Ericka Malley is organizing the craft beer fridges at Bow Street Beverage in Portland this week. Janine Kerr, a manager, said Bow Street Beverage has been “much, much busier” with retail sales this year, but the wholesale business has declined. Brianna Soukup / Employee photographer
Mainers filled with alcohol in the first few weeks of the pandemic, but sales data suggests the rest of 2020 stayed broadly in line with previous years.
At the beginning of December, gross wholesale sales for the state spirits company rose by 9.3 percent in the same nine-month period of 2019, according to the state. The last five years showed an average annual growth of around 7 percent.
“It doesn’t seem like people are drinking more or less,” said Janine Kerr, manager of Bow Street Beverage in Portland. “It’s just that a lot of people drink at home instead of going out.”
Craft beer production fell for the first time in more than a decade, but most of Maine’s breweries are still up and running.
According to national research firm Nielsen, total alcohol sales have increased 20.8 percent since the 52-week period ended February 29. Sales of spirits for external consumption rose by 29.5 percent, followed by wine with 21.9 percent. Sales of beer, flavored malt beverages and cider rose by 17.1 percent.
According to a report from late September, adults aged 30 and over consumed 14 percent more alcohol in 2020 than in the previous year.
As early as the spring, Maine liquor retail sales rose nearly 19 percent after Governor Janet Mills placed an order for a stay at home on March 31.
As the year went on and fewer people went to bars and restaurants to slow the spread of the coronavirus, stores selling alcohol saw more traffic.
Kerr of Bow Street Beverage said the retail side of their business was “much, much busier and the wholesale, which depends on bars and restaurants, has been much, much slower.”
Kyle O’Connor, manager of Old Port Spirits & Cigars in Portland, said that despite the decline in the wholesale business, total sales in 2020 were higher than in 2019. At the start of the pandemic, customers would have been buying items of great value like box wine and 30 packs of beer.
“The larger formats sold a lot more,” he said. “In the second half of the year, I don’t know if it was the incentives or the fact that people are getting back to normal a little, but they are expanding and buying a variety of things.”
Even before the pandemic, O’Connor’s facility was using a delivery service called Drizly. During the 2019 holiday season, a typical day would bring in three or four deliveries. This year, on the Wednesday before Christmas, there were 55.
Due to reduced operations and complete closings of bars and restaurants, more alcohol is being bought in retail outlets.
“It’s been a more profitable year for the liquor stores,” said O’Connor. “There is more consumption at home.”
According to government data, the biggest leaps in alcohol sales year-on-year were in June (18.4 percent) and September (17.5 percent). The other months of the pandemic showed single-digit increases with the exception of March (15.9) and April (14.8).
Joe Jalbert refills the wine at Bow Street Beverage on December 28th. Nationally, sales of wine for external consumption rose 21.9 percent after the pandemic began. Brianna Soukup / Employee photographer
Robert Denton, the owner of Oak Hill Beverage in Scarborough, said he saw a significant increase in sales, visits, and the average sales amount per customer, until a seasonal adjustment was made in September. The absence of Canadian tourists and a decline in leaf tensioners made traffic lighter, but Denton said sales are still higher than last September.
He also said that sales of wine and beer had increased significantly across the board and that by August 2019 he had sold 20,000 more bottles of wine than the same route.
“The final quarter of the year remains seasonally strong and sales / visits are up (have) risen sharply (year over year),” Denton wrote in an email response to a reporter’s question. “People really want to support a locally owned small business while having a safer and less crowded shopping experience. They appreciate that we are there and answer questions. “
The production side of the equation is less rosy. The Maine Beer Co. in Freeport, which is now in its eleventh year of existence, had planned to increase production from 25,000 barrels in 2019 by another 2,000 barrels this year.
Instead, due to the pandemic, the company will finish around 20,000 barrels this year. “We’re comfortable with the challenges,” said Ann Marisic, director of marketing and communications.
Marisic also said that the product mix has changed significantly from last year (70 percent draft and 30 percent bottled) to this year (55 percent draft, 45 percent bottled). The lower demand for draft beer was due to indoor operations being forced to cease or restrict operations in an attempt to slow the spread of the coronavirus.
Ericka Malley is packing a customer’s purchases at Bow Street Beverage in Portland on Monday. A surge in direct sales of spirits and beer to consumers at the start of the pandemic slowed towards the end of the year. Brianna Soukup / Employee photographer
A full beer keg contains 31 gallons. The state imposes an excise tax of 35 cents on every gallon produced in Maine. The federal government is taxing the larger container and has been charging USD 3.50 per barrel since 2017. That fee should return to its previous level of $ 7 a barrel on Jan 1st. However, Congress included a provision in the recent coronavirus relief bill called the Craft Beverage Modernization and Tax Reform Act that made the lower tax rate permanent.
“This is really helpful because every brewer that opened in the last two years has never paid $ 7 a barrel,” said Sean Sullivan, president of the Maine Brewers’ Guild. “We estimate this will have about $ 1.25 million left for brewers to invest in their businesses.”
Sullivan said he only knows of two Maine breweries that ceased operations during the pandemic, one in Biddeford (Nuts & Bolts) and one in Lincolnville (Andrews). The state currently has 156 licensed breweries, although some have multiple locations, each with its own license.
When it comes to Maine beer brewed and sold in Maine, Sullivan said 2020 saw its first drop (around 20 percent) after rising incessantly since 2009. Market share (percentage of all beers sold in the state brewed in Maine) was 14.4 percent last year, and Sullivan is forecasting a slight decline to 13.7 percent this year. Five years ago it was 9.5 percent and a decade ago it was 6.2 percent.
Brewers who sell beer in grocery stores have seen sales spike, according to Sullivan, while those who operate in smaller towns where the only beer sold from tasting rooms have received community support for deliveries or roadside collection.
“Winter will definitely be a challenge for the majority of our members,” he said. “The plus side is that they had a few months to figure out how to run production and balance it with demand.”
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