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Top Players Report Surging Off-Premise Sales, As On-Premise Shuts Down

March 17, 2020

Leading drinks industry players are adapting to a new reality this week, with the coronavirus outbreak shutting down the on-premise in many U.S. states. Off-premise sales are showing sharp increases as consumers rush to stock up ahead of what could be a lengthy crisis. As of this morning, at least 19 states had announced the closure of on-premise outlets, although many are still allowing takeout and delivery.

“While our off-premise accounts have been extremely busy, on-premise activity is being adversely impacted by broad social distancing and government restrictions in a growing number of markets,” Breakthru Beverage president and CEO Greg Baird told SND. “We’re working diligently to help our customer partners be as efficient and effective as possible in light of the circumstances.”

Tom Cole, president and CEO of Republic National Distributing Co. (RNDC) sounded a similar note. “We’re in a very dynamic situation right now in America with states, municipalities, and the federal government all trying to do the right thing,” he told SND. “We see mandatory closings of bars and restaurants growing from state to state. We’re reallocating our resources away from the on-premise channel to the retail trade, where we’re experiencing significant business increases.”

Business has been brisk at retailers across the country in recent days. “For our New Jersey locations, during the week ending March 15, we saw a 62% increase in overall sales, a 20% increase in overall in-store foot traffic, and a 300% increase in local delivery and pickup orders,” said Gary Fisch of New Jersey-based retailer Gary’s Wine & Marketplace. “Our top-selling items were Kendall-Jackson Chardonnay, Tito’s Handmade Vodka, Whispering Angel Rosé, and Santa Margherita Pinot Grigio.”

Fisch added that Gary’s is urging consumers to practice social distancing and place orders from home. “We just introduced a curbside pickup option for our local customers, in addition to our existing local delivery. We also launched a temporary new website called garyslocal.com, which provides a real-time feed of inventory in each store.” Sales have also increased at Gary’s recently opened Napa location, but Fisch noted that “due to the closing of wineries, and given the nature of the location’s reliance on tourism and travel, we expect to see a significant negative impact on our operations” in that market.

It’s unclear just how long the current on-premise closures and other restrictions will remain in effect. “If you use Italy as an example, many of the same precautions that were done there are being done here—working from home, closing bars and restaurants, suspending sporting and concert events,” said Cole. “We’ve been told that it may take another couple months for Europe to begin to get back to normal.”

While players at all tiers adapt to the new marketplace, they’re devoting internal resources to finding ways to mitigate the impact of the crisis on their own employees and business partners. A few weeks ago, Breakthru created a “cross-functional task force” to monitor and respond to the crisis, and the company has taken steps including restricting travel, instituting remote work policies, and limiting third-party interactions in order to stop the spread of the virus.

“We’re all operating in an unprecedented environment and we are committed to being a responsible and attentive partner across our U.S and Canadian markets,” said Baird. “We’re putting the health and well-being of our associates, customers and supplier partners at the center of our decisions.” Cole added, “First and foremost we at RNDC/Young’s are concerned about the safety of our associates, their loved-ones and our customer partners.”—Daniel Marsteller

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