How to Stock Up for Outdoor Summer Sipping
Along with hard seltzer and rosé, here’s what’s flying off shelves
The time is now. After months of being cooped up at home because of the Covid-19 pandemic, Americans are looking to get outdoors and hit the beach, hiking trails, and campgrounds. Soon, people will be heading to picnics, barbecues, and other socially-distanced small gatherings — and they’re going to be BYOB-ing. Drinks retailers are already busy stocking their inventory in preparation for 4th of July weekend — a holiday that brings with it the annual spike that marks the high point of summer sales at most retail outlets.
“Especially with July 4th occurring on a Saturday, we expect it to be a gigantic holiday this year — comparable to New Year’s Eve,” says Rufus Nagel, CEO of Molly’s Spirits, which has locations in Denver and Greenwood, Colo., and a total of about 21,500 SKUs, Nagel says it’s critical to start getting inventory ready in June. “I think July 4th is going to catch a lot of retailers on their heels this year.”
At Mount Royal Bottle Shoppe and Beer Cave in Duluth, Minn., an outlet with about 6,500 SKUs, owner-manager Brandon Call says the summer spike typically occurs around July 4th, but for his store it’s somewhat dependent on the weather. “If we have warm weather right off the bat in June,” he says, “the spike will happen then.“
On Nantucket Island in Massachusetts, one of the Northeast’s major summer vacation destinations, the vast majority of alcohol sales occur during the summer months for small retailers like Nantucket Wine & Spirits — and that seasonal spike occurs earlier. “In a typical year,” says partner Alanna Lucas, “Memorial Day weekend is when summer starts. This year, [business] has been more gradual but steady sooner.”
Drizly’s data reflects a similar trend. “Typically,” says Liz Paquette, Drizly’s head of consumer insights, “we see seasonal sales begin for summertime around Memorial Day weekend and escalate up through July 4th, when they’re at their peak.”
What Are People Drinking This Year?
Convenience will be one of the major factors influencing sales trends this summer. “During the Covid-19 crisis, we witnessed cocktail culture come home,” says Paquette. “Ready-to-drink cocktails in particular well outpaced the growth that Drizly was experiencing overall, up an average of 773% above baseline, or what we would have expected to see at that point in time.”
The five top-selling RTD cocktail brands on Drizly are:
- Jose Cuervo
- Cutwater Spirits
- 1800 Tequila
RTD cocktails are having a great run. Greg Doonan, a communications manager at Nielsen, says that Nielsen data shows RTD cocktails are performing well in the market. “We’ve seen consistent growth rates over 80 percent in dollar sales in the off-premise for eleven consecutive weeks.” RTDs performed well last year too. Total RTD volume was up 43.1 percent in 2019 compared with 2018, according to the global data firm IWSR.
Because summer is a time of increased outdoor activity, the biggest change Molly’s sees is an influx of informal drinkers, says Nagel. “Rather than going for the $80 red that they might buy in the winter, people want an outstanding $12 rosé, so we see some shifts in that direction.” Additionally, he says, summer customers are more willing to try different formats like canned and boxed wines and RTD cocktails because they tend to be drinking outside — especially this year with Covid-19.
“RTD, or bottled, cocktails are definitely on the rise,” says Nagel. “There are some amazing products out there. The Crafthouse premixed cocktail from Charles Joly in Chicago is phenomenal. We have Crafthouse RTDs in 200-milliliter single-serve aluminum bottles for about $5 to $6 each. We also sell a lot of the Sauza Margarita premix, but I think if anything, consumers have become much more interested in exploring higher end RTD over the last few months.” Cutwater, says Nagel, has been the top-selling RTD brand at Molly’s over the past year, but “High Noon is finally getting good representation in the store and will likely surpass Cutwater.”
“Right now in Duluth,” says Call, “June is only starting to get warm, so we’ve been selling more bar-style drinks, especially since bars are only just opening in our state.” He says that Mount Royal has also seen a small increase in mixed cocktails, like the On the Rocks RTDs by Knob Creek. “They’re easy, they’re good, and they’re fresh,” he says. Other premix products are also doing well, including Frenchie, a rosé-based RTD by local distiller Vikre. “That’s huge. We’re selling their 4-pack cans and we’re selling 50 cases of those a week.” He adds that they’ve also seen a “crazy increase” in tequila this year. “With Covid and everything else that’s going on, we’ve never sold so much tequila before it’s actually gotten warm.” Vodka spritzers, such as High Noons, as well as Joias are also increasing in sales at Mount Royal.
At Nantucket Wine & Spirits, Lucas says, liquor and beer sales have definitely increased along with RTD options. However, she says, “rosé and spiked seltzer seem to be taking the lead so far.”
Hard Seltzer and Beer
All three retailers are seeing hard seltzer (technically known as flavored malt beverage) fly off the shelves, especially the White Claw brand. “Hard seltzer is off the hook,” says Nagel. “The big surprise of 2020 is that we sell more White Claw than any other single beer SKU.” He adds that beyond the big corporate brands, local breweries in his area are now experimenting with doing their own hard seltzers.
“Hard seltzer continues its meteoric rise,” says Doonan, “up 255 percent year-over-year in the off-premise for the latest week ending June 6, and up 307 percent year-over-year for the pandemic period to date (the 14-week period ending June 6). It has grown to a double-digit dollar share of the beer/FMB/cider category.”
This isn’t surprising considering that hard seltzer was the largest-growing category in the U.S. last year in terms of absolute volume growth, according to the IWSR. On the flipside, the IWSR reports that total beer volume declined 2 percent in the U.S. in 2019.
Paquette points out that in the last couple of years, Drizly has observed a more significant shift toward beer in cans. “Cans increased from 42 percent in 2018 to 56 percent in 2020, [whereas] bottles decreased from 56 percent in 2018 to 42 percent in 2020. Nagel has observed this in his own state. In Colorado, he says, cans are “a symbol of quality.”
This year, the five top-selling brands in canned beer and seltzer on Drizly are:
- White Claw
- Bud Light
- Truly Hard Seltzer
- Miller Brewing Co.
Big brand beers are top sellers for the three retailers Drizly spoke with, but local beers sell well too. “We have a couple of surprising top-sellers,” says Nagel. “One of them is Montucky Cold Snacks,” This local light beer is the second-best-selling beer at Molly’s. Each year, Molly’s also does a collaboration with a different local brewery to make its own canned summer lager: Sip of Colorado. This year the store collaborated with Bonfire Brewing Company. “Sip of Colorado is always a top-seller for us because we price it well at $5.99. It’s a really accessible light-drinking beer at a great price from breweries that typically sell at 8.99 or 9.99 a 6-pack.”
Local canned beer also has a huge following in Duluth, says Call, though hard seltzer is trailing close behind for the summer market. “Since White Claw is number one in the nation, we try to keep 50 to 100 on hand all the time — and that’s hard to even continually get. They can’t make them quick enough for how fast people are drinking them.” Call adds that lower calorie sessionable beers are also still selling well, but since the White Claws hit, his customers have been transitioning back and forth between the two.
In general, says Nagel, people are looking for lighter craft beers, like saisons, in summer. “It’s a strong and growing category,” he says. “Lower alcohol beers are definitely on the rise, especially since people are sitting at home these days drinking more than they used to.”
One beer product that seems to be losing traction, says Call, is the sour. “I would say they’re still quietly popular, but the sour beer market has taken a backseat to where it was in the last 2 to 3 years.” It’s the lighter domestic-style sours that people are attracted to now, rather than the European-style import sours.
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Many were projecting that canned wine was on an upward trajectory, but Paquette says that despite the hype, Drizly hasn’t seen significant movement in market share for the category. “There has been a steady increase year-over-year in the last few years,” he says, “but canned and carton wines still only account for approximately 1.5 percent of wine share on Drizly.”
This year, the five top-selling canned wines on Drizly are:
- BABE rosé
- Dark Horse Wine rosé
- Underwood the bubbles
- Underwood rosé
- House Wine rosé
Nielsen reports that off-premise dollar sales of canned wine increased 70 percent during the 14-week pandemic period.
At Mount Royal, says Call, canned wines are “slowly becoming a thing.” Boxed wines, he says, “have been really big.” He attributes the uptick in part to pandemic buying and the increase in warm weather in Duluth. Rosé, he predicts, is going to be a top-seller again this year. “It’s definitely a go-to,” he says. He expects Vinho Verde to make a comeback as well. “It’s a value wine,” he says. “It’s easy for multiple meals. The Pinot Gris and Viognier might actually start to make a comeback too because we’re seeing more of those in the cans.”
Rosé in all containers has been selling well this summer at Nantucket Wine & Spirits, but Lucas has also observed that some lighter styled reds have gained traction, “especially when [we] suggest putting a slight chill on the wine.” As for canned options, she says, “we don’t have many due to a limited cooler space, [but] I always have one canned rose, and then try to squeeze something else in if I can.”
At Molly’s, Nagel says, “House Wine is definitely the highest selling canned wine for us, but a close second is our own canned product — a sparkling rosé made with grapes sourced from Oregon.” Molly’s sells it for about $5 a can. “We’ve got a really innovative product that’s doing pretty well that’s not yet the top, but I think it will be,” he says. “It’s so fun. It’s called French Pool Toy.” Last year, he says, this rosé from France was sold in a 750-milliliter plastic bottle and marketed, literally, as a pool toy — it was a top-seller. This year, he says, they did equally innovative product packaging with a 1.5 liter bag of rosé for $17. Molly’s sells rosé all year round, but ramps up its total rosé SKUs from 50 in the winter to 500 in the summer. “Literally, an entire aisle in our store is all rosés.”
Another big summer seller at Molly’s is grower Champagne. “We have the best selection of grower Champagne in Colorado,” he says. “Even though we have lots of sales in the winter, I think the splurge that occurs in summer is a really good $40 or $50 bottle of Champagne. That’s something we see a spike in during summer. I’m not sure why, but other than rosé, that’s a top seller. Our summer sales of grower Champagne exceed our winter grower Champagne sales by 50 percent.”
Products to Watch
Based on recent data from Drizly, Paquette says that retailers should be keeping an eye on brands like 1800, Drinkworks, On the Rocks, Montebello, and Cayman Jack. “Jose Cuervo,” he adds, “has become a dominant force, accounting for 20.36 percent of RTD share — up 5.06 percent from 2019.”
Most notably, Paquette says, Skinnygirl appears to be losing steam. “From 2018 to 2019, they lost approximately 10.61 percent in share of the RTD category. From 2019 to 2020 (to date), they’ve lost 1.08 percent.” She adds that Cutwater, Bacardi, and Fisher’s Island all lost marginal amounts of share. Four Loko, she says, “has dropped significantly — from 3.77 percent of RTD share in 2018 to 0.82 percent in 2020.”
Nagel adds that the whole concept of locally produced products is even more important now than it’s ever been. “There’s an increased perception of quality associated with local [products],” he says. “Our customers really do look for products produced in Colorado,” he says. “If they can find it, they’ll buy it. If they can’t find it, they won’t.”
Making the Most of Summer Inventory
There are a number of ways to maximize seasonal sales this summer. Being smart about how you manage online delivery is one strategy that can lead to major gains. “The number one priority,” says Paquette, “is to make sure your inventory is synced and up to date to highlight your seasonal offerings and the known top sellers.”
Drizly accounted for about 5 percent of sales at Molly’s in 2019, according to Nagel. But before the Covid-19 crisis hit, the store had ramped up its e-commerce infrastructure and staff training in anticipation of higher delivery sales over the next 3 to 5 years. “During Covid,” he says, “sales grew to 25 to 30 percent. In-store sales are down 15 percent, maybe more, but we’ve made up for all of that — and more — using the Drizly app.” Nagel suggests thinking of your online delivery platform as a different store. “Think about the customer, what they want, why they’re ordering delivery instead of coming in. You’ve got to study the taste profiles and the demographics, and try to match your product selection to that.”
Call emphasizes the importance of getting local products linked on online delivery apps in time for the summer spike. “Stuff that’s already been linked is easier for you to sell online,” he says. If you want to add any new local products, get them linked as soon as possible, Call advises, especially if your business is just starting to open back up. “People are going to look for those local products right off the bat.”
Another important consideration is market trends, says Call. “What you sell online isn’t necessarily what you sell in the store.” If you’re not paying attention, you’re going to miss the wave of new products that your online customers are looking for, he says. “Sometimes you can’t wait for people to ask for the new products. You have to take the risk and bring them in, or else you might lose out.” Mount Royal has had Drizly for a little over a year. Since Covid-19, the shop’s online delivery sales have increased 20 percent.
But there’s one caveat to that, says Nagel. The market has changed in ways we still understand yet, so retailers need to keep iterating. “The pandemic has caused shock and a reset across many industries,” he says, “and it’s not done shocking and resetting. There’s great uncertainty about what people want and people are making different choices from what they used to make. It seems like that’s happening every week.”
“This year is unprecedented,” says Lucas. “I think having a [diverse] selection of seltzers, RTD and rosé [in summer] is always good. But lately, she says, she finds herself joking that she should open a second store with only rosé, Tito’s and spiked seltzer.