5 Insights from Drizly’s June Sales
Ready-to-drink (RTD) cocktails are spiking and tequila continues to climb, among other takeaways
Summer looks a little different this year, with fewer occasions to enjoy drinks at bars and restaurants. That shift directly impacted consumer purchasing habits in the month of June. Some expected seasonal categories, like hard seltzer, are still experiencing strong growth, while others, like ready-to-drink (RTD) cocktails, are benefiting from the increase in outdoor and at-home consumption.
BevAlc Insights spoke with Liz Paquette, Drizly’s head of consumer insights, to learn about breakout brands, dive into product category shifts, and gather insights about alcohol purchasing patterns in Houston, one of America’s largest cities.
In June, High Noon, Cointreau, and Skrewball topped the list of products experiencing the highest year-over-year growth. According to Paquette, standout growth for hard seltzer brands was expected. “Summertime is seltzer season, so it’s not surprising to see this brand take off during this month specifically,” she says. However, the huge growth of relative newcomer High Noon points to the vodka-based seltzer’s ability to succeed in both the RTD cocktail and hard seltzer categories.
Home cocktail culture has driven growth for liqueurs, cordials, and mixers, but Cointreau has the added benefit of its association with tequila (as an ingredient in the classic Margarita) — which has also been on an upward trajectory — to push it beyond ahead of other products in the category. As for Skrewball, which has likely also benefited from the increasing trend to make cocktails at home, Paquette points to the brand’s ability to attract loyal fans. “Skrewball’s Peanut Butter Whiskey has taken on somewhat of a cult following,” she says.
As they did in May, the hard seltzer and silver/blanco tequila categories experienced the highest year-over-year share growth in June: An increase of 1.99 percent and .93 percent, respectively. While these numbers initially seem to indicate a slowing of growth compared to the month prior, Paquette sees it differently. Tequila is coming off of a monster month for tequila purchasing around Cinco de Mayo, which was far higher in 2020 than 2019 given stay-at-home orders.
For hard seltzer, meanwhile, the category didn’t really start taking off in 2019 until June. “Because of that, you saw a higher year-over-year share increase in May as the foothold that was gained in 2019 carried into late spring,” Paquette clarifies.
However, a third category joined the list of standout growth categories in the month of June: RTD beverages, which were up over last year. While home cocktail culture has resulted in increased sales for spirits, liqueurs, and other cocktail ingredients, RTDs offer the added benefits of convenience and portability.
“Convenience is definitely a macro trend that continues to take hold in the beverage alcohol industry,” says Paquette. Instead of having to mix up their favorite cocktails at home, consumers can simply reach for a chilled, ready-made cocktail in their own refrigerators. With more format options entering the market as well, RTDs are portable, which is increasingly important to current consumption habits. “This likely plays into some of the drinking occasions we’re seeing more of in 2020, including outdoor picnics and barbecues,” says Paquette.
RTD Category Growth
June sales indicate that the RTD category, which has seen very strong sales recently, has experienced some product shakeups recently. High Noon has begun to dominate the RTD category, holding 49.97 percent of RTD share in the month of June. “High Noon is an RTD vodka seltzer positioned amongst malt hard seltzers,” says Paquette. “This has allowed the brand to both capitalize on the hard seltzer trend and differentiate the product with their ‘real vodka, real juice’ tag.”
At the same time, last year’s June leader on Drizly has experienced diminishing popularity; Skinnygirl, which accounted for 19.43 percent of share in June 2019, now holds just 5.73 percent of share. Paquette notes that this is likely because of new entrants to the category (like High Noon) as well as lack of portability that many canned RTDs offer.
New Customer Acquisition
New buyer sales were up 432 percent over baseline on the first weekend of summer, compared to an average of 270 percent over baseline in weeks prior. Because new buyer sales have been continuously strong since Covid-19 hit, Paquette surmises that this points to the continued trend for alcohol to be purchased and consumed at home, as social distancing continues. “Perhaps in the year prior,” she says, “more consumers were out celebrating the longest day of the year in on-premise locations or vacation destinations versus stocking up for at home celebrations.”
Market Insights: Houston
Houston residents flocked to Drizly during the month of June, making it one of the country’s fastest growing markets. “This may have partially been driven by more consumers returning home as Covid-19 concerns rose in the area,” says Paquette. New on-premise closures and renewed health cautions likely contributed to increasing demand for fast, reliable, and safe home alcohol deliveries.
Compared to one year prior, June also saw share decreases in Houston’s top five categories — vodka, red wine, white wine, bourbon, and Scotch — as hard seltzer and tequila gained prominence, which these categories also did at a national level. Vodka maintains that top spot, though, which is a reflection of Houston’s local beverage preferences. “Texas is by far and large a spirits market, driven in large part by vodka,” says Paquette.