Rabobank Quarterly Q2 2020 Report - Members Only
Report summary - Covid-19 and the US Premium Wine Market, Part I: The Challenges
Covid-19 Has Disrupted Premium Wine Sales
Covid-19 contaminant measurements, such as shelter-in-place and lockdown orders, have pummeled the on-premise channel. Over March and April 2020 combined, an estimated of USD 47bn YOY (-75%) reduction in total sales occurred in US foodservice and drinking establishment ...
The On-premise Channel is Small Volumetrically but Very Important for Access and Margins
For small premium brands, accessing major retail chains was difficult going into this crisis, and we expect the penetration gap is likely to get worse for small brands. Nielson reports that the top 100 brands in the pre-Covid-199 era accounted for 65% of off-premise sales, but by May 2020, this had risen to 70% ...
Barring a Vaccine, the On Premise Will Likely Take Years to Recover
That said, we believe that a recovery in the higher end of the on premise will take more time. A recent Nielsen survey of those that have returned to the on premise since reopening began indicates that 88% have had a positive experience. However, the survey also suggests that older consumers ...
The Path Forward is Increasingly Digital
Given the challenges in the on premise, much of the sentiment in the industry has been understandably pessimistic. The structural challenges facing this critical channel will have unavoidable consequences for the industry. Wineries - not just in the US, but around the world - are going to have to find new pathways to the ...
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