Wine sales explode during coronavirus quarantines

Americans are drinking more wine in COVID-19 quarantine than they were before

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While Americans stay sheltered-in-place to avoid potential coronavirus infection, many are turning to wine as their beverage of choice.

Market research and analysis firm Nielsen report that wine has led as one of strongest alcoholic categories this year, which is up 32 percent in the week ending on April 4 when compared to sales data from the same time in 2019.

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The demand for wine is so high, Americans spent about $423 million on the alcoholic beverage in the month of March alone, according to Nielsen's data, which tracked the number of sales made on various spirit-based e-commerce sites.

“No one has ever seen the kind of channel shifting we’re seeing now. It’s totally unprecedented,” Danny Brager, Nielsen's senior vice-president of beverage alcohol practices said.

For the Boston-based, alcohol marketplace Drizly, demand for wine has certainly spiked.

“Generally, we are seeing consumers still shop the same top sellers on Drizly. Red wine continues to be the #1 seller on Drizly (with Cabernet Sauvignon being the #1 varietal), followed by white wine,” Liz Paquette, Head of Consumer Insights at Drizly wrote to FOX Business. “Rosé has started to accelerate in the last couple of weeks, potentially indicating that folks are returning to the often seasonal drink even while spending more time indoors at home.”

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Dessert wines have experienced outpaced growth at Drizly and have completely dwarfed the sparkling wine category in terms of coronavirus sales.

It’s not just bottled wine that is performing well amid the coronavirus, boxed wine is also seeing a surge. Three-liter boxes have gone up by 82 percent.

“We have seen some of the smallest growth in the champagne and sparkling wine category – this could likely be attributed to the decrease in corporate ordering, as buyers for this category tend to skew towards corporate order or gifting use cases,” Paquette explained.

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Drizly’s numbers fall in line with Nielsen’s findings, which states all price points except for those that cost $150 or more per bottle experienced double-digit lifts in sales. The average price per bottle was $42 in March, which is $4 cheaper than what Americans were spending per bottle on average last year.

The price shift may be due to direct-to-consumer alcohol sales entering “more mainstream” territory amid the coronavirus pandemic, Nielsen’s report says.

Nakedwines.com, which is based in the U.K. city of Norwich and has operated throughout the U.S., is a leader in online wine sales. The company has garnered over 200,000 American wine club members in the eight years it has been in business in the U.S. – and the coronavirus has brought about numbers Nakedwines.com is accustomed to during the busy holiday season.

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“We've rivaled Thanksgiving and Christmas. We're confident that our growth iS in line with the category,” Nike Devlin, CEO of Nakedwines.com told FOX Business in a phone interview. “Only about five or six percent of wine sales were done online last year compared to say the UK, which would be about 15 percent.”

However, sales growth numbers that would take 15 to 20 years to achieve under normal conditions are being reached by companies like Nakedwines.com in 15 to 20 days, Devlin said.

Prior to the pandemic, Colorado was the state with the highest sales by population, but now states with stringent coronavirus restrictions in the Northeast and Midwest have outpaced previous records.

“Pennsylvania, New York and Michigan are our three fastest-growing states,” Devlin shared. “Pennsylvania, in particular, has received sales growth of over 400 percent.”

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The number of new customers Nakedwines.com has welcomed from member referrals has increased ten-fold during the coronavirus, most of which Devlin credits to customer referrals and good word of mouth. A touch of social media marketing has been helpful as well.

“A lot of advertisers in sections like fashion have pulled back marketing spend., Actually, it’s a great time for online wine advertising. You're getting lower cost per click, so you're getting actually cheaper access to customers on the platform and you're getting higher engagement and higher conversion,” Devlin explained. “We’re certainly looking on to carry on investing and carry on spending, which is maybe a little different from other sectors.”

This article has been updated to specify Nakedwines.com's new customer growth from member referrals has gone up ten-fold.