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Volume uplift in US off-trade offsets on-trade sales drop

Published:  16 June, 2020

US wine volume sales look set to be flat in 2020 with the Covid-19 led surge in off-trade sales balancing out the drop in on-trade sales, according to new Wine Intelligence research.  

Released today and based on consumer insights data collected during March and April, the report suggests that off-trade sales volumes will grow by around 10% year-on-year, while on-trade volumes are expected to fall 29%. 

The research, which is based on IWSR, Nielsen and Wines & Vines Analytics data, assumes no second wave of Covid-19 infections hitting the US in the second half of 2020.

Even if assuming a second virus wave with a lockdown in October and November, the picture still looks relatively positive in the circumstances, with Wine Intelligence suggesting a decline of around 2-3% in total wine volumes, with the on-trade seeing a year-on-year decline of closer to 50%.

Wine intelligence said it had decided not to include a specific prediction on change in dollar value of the market, citing there were too many variables to consider and that industry estimates about on-trade sales value vary widely. 

However, the researchers noted that the implications of a switch from higher value on-premise product to mainstream priced off-premise product would lead to a “significant” value decline in the US market this year, even though overall volumes are predicted to remain stable.

Lulie Halstead, CEO of Wine Intelligence, said: “In line with what was observed in the wine market during and post the global financial crisis of 2008-10, wine volumes held up in the US market, but the mix shifted towards more value brands, favouring both domestic and more dominant import brands both of which we anticipate seeing in 2020’.”

Increased tariffs and the dominance of domestic wine sold through the online and DTC channels had already put pressure on import brands in the US market and “these current shifts will further the pressure on exporters to the US market”, she added.

The research follows a Wine Intelligence report released at the beginning of May last announcing wine sales in the US had nearly returned to pre-pandemic levels after an early spike in online sales.