US off-trade sales surge during pandemic, and driven by international imports

By Fiona Holland

While the US on-trade has been hard hit by the government mandated closures of the hospitality sector, the off-trade saw its value surge by 13% last year.  

According to a new report by Wine Australia, it is international wine imports that have enjoyed a higher growth than local wines, up by 16% in comparison to 12%. The countries steering this increase were Italy, France and New Zealand.  

Part of the off-trade sales increase is likely to be due to the massive influx in online sales. Statistics from Nielsen/Rakuten Intelligence show there was a jump from around one million to nearly three million dollars- worth of online sales between February and April last year.   With most restaurants and bars closed, on-trade wine sales slumped by 43% by the end of October 2020, according to Nielsen CGA.   National wineries in particular were badly affected according to a survey from Silicon Valley Bank, which notes a drop from 14.7% in 2019 to 115 last year in on-trade wine sales.   Lots of distributors were also negatively impacted by the closure of on-trade sites, which left many of them with no on-trade accounts.

However, the report says the rise in e-commerce throughout the pandemic has resulted in some distributors having to change their way of working. One example is Southern Glazer’s Wine & Spirits who created their own business-to-consumer E-commerce team during the pandemic.   According to the National Restaurant Association, it could take a while for on-trade sales to reach their pre-pandemic levels again, with approximately one in six American restaurants having had to stay closed or shut down their businesses for good.  

The on-trade sector will almost certainly have a bigger competition now with E-commerce too. As the report says, “The online trend is here to stay, as consumers are unlikely to delete their online accounts completely once it becomes easier to access brick and mortar stores.” Whether or not American off-trade and on-trade sales will eventually balance out still remains to be seen.

Photography: Rupixen.com