Fine Wines/Champagne and Spirits in the US

2020 IMPACT

COVID-19 restrictions dent sales across category

Following more than a decade of continuous growth, fine wines/champagne and spirits registered declines in both retail value and retail volume sales for the first time in recent history in 2020. For the most part, sales declines came as restrictions to in-store shopping, intended to curb the spread of COVID-19, including the closure of liquor stores in some states from mid-March to May or June, in addition to additional hygiene and social distancing protocols throughout the rest of the year, led to a decrease in foot traffic.

E-commerce cannot make-up for limitations to in-store shopping

While both grocery retailers and non-grocery specialists, which includes wine and liquour stores, were deemed essential and therefore able to operate during lockdowns lasting from mid-March to May or June in many states, with non-grocery specialists only forced to close in certain municipalities, capacity limits and additional hygiene protocols enforced during that time and throughout the rest of the year led to a reduction in foot traffic to stores that limited sales. Similarly, certain cities, such as Chicago, IL, placed restrictions on the sale of alcoholic drinks in stores past certain times and/or on certain days, in order to prevent people from gathering outside liquor stores and potentially spreading the virus.

Increased at-home consumption leads consumers to trade down

Sales of fine wines/champagne and spirits also fell in 2020 as a result of economic constraints, as many consumers not only saw their discretionary income decrease as a result of job losses or a reduction in work, but also saw what discretionary income to spend on alcoholic drinks they did have spread thinly as increased time spent at home as a result of COVID-19 restrictions led many to significantly increase their at-home consumption of alcohol. With e-learning, remote work and closures and/or capacity limits at bars and restaurants lasting throughout much of the year, leading consumers to spend significantly more time inside their own homes than in a typical year, many also increased their consumption of alcohol as they drank from home more often, and sometimes even throughout the day.

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