened to -3.8 percent, and during the 4-week period ending August 11th, deteriorated even further to -5.3 percent, which is concerning, particularly in light of the slight improvement in underlying volume trends that spirits and wine both saw during the same period,” says Bill Pecoriello, CEO of GuestMetrics LLC. “To understand where the pressure is coming from, we also looked at the various on-premise segments, and unfortunately, the deterioration for beer is occurring across the board in casual dining restaurants, fine dining restaurants, and bars/clubs.” Based on data from GuestMetrics, comparing year-over-year volume for beer for the 4-week periods through 6/16/13, 7/14/13, and 8/11/13, beer in casual restaurants decelerated from -2.9 percent to -4.0 percent to -5.6 percent; in fine dining, beer volumes softened from +0.3 percent to -2.1 percent to -2.6 percent; and in bars/clubs, beer volumes showed the sharpest decline, going from -2.6 percent to -4.3 percent to -6.4 percent.
“Similarly, we also looked at the various segments within beer to see if any held up better through mid-August, which unfortunately wasn’t the case,” says Peter Reidhead, vice president of Strategy and Insights at GuestMetrics. “Premium Light volumes have been deteriorating, going from -8.9 percent through mid-June to -11.3 percent in mid-July, and now -12.6 percent in mid-August, which is its greatest volume contraction of the eight 4-week periods thus far in 2013.” Based on data from GuestMetrics, comparing year-over-year volume for the beer segments for the 4-week periods ending 6/16/13, 7/14/13, and 8/11/13: Premium Regular slowed from -6.1 percent to -6.5 percent to -8.1 percent; Imports also weakened steadily going from -5.1 percent to -6.1 percent to -7.1 percent; due to tough comps from the prior year, Premium Plus dipped into negative y/y territory, going from flat to -0.9 percent to -2.7 percent; and while still in positive y/y territory, craft volumes also are slowing, going from +5.2 percent to +4.0 percent to +1.9 percent (lower absolute growth rates than in off-premise due to the significantly higher penetration in on-premise and also the fact that overall restaurant traffic and sales are under pressure).
“Net of all of the above, beer’s loss of alcohol share has accelerated over the past few months, and saw its worst share loss in mid-August since the very beginning of the year,” says Brian Barrett, president of GuestMetrics. “As we’ve written about extensively, restaurant and bars have generally been having a tough 2013 as much of the broad consumer base remains under economic pressure, but unfortunately the beer category has been under-performing overall on-premise and alcohol trends throughout much of the year, with this quarter on pace to be the weakest of the year.”