On-Premise/Off-Premise: The Impact of the Pandemic on Alcohol Sales Trends

Altered consumer behavior throughout the pandemic has changed the rules of retail. When on-premise alcohol sales dwindled as restaurants and bars were required to reduce services or close during the spring of 2020, off-premise alcohol sales establishments like grocery and liquor stores became essential businesses. They remained open as alcohol consumers flocked to them. Drinking at home necessarily replaced socializing at restaurants.   

Has this trend continued? Let's go back to the beginning of the pandemic to examine how alcohol consumption and sales trends have changed, and check out projections for the future.  

How Alcohol Sales Were Impacted During the Pandemic

It's no surprise; US alcohol sales have followed the erratic path of many aspects of our lives since the pandemic created sweeping changes in how we live and work. There was no slump in alcohol consumption, but restrictions forced consumers to alter their purchasing and consumption habits.

A Rise in Alcohol Sales Despite Closed Venues

In the early months of the COVID-19 pandemic, alcohol sales at restaurants and drinking establishments decreased dramatically by 27% from March to September 2020. 

During the same period, alcohol sales at beer, wine and liquor stores rose by 20%, reaching 41.9 billion dollars. This study concludes that people were making off-premise purchases, with restaurants shuttered or open for takeout only. 

Breaking a Nearly Two-Decade-Old Record

In fact, US alcohol sales in 2020 were at their highest level in 18 years, according to a recent Food and Wine article. Ready-to-drink beverages like hard seltzers were up a whopping 63% during the pandemic. Additionally, the ready-to-drink category is expected to surpass wine sales in volume by the end of the year, according to the International Wine and Spirits Record (IWSR).

Sales of spirits overall rose in 2020, up by 4.6%. That was the largest single-year increase since 1990. Not surprising, as bars and restaurants where cocktails and mixed drinks are most often consumed were closed or operating under restricted conditions. 

Interestingly, agave-based spirits experienced a surprising rise in sales by 15.9%, putting them right behind vodka and whiskey on the sales roster.  

How Alcohol Sales Trends Have Continued to Evolve in 2021

With the economy reopening in 2021, food and beverage sales in the restaurant industry have rebounded.   

"Food and beverage sales in the restaurant and foodservice industry are projected to total $789B in 2021, up by 19.7% from 2020," according to The National Restaurant Association's, State of the Restaurant Industry report. 

As the pandemic has progressed, alcohol sales have not slowed significantly, as they did previously, during the initial forced shutdowns. Some distilleries are even working at 200% capacity, showing that the alcohol industry is struggling to produce enough product to meet demand.  

Bar and restaurant reopening is one apparent reason for the alcoholic beverage industry boom.  However it’s not the only one.  Like many other aspects of our lives, the way we drink alcohol and the amount consumed has continued to evolve since the start of the pandemic. US alcohol consumption increased by 2% in 2020, which is the largest year-over-year increase since 2002.

The data also suggests alcohol volume sales won't likely slow significantly anytime soon. That prognosis is seconded by a Statista  post that notes: "The market for Alcoholic Drinks is expected to show a volume growth of 3.6% in 2022".

Efficient Inventory Management is a Priority in a Booming Alcohol Market 

How can retailers and suppliers keep sufficient amounts of top-selling alcoholic beverages in stock during this era of peak sales? Thankfully, multi-featured B2B solutions like iControl are available to facilitate inventory tracking so retailers and suppliers can maintain effortless visibility and stay aligned —ensuring they always have the right products their customers are looking for at the right time. 

iControl also offers the nation’s largest on-premise POS database to provide meaningful insights from over 35,000 bars and restaurants nationwide. Powered by AI, the platform delivers actionable reports when you need them, so you can make informed decisions regarding your retail or sales strategy. The solution provides access to data on covid-19 market dynamics. The data provided includes which geographies and categories are rebounding, and which are lagging. You'll gain full access to sales data and trends by location.

Want to learn more about how to succeed as a retailer or supplier in the alcohol industry throughout the duration of the pandemic and beyond?  Contact us to request a demo of iControl’s solution today.