In the first half of 2020, just one week of containment cost France 585 Million Euros in total on-trade consumption. Over the first half of 2020 (mid-June), on-premise food consumption in France fell by -35%. As the country emerged from the first wave of containment, the transition to teleworking limited the recovery of the on-trade sector.
Alcohol sales fell by 16% (in value terms) in the 12 days following the introduction of the first containment in France. Both still wines, whose sales have fallen by 2%, and spirits, which have plunged to -3%, have in fact been in decline since the start of the confinement. On the other hand for beer, sales in grocery since 17 March have tended to rise by +7% compared with the same period in 2019.
Some alcoholic beverages even suffered spectacular declines, such as champagnes and other sparkling wines, liqueurs and ciders. Apart from the rosés, wine sales are increasingly in decline, driven by hypermarkets.
On the other hand, the progress of convenience supermarkets is confirmed. Wine sales have increased in the drive by 118% and 158% in April 2020.
We have analyzed red wines listed in the French Riviera restaurants (PACA aka Provence-Alpes-Cotes d'Azur).
The on-premise sector in Europe was more strongly affected compared to Latin America and Asia. One of the main explanatory factors is the high penetration of meal delivery applications and services in Asia and Latin America compared to European cities. Penetration of the meal delivery market (under 50) in South Korean cities is 99%, 84% in China and 80% in Brazilian cities. In comparison, penetration is much lower in the United Kingdom with 36%, 37% in Spain and 44% in France.
Online food ordering has smoothed the impact of COVID-19 for some countries, creating new opportunities in these difficult times. This service is well established in Asia and Latin America, and represents a good growth path to explore for the recovery in Europe.
Relying on the use of home delivery applications could help recover lost revenue for cafés and restaurants. Home delivery services have the potential to broaden their offerings, especially in the beverage market, with a great opportunity for brands traditionally anchored in the on-trade market to expand into new moments of home consumption.
By David BECK
Director WINE ANALYTICS