The First Cannabis Report From Headset And Nielsen Looks At Weed Vs. Alcohol Sales On Big Holidays
The first cannabis-focused report including Nielsen (NYSE:NLSN) data is out.
The paper, produced by Nielsen and its new data partner for the marijuana industry, Headset, is titled “4/20 The greenest day of the year: Insights and predictions based on four years of data.” It looks at trends and predictions for 4/20, the international day of pot – kind of the Fourth of July or St. Patrick’s Day for weed.
Unlike previous reports out of Headset, this one includes data from consumer insights company Nielsen. The firm, best known for putting out TV ratings and music sales information, provided numbers that uncovered a comparative view into legal cannabis and alcohol sales during consumption holidays.
According to Headset data, April 20th is the single biggest day for cannabis sales each year, driving at least double the revenue of an average day. Interestingly enough, this year, 4/20 will fall on a Saturday. “Since Fridays are typically the biggest sales day of the week, retailers should be ready for 420-eve as well as the holiday itself,” Headset’s CEO Cy Scott explained.
Adding to these comments, Rick Maturo, associate client director at Nielsen’s Bev/Al and Cannabis Practice, explained exclusively that, “From a Nielsen perspective, there are certain holidays throughout the year that we see a significant lift in beverage alcohol sales. A few holidays that come to mind include New Year’s Eve, St. Patrick’s Day, 4th of July and Valentine’s Day.”
He noted, however, that April 20th is not on this list of increased alcohol sales dates. “When compared to cannabis sales on April 20th, we are not currently seeing any significant lifts [in alcohol sales] that mirror the level of elevated sales seen within the legal cannabis space. That said, the lift in legal cannabis sales during 4/20 does reflect how committed the legal cannabis customer base is, especially as they seek out opportunities for experience enhancement and socialization. ”
Weed, Alcohol And Demographics
The Headset report with Nielsen data provided numerous interesting insights into cannabis consumptions trends on 4/20.
These included notable increases in purchases by Generation Z customers (21 and 22 year-olds), who drove the largest sales surge among all age groups; an unexpected rise in Millennials’ spending; strong demand for beverages and edibles; and abundance of deals and bulk buying offers.
However, the cross-referenced data with alcohol provided an unforeseen look into these dynamics. As Scott explained, format-specific holidays like 4/20 drive massive sales surges, with a 111 percent spike for April 20, 2018.
But, what does this mean? Is it good? Or could it be better?
To establish some comparison, Nielsen provided data for beer sales on St. Patrick’s Day and Independence Day (July 4th).
Is 4/20 The ‘St. Patrick’s Day Of Cannabis’?
According to Nielsen CGA, the sector of Nielsen that tracks on-premise alcohol sales within bars and restaurants, St. Patrick’s Day is the highest grossing day of the year for U.S. bars and restaurants.
In 2018. St. Patrick’s Day fell on a Saturday – just like 4/20 will this year, resulting in big sales for bars and restaurants. In fact, in 2018, St Patrick’s Day beer sales were up 174 percent and spirits sales rose by 153 percent, versus the average day in the year.
Focusing on performance by times of the day, “Brunch” hours (9 a.m. to 11 a.m.) showed the strongest growth for beer sales during St. Patrick’s Day weekend 2018, when compared to the previous weekend. This trend was particularly exacerbated on St Patrick’s Day itself, where “Brunch” showed a huge uplift of 1465 percent.
Happy Hour was, however, the most valuable day-part for beer sales across St Patrick’s Day weekend. Although consumers visit the on-premise (restaurants and bars) earlier on St Patrick’s Day – than on regular days, there was still a 122 percent surge from the mid-afternoon day part (3 p.m. to 5 p.m.), when compared to an average day of the year, and a 12 percent uplift, when compared to the previous Saturday – showing consumers still wait for this part of the day to take advantage of the deals offered.
The Clash Of The ‘Buds’
According to Nielsen data, last year, all “Off-Premise Outlets” (places that are not restaurants or bars, but sell alcoholic beverages) witnessed a 33 percent increase in beer sales during the two-week period including the Fourth of July – when compared to an average two-week period in 2018.
“The combination of summer weather, patriotic festivities, and time off work clearly makes a big impact on the category,” the Headser/Nielsen report explains.
Cannabis sales, however, saw a very small increase for the Fourth.
How sales will fare this year, we’ll be finding out in just a few days.
-Javier Hasse, Forbes Contributor