Despite its reputation as one of the country's biggest beer-drinking holidays, St. Patrick's Day celebrations likely won't provide much of a boost to the sagging beer market.
St. Patty's Day ranks last in off-premise beer sales for each of the 11 US holidays tracked by Nielsen, with sales of 48.6 million cases at grocery stores and similar locations in the two weeks leading to the holiday last year. That compares to 63.4 million cases for the Fourth of July, the category leader.
What's more, the National Retail Federation and BIGresearch expect spending on the holiday to remain relatively flat this year, with the average spending per person rising a mere 32 cents from 2009.
"With limited budgets for their discretionary expenditures, partygoers will look for inexpensive ways to celebrate St. Patrick's Day this year," said Phil Rist, Executive Vice President, Strategic Initiatives, BIGresearch.
As such, NRF expects spending to shift to off-premise retailers this year, despite consumers' tendency to celebrate at on-premise sites such as bars and restaurants. According to the research group, 18.9 percent of celebrants will attend a private party this year, versus 16.7 percent in 2009.
This follows a recent consumer trend toward drinking at home, which tends to be less expensive than at bars, said Nick Lake, vice president, group client director of Nielsen's Beverage Alcohol Group. According to Lake, industry estimates have reported on-premise same-store sales decreases between 7 and 12 percent, depending on the category or brand.
But the shift toward private parties shouldn't significantly impact St. Patty's Day beer sales either way, said Gary Hemphill, senior vice president of Beverage Marketing's Information Services.
"Offhand, I am guessing it's a wash overall," he said.
The beer market has struggled through the downturn, as consumers look to cut back spending on discretionary items. Despite the category's low prices compared to wine and spirits, off-premise case volume on the year is down 1 percent in the overall market, according to Nielsen.
But one bright spot for the industry continues to be craft beer sales. Volume in this category has risen nearly 9 percent on the year, and dollar volume has risen 12.4 percent to $1.57 billion — giving it nearly 7 percent market share in dollars.
Though the average price of a six-pack of craft beer is about $7.86, compared with $4.83 in the overall market, consumers have started to view the specialty beverages as a form of affordable luxury, experts said.
"The consumer clearly sees the value in trading up to craft beer," Lake said. "They play right in the sweet spot of authenticity, [and] they play right in the sweet spot of quality and value."
But that's not to say the trading-down effect isn't present in beer sales. While some use the small price strata between beer categories as an excuse to splurge, others have traded down to below-premium brands such as MillerCoors' Keystone Light.
"Today's beer lover is bipolar," said Julia Herz, Craft Beer Program director for the Brewers Association, suggesting that consumers switch among several brands depending on the occasion or their mood.
Experts said a big reason for the holiday's lower off-premise sales is that despite the shift, the majority of St. Patrick's Day drinking still occurs at bars and restaurants, whereas holidays such as Easter are more family-oriented and celebrated at home.
Seasonal drinking also comes into play, as St. Patrick's Day is typically cooler than the top five beer-drinking events, which include Memorial Day and Cinco de Mayo.
But although the holiday doesn't bring as much of a boost to beer sales as some might expect, it does give them a kick start before the main selling season, which starts around Easter, said Kathy Grannis, an NRF spokesperson.
"It's a nice boost in a typically slower selling season," she said.
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