Premium alcohol sales on the uptick during pandemic
Belvedere CEO Rodney Williams joins Yahoo Finance's On The Move to discuss the launch of his company's new premium vodka and the surge in sales of spirits amid COVID-19.
JULIE HYMAN: Well, alcohol is one of the many, many different markets that has changed because of the coronavirus pandemic. More people drinking at home, not seeing as many sales in outlets-- bars, for example-- that are still closed in many places. I want to bring in Rodney Williams. He is the CEO of Belvedere, the vodka company, and he's joining us from New York City. Rodney, it's great to see you again. So what have you seen in terms of your business, your customer base? And how you had to change as a result of everything that's happened?
RODNEY WILLIAMS: Yeah, well, as you-- you well mentioned, you know, having restaurants, bars, and nightclubs closed had-- had an adverse impact on our traditional business. However, we've seen a really strong uptick at retail, and particularly in terms of e-retail and e-commerce sales. One of the trends we're seeing is that young adults are spending a little bit more time at home. Maybe they couldn't go off to graduate school, didn't start that job at first.
And their digital savvy in terms of e-commerce is now benefiting their parents and others in the-- in the household. So we've seen a-- a pretty strong response there. And in the world of vodka in particular, it's a big category, the biggest in terms of spirits. And overall, consumers are moving into many different craft spirits. But the super premium vodka category is growing, and we've been fortunate to be a part of that. So net net, we're up 11% year-to-date and 16% for the most recent quarter ending in July.
ADAM SHAPIRO: Hey, Rodney, it's good to see you again. My birthday's coming up soon. And I make a mean Moscow Mule, the key ingredient vodka. My birthday's coming up soon.
RODNEY WILLIAMS: [LAUGHS]
ADAM SHAPIRO: I'm curious because with Belvedere Vodka, you have a new-- a new kind of vodka. Would that be good in my Moscow Mule? My birthday's coming up really soon, by the way.
RODNEY WILLIAMS: [LAUGHS]
I think so. We-- we might even entice you to-- to a whole new way of drinking. So we just launched something called Heritage 176. And basically, we went back to the archives and created a vodka the way vodka was created up until the late 1800s, early 1900s, where the rye is malted at 176 degrees, hence the name Heritage 176, and it imparts flavor with no sugar.
There's no additive, and that's the beauty of Belvedere is that it's all natural. It's literally just rye and water and distilled by fire, nothing else. So I take away notes of-- of honey and roundness in the-- in the finish, but it's a great sipping vodka. So we're-- we're quite excited about it.
DAN HOWLEY: Rodney, I can only ask about the-- the growth of people drinking more at home and kind of whether or not it's been as exceptionally, I guess, large, or if it's just kind of been around the same. Are we really seeing a lot more people drinking at home, and-- and what do those numbers look like?
RODNEY WILLIAMS: Yeah, so we're-- we're still sorting out those dynamics. I think when the pandemic first hit around March or so, there was a lot of pantry loading. People were stocking up, but there was still the assumption that we'd ride out this situation for a couple of months and the world would somehow right itself, you know, certainly by the-- by the end of summer.
Now that there's a realization that this has more staying power and there is a new norm, at least in the interim while the-- the pandemic reigns, consumers have really embarked on creating drinking experiences at home that they weren't pursuing beforehand. We're seeing people convert garage space into home bars, which we weren't seeing before.
Our online consumption recipes with bartenders and ambassadors is nothing like it ever was prior to the-- to the pandemic. So some of these behaviors we suspect will continue. There's still a big angst that our research says probably about 12% of consumers who really only drank in restaurants and bars and clubs that we want to get back into the-- into the category.
JARED BLIKRE: Jared Blikre here. I-- I want to ask you if you've noticed any trends in product mix or pricing. Are you still able to command-- are you still selling as much as a premium product, or are people just kind of going bargain basement shopping?
RODNEY WILLIAMS: Yeah, it's a great question. And a big fear of ours, given the fact that, you know, we play at the-- the top of super premium vodka, that that would be the case. But in fact, what we're finding is that-- and this is true of being in a recession or other difficult times, there is a sort of retreat to quality that the consumer has where he or she wants to have real confidence in what they're buying.
And it's, you know, also with the economic pressure that we're all facing that they're really getting quality for their money. So we're finding in a category like vodka, the premium and super premium brands are really the brands that are driving the growth more than the-- the economy brands, and the-- this interest in craft and craft spirits has really continued to sustain itself.
Now, it's also probably true that the stimulus spending helped facilitate some of that. And so we're-- we're still-- we still believe as we move into the fall and winter and possibly a second wave of the-- of the pandemic that we are-- we're still sorting out the-- what the new norm is going to be.
JULIE HYMAN: Rodney, great to see you. Thank you so much. Rodney Williams is the CEO of Belvedere. Be well, Rodney.
RODNEY WILLIAMS: Yes, happy birthday in advance, Adam.
JULIE HYMAN: Gee, I wonder what I'm going to get him.