In focus: Hard seltzers

The hard seltzer success story is a masterclass in savvy branding. Having burst onto the scene in 2016, in just three years hard seltzers have become the fastest-growing alcoholic drinks category in the US, with the sector predicted to be worth US$2.5 billion by 2021 and due to triple in size by 2023.

White Claw leads the hard seltzer category

Dominated by market leaders White Claw and Truly, the question now is whether the category can replicate its runaway success in the US around the globe. It’s important to define what exactly hard seltzers are. Essentially boozy fizzy water housed in eye-catching packaging, hard seltzers can have a wine, spirit or malt base to which sparkling water and natural fruit flavours are added.

Ticking all the trend boxes, they are typically low in alcohol (around 5% ABV), low in calories (around 100 per can), and low in sugar, with most cans containing between 1-2 grams. They are also largely vegan and gluten free, which has helped them to win over a legion of health conscious millennial fans in the US.

In addition to ticking trend boxes when it comes to flavour, brand owners also seem to be winning the marketing game by creating hard seltzers with broad appeal across all demographics. Brand leader White Claw’s gender split is 53% female and 47% male. The packaging couldn’t be more on-trend too – portable, recyclable cans with Instagram-friendly designs set against a white background.

Brand leader Truly

And while sales will inevitably spike during the summer months, hard seltzers don’t seem to suffer from being viewed as a seasonal drink. Adam Rogers, the IWSR’s research director for North America, believes that while bang on trend, hard seltzers are here to stay.

“This is due to the category being seen as a healthier alternative to the current alcoholic drinks brands on the market. Innovation is also keeping consumers engaged in the category through the release of new flavours and higher- quality offerings,” he says.

In 2016 the burgeoning hard seltzer category moved up a gear with the launch of the category’s two biggest players: White Claw and Truly. The former is the brainchild of Mark Anthony Brands, run by Canadian entrepreneur Mark Anthony von Mandl, creator of Mike’s Hard Lemonade, whose family owns four Okanagan Valley wineries, including Mission Hill.

Truly, meanwhile, was created by the Boston Beer Co, maker of Samuel Adams beer. The brand has proved so successful for the brewer that it now sells more hard seltzers than it does beer, while White Claw sales surpassed US$1.5bn last year.

Having made a splash at the Kentucky Derby and Coachella, White Claw developed a cult following last summer, fuelled by a song called Drinkin’ Claws by singer-songwriter Mark Leach and Ohio-based rock band Hey Monea, which features the line: “There ain’t no laws when you’re drinking Claws”.

By September, White Claw, which boasts a malt base and is brewed and taxed like beer, warned of an impending shortage and von Mandl had to start selling the brand on allocation.

Hoping to give the big guns competition, in late January California wine brand Barefoot, owned by wine giant E & J Gallo, entered the game with a range of four white wine-based hard seltzers that marked the brand’s biggest new product investment in its 55-year history.

Among the flavours in the range are cherry and cranberry, and pineapple and passion fruit. Each can contains just 70 calories. Also hoping to ride the wave are big beer firms, which are ploughing millions into the category.

Vizzy is owned by Molson Coors

The first big brewer to enter the game was AB InBev, which acquired the SpikedSeltzer brand in 2016 and renamed it Bon & Viv. The brewer added Natty Light Seltzer to its portfolio last August and Bud Light Seltzer, made using “a unique five-step filtration process” in early 2020.

Meanwhile, Constellation Brands has invested US$40m (its biggest single brand splurge to date) in the marketing of its Corona Hard Seltzer, though given the current coronavirus crisis, consumers may struggle to see the appeal. Molson Coors has invested millions in new hard seltzer brand Vizzy, which launched in the US in March.

Keen to stand out in an increasingly crowded category, Vizzy’s point of difference is that its seltzers are made with antioxidant-rich acerola cherries, which are said to contain up to 30 times more vitamin C per cup than an orange.

The brewer is using the wellness route to attract health- conscious consumers who would rather knock back a low-calorie seltzer than develop a beer belly. As an increasing number of big brewers launch hard seltzers, they are, somewhat ironically, competing against themselves for market share – the more successful their seltzer brands, the more they are likely to eat into their beer sales.

Though with beer remaining largely flat, this seems to be a gamble brewers are willing to take. Reflecting its evolution as a company and the need to expand into new drinks categories, Molson Coors changed its name to Molson Coors Beverage Company in January ahead of the launch of Coors Seltzer this July.

Being a category that is unashamedly produced for profit, when it comes to hard seltzers, big brewers have a head start on fledgling brands in their ability to produce, distribute and market their seltzer brands at a fast pace on a large scale, piggy-backing off the success of their beers and engendering customer loyalty while they’re at it.

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