There's a trend of 'quality versus quantity' with alcohol purchases: Belvedere Vodka CEO

Belvedere Vodka CEO Rodney Williams joins Yahoo Finance’s On The Move panel to discuss the surge in alcohol sales and address how his company is faring during the coronavirus pandemic.

Video Transcript

ADAM SHAPIRO: --Fiance "On the Move." It's Friday. It's vodka day. It's vodka day everyday in this household. But joining us now to talk about some of the trends in adult beverages but also how Belvedere Vodka is helping on the front lines of the coronavirus crisis is Rodney Williams. He is the CEO of Belvedere Vodka. He's joining us here in New York City. Thank you for joining us, Mr. Williams.

First, tell me real quick, you gave-- what is it, the spirits that can help make disinfectant to manufacturers to help out?

RODNEY WILLIAMS: That's correct. It takes about 72% ABV to really kill germs. So we partnered with a unit of Michelin and Caritas, the largest charity of Poland, to provide product-- hand sanitizers, that went into hand sanitizers-- for about 300 hospitals, hospices, and first-line-responder groups across the country.

JULIE HYMAN: Hey, Rodney, it's Julie. It's good to see you again. Getting back to your bread-and-butter business, that of vodka, I am curious how sales have been because we have seen in general alcohol sales tick up, but it hasn't been sort of uniform across all different kinds of alcohol. What have you guys seen at Belvedere?

RODNEY WILLIAMS: Yeah, you know, I think everybody's been impacted by restaurants, bars, and pubs being closed, but we're seeing three big trends that are really supporting our business. The first is the growth in home delivery and home consumption. There's a lot of concern about, you know, regulations and children getting access to alcohol, but the delivery services have done a great job. 38 states and the District of Columbia have now loosened regulations so restaurants and bars can deliver at home.

The second big trend we're seeing is cocktail culture and fluency. So people are comfortable making drinks at home. You know, for a long time people have been intimidated about, you know, do I have the right ingredients? Do I have the right tools to make great drinks? And now, because they're at home and they have the time and willingness to experiment, they've become much more confident in it and I think much more literate about spirits in general.

For instance, vodka, the biggest segment in spirits, is all gluten free. A lot of consumers didn't realize that before, but we're hearing now that they're happily discovering it.

And then I think the third big trend that we're seeing is a trend towards quality versus quantity. It's a surprise to people, but 6 out of 10 Americans report that they're drinking about the same or less than they did before the pandemic. There's a cohort that really just drank in restaurants and bars and not at home so much. So we're not seeing, you know, huge incidences of binge drinking, which is heartening.

DAN ROBERTS: Rodney, Dan Roberts here. Before we went into quarantine, there was a lot of data out there specifically about young people and how they just don't drink as much alcohol anymore, either overall in a year or, when they drink, they don't drink as much alcohol on each occasion, and I know that that helped give rise to the hard-seltzer boom. I'm curious for Belvedere and another vodka and spirits how you try to change that downward trend and also what you personally make of the hard seltzer, which appears to have continued during this time?

RODNEY WILLIAMS: Yeah, well, on the first piece in terms of young adults, they do have a bias towards quality and premiumness. So we are seeing even during the pandemic that premium and super-premium segments are growing more rapidly than the value segments in vodka.

What we're also seeing too in terms of things like hard seltzer is that they were sort of born out of combinations with beer and now are moving into other categories of spirits. So I think it's a very expressive, sort of creative segment, and it will be interesting to see how it grows.

AKIKO FUJITA: Rodney, you talked about the growth trends that you've seen over the last two months with these stay-at-home trades, but I'm wondering if that growth is still enough to offset the losses you've experienced from all the bar closures because it doesn't sound like, especially in places like New York City, those bars are going to be reopening anytime soon?

RODNEY WILLIAMS: Yes, and that is a very good question. And, in fact, it doesn't offset, you know, the whole hospitality segment, if you will-- not just bars but also travel and the like with hotels. So we, like many others, are very interested in coming out of the pandemic as quickly as possible.

Clearly there is a human need to gather socially, and alcoholic libations are often a part of it. So we feel pretty optimistic about the rebound and recovery. It's more of a question of when and in what form will things like nightlife actually have?

ADAM SHAPIRO: Rodney Williams, Belvedere Vodka CEO. Some of us are all about the libations. Thank you very much for joining us. All the best to you and your team.